Goldman Sachs Asset Management announced Wednesday that it has agreed to acquire NEOS Investments, a specialist in options-based income ETFs, in a deal valued at up to $2.25 billion in cash and equity. The transaction will fold NEOS's 19 systematic options-based income ETFs into Goldman's existing platform, which already includes the defined-outcome lineup acquired from Innovator Capital Management last year. Once completed, the combined active ETF business will oversee roughly $80 billion in assets, placing Goldman among the top ten active ETF providers in the U.S., according to the firm.
The acquisition underscores the accelerating demand for derivative-based ETFs among financial advisors. Industry-wide, assets in options-based income ETFs have grown to approximately $180 billion, expanding at a compound annual rate above 70% since 2021, according to Morningstar data cited in the announcement. This growth has outpaced the broader active ETF surge, which has seen active funds climb to about 12% of the $14.9 trillion U.S. ETF market, up from just 4% in 2021.
NEOS, founded in 2022 by Troy Cates and Garrett Paolella, focuses on strategies that sell options to generate monthly income while aiming for tax efficiency within the ETF wrapper. Cates and Paolella are expected to join Goldman Sachs Asset Management as partners once the deal closes, which is anticipated in the first quarter of 2027, pending regulatory approval. The acquisition builds on Goldman's earlier purchase of Innovator, which added 159 defined-outcome ETFs and approximately $28 billion in assets under supervision.
Defined-outcome ETFs, also known as buffer ETFs, use a basket of options to provide a preset level of downside protection and capped upside over a fixed period, then reset. In contrast, NEOS-style funds sell options to generate yield. Goldman's decision to acquire both types of strategies suggests the firm sees advisor demand for engineered outcomes as durable, not merely a reaction to market volatility.
Research from Cerulli Associates, released around the time of the Innovator acquisition, projects that defined-outcome ETF assets could more than quadruple to $334 billion by 2030, implying a five-year compound annual growth rate as high as 35%. That report, based on conversations with more than 35 advisors and survey responses from over 2,000 advisors, found that 68% of affluent investors prefer limiting downside risk over chasing maximum upside. Advisors also view buffer ETFs as a lower-cost, more liquid alternative to structured notes and annuities.
As of September, total assets in defined-outcome ETFs stood at $69 billion, with Innovator and First Trust controlling more than 75% of that market, per Cerulli. Newer entrants such as BlackRock, Allianz, and Calamos are also pushing into the category, indicating that Goldman's acquisitions are as much about securing early scale as about the products themselves.
The move fits a broader trend in wealth management. More than half of financial advisors surveyed plan to increase their use of active ETFs over the next 12 months, according to industry data, while the outlook for active mutual funds remains weaker. Asset managers of Goldman's size are racing to build or buy active ETF shelf space rather than cede it to specialist issuers. For advisors, the consolidation means a wider array of options-based strategies from a single platform, potentially simplifying due diligence and portfolio construction.
Goldman's chairman and CEO, David Solomon, said in the announcement that NEOS's disciplined investment approach is complementary to Goldman's capabilities across buffer, managed outcome, and income strategies, giving investors a diverse toolkit for different market environments. The transaction is expected to close in the first quarter of 2027, subject to regulatory approval.
