Goldman Sachs Asset Management has expanded its suite of buffered ETFs.
The Goldman Sachs U.S. Large Cap Buffer 3 ETF (GBXC), launched on March 4, is designed to provide investors capital appreciation with an element of downside protection.
“It is great to see Goldman Sachs expand its options based ETF lineup with a simplified approach,” said Todd Rosenbluth, head of research at VettaFi. “The firm has had success with ETFs like GPIQ and GPIX and bring options expertise to the ETF market.”
GBXC is the third actively managed fund in a suite of three buffered ETFs from Goldman Sachs Asset Management. The lineup includes the Goldman Sachs U.S. Large Cap Buffer 1 ETF (GBXA ) and the Goldman Sachs U.S. Large Cap Buffer 2 ETF (GBXB ), as well as GBXC. The three active ETFs track the S&P 500 while employing a structured options strategy that seeks to limit downside risk.
Under the Hood of the 3 Active Buffered ETFs
Each ETF in the suite seeks to mitigate the first 10% of losses beyond an initial 5% decline in the S&P 500 over a three-month outcome period, according to a statement from the firm. Additionally, investors can capture upside potential up to a predetermined cap that resets quarterly.
GMXA, GMXB, and GMXC offer a series of quarterly resets. This allows investors multiple entry points during a quarter to invest in equities with greater certainty.
“Depending on when an investor enters or exits their position in a buffer ETF, returns and buffer ranges may vary from their starting points,” Jonathan Oliva, head of ETF Capital Markets at Goldman Sachs Asset Management, said in a statement to VettaFi.
“That’s why we believe that a three-month outcome period provides investors greater flexibility by offering multiple entry points throughout the year at the beginning of a new outcome period, and the ability to seek opportunities to invest for the long term with greater certainty to realize their desired outcome,” he added
The fund uses a unique structure to achieve its investment objective, which allows the firm to offer GBXC at a 50 basis points net fee, according to Oliva. To compare, the average expense ratio for buffer ETFs is 80 basis points, per Bloomberg.
See more: Goldman Sachs Debuts New Batch of Muni Income ETFs
For more information, please visit VettaFi.com | ETF Trends.
