Goldman Sachs Launches 2 JEPI-Like ETFs

Goldman Sachs Asset Management launched two new actively managed options-writing ETFs on Thursday, joining Morgan Stanley and BlackRock in trying to tap into the popularity of JPMorgan’s $30 billion options ETF, JEPI.  

The Goldman Sachs S&P 500 Core Premium Income ETF (GPIX) and the Goldman Sachs Nasdaq-100 Core Premium Income ETF (GPIQ) write call options on portfolios of stocks chosen from the S&P 500 and Nasdaq 100 indexes, respectively. This type of fund, often called buy-write funds, generates income by selling call options on a portfolio of stocks.  

The JPMorgan Equity Premium Income ETF (JEPI) has been a smash hit with investors, raking in over $12 billion just this year. That has attracted competition in the form of the Parametric Equity Premium Income ETF (PAPI) from Morgan Stanley and the BlackRock Advantage Large Cap Income ETF (BALI), in addition to Goldman’s new funds. 

Mike Crinieri, global head of exchange-traded funds at Goldman, GPIX’s and GPIQ’s stock holdings are just meant to provide exposure to their respective indexes, with active management coming into play with the options writing. 

Income Stream 

The funds have specific yield targets, with the aim of offering investors a consistent income stream. Buy-write funds offer investors lower volatility and consistent income, characteristics in particular demand from investors this year. 

“We think that there are many investors that are looking for exactly that, especially investors that are approaching retirement,” Crinieri said in an interview.  

Goldman predicts the funds will capture about 60% of the gains of their underlying indexes, on average, after selling the options needed to hit their yield targets. 

Despite other launches this year, Crinieri thinks it is still early days for buy-write ETFs, and the increasingly crowded sector still has plenty of room to grow. He points to investors’ concerns over high interest rates and geopolitical tensions as reasons they are gravitating to the more conservative risk-return profile of buy-write funds. 

GPIX and GPIQ both undercut JEPI’s 0.35% expense ratio with expense ratios of 0.29%.  

Contact Gabe Alpert at [email protected]