Goldman Expands Active ETFs Through Neos

Goldman Sachs has agreed to acquire exchange-traded fund provider Neos Investments for up to $2.25 billion, expanding its position in active asset management. The deal reflects rising demand for investment products offering income generation and some protection against market declines.

Neos oversees approximately $30 billion across 19 ETFs. Its funds combine exposure to established indices with options strategies intended to generate recurring income and limit downside risk. Such products have gained attention from investors seeking alternatives to traditional passive funds during volatile market conditions.

The company’s flagship S&P 500 high-income ETF delivered a total return of approximately 19 per cent during the year ending in June. Its return since launch was close to 15 per cent, according to Neos. However, historical results do not ensure future performance. Options-based ETFs can also involve higher fees, capped returns and greater complexity than standard index-tracking products.

The acquisition is expected to increase Goldman’s active ETF assets to roughly $80 billion. It follows the bank’s purchase of Innovator Capital Management, which also specialises in options-based products designed to manage investment outcomes.

For Goldman, the transaction supports a broader effort to expand recurring asset-management fees and reduce reliance on less predictable investment banking and trading income. Its asset and wealth management division generated $4.6 billion in second-quarter revenue, up 20 per cent from the previous year.

Neos co-founders Troy Cates and Garrett Paolella will become Goldman partners after completion. The deal is expected to close in the first quarter of 2027, subject to customary conditions.

Investors will assess whether Goldman can retain Neos clients, maintain inflows and integrate its products effectively. The transaction strengthens the bank’s access to a growing ETF segment, but its long-term value will depend on fund performance, fee levels and demand across changing market cycles.