Goldman Sachs Launches Latest of 3 Buffered ETFs

Goldman Sachs Asset Management is continuing its foray into buffered ETFs, an increasingly popular type of exchange-traded fund that limits losses in exchange for sacrificing some potential gains.

On Tuesday, the firm announced the launch of the Goldman Sachs U.S. Large Cap Buffer 3 ETF (GBXC), its third fund in a suite of three buffered ETFs. The Goldman Sachs U.S. Large Cap Buffer 1 ETF (GBXA) and U.S. Large Cap Buffer 2 ETF (GBXB) were both listed earlier this year. Each of the active ETFs tracks the S&P 500 and seeks to mitigate the first 10% of losses beyond an initial 5% decline in the index over a three-month outcome period using a structured options strategy.

The macroeconomic environment has investors cautious but not necessarily so cautious that they’re ready to abandon their exposure to equities, Oliver Bunn, portfolio manager and global head of the Quantitative Investment Strategies Alternatives team at Goldman Sachs Asset Management, told etf.com.

Equity Exposure with Downside Protection

“What we have been envisioning with this suite of products is to essentially give people the opportunity to invest in equities but, at the same time, have some degree of protection,” Bunn said.

While similar buffered ETFs on the market reset annually, the three funds from Goldman Sachs reset every three months. As they were launched in January, February and March, there’s a fresh version each month. 

“You’re not stuck with one outcome period for a long period of time,” Bunn said. “It’s a lot more dynamic and much more adaptable to market circumstances to have a faster resetting outcome period.”  

Interest in buffered ETFs began to surge in 2022 when both stocks and bonds delivered significant losses. The defined outcome investment products have since remained a go-to for investors who are looking to balance risk and reward, and preserve capital, amid concerns of economic downturns and market volatility. 

Nicknamed “boomer candy” thanks to their appeal to investors in or near retirement, buffered ETFs have garnered roughly $53 billion in total assets, up from $200 million in 2018.  

CFRA expects this could potentially be a strong year for buffer ETFs’ net inflows, Aniket Ullal, head of ETF research and analytics at CFRA Research, told etf.com.  

“In 2025, we expect more uncertainty in equity markets driven by tariffs and continued inflation concerns, which could indicate strong demand for products providing some downside protection,” Ullal added. “ETF issuers are responding to this likely demand.”