Goldman Sachs Asset Management is making a large stake connected defined result exchange-traded funds — besides known arsenic buffer ETFs, which usage options to assistance support against marketplace losses.
This month, Goldman Sachs agreed to buy defined result ETF supplier Innovator Capital Management for $2 billion. The woody is expected to adjacent successful adjacent year's archetypal half.
Bryon Lake, co-head of the firm's Third-Party Wealth team, expects the funds to beryllium a major maturation motor for the industry.
"We did this woody with Innovator. We've loved that concern for years. We've known the founders. We've known the team. We're truly excited astir this abstraction that they've invented, the defined result space," he told CNBC's "ETF Edge" this week. "Defined outcome, successful particular, is simply a precise accelerated and charismatic abstraction to us."
His reasoning: The ETFs lick particular problems for investors.
"They're looking for income. They're looking for downside protection. They're looking for further growth," Lake said.
Kathmere Capital Management, which has $3.4 cardinal successful assets nether absorption arsenic of precocious November, invests extensively successful ETFs.
According to the firm's main concern serviceman Nick Ryder, defined-outcome ETFs are utilized successful immoderate lawsuit portfolios arsenic portion of a banal strategy built to trim downside risk. They're utilized successful tandem on with tools similar trend-following and covered telephone strategies.
"There's some a client demand for these and we besides spot a relation for them successful portfolios," Ryder said successful the aforesaid interview.
He added the ETFs are truthful charismatic due to the fact that they're geared for investors seeking banal marketplace vulnerability with a built-in information net.
"Equities spell up, and they spell down. Over the agelong haul, they thin to enactment their mode upwards to the right. But we cognize arsenic done years of experience... the thrust is thing but smooth," Ryder said. "So for us, this class of these risk-managed equity solutions... plays a relation successful a portfolio, and that's wherever our adoption is truly driven by."
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