(Bloomberg) — Goldman Sachs Group Inc. is the latest exchange-traded fund issuer attempting to take market share from JPMorgan Chase & Co.’s breakout active strategy lineup.
The actively managed Goldman Sachs S&P 500 Core Premium Income ETF (ticker GPIX) and the Goldman Sachs Nasdaq-100 Core Premium Income ETF (GPIQ) both begin trading Thursday, according to a press release. GPIX and GPIQ track the S&P 500 and the tech-heavy Nasdaq 100, respectively, while also selling call options tied to their benchmarks for additional yield. Each fund charges 29 basis points.
Goldman joins a roster that includes BlackRock Inc. and Morgan Stanley in launching lookalike funds to JPMorgan’s successful active ETFs. GPIX and GPIQ resemble the $29 billion JPMorgan Equity Premium Income ETF (JEPI) and the $6 billion JPMorgan Nasdaq Equity Premium Income ETF (JEPQ), which also track US stocks combined with call-writing strategies.
JEPI and JEPQ are leading year-to-date active inflows in the $7 trillion ETF market thanks to the premise of downside protection combined with steady payout streams, inspiring a wave of copycat funds in the process.
Despite the stiff competition, Goldman Sachs Asset Management’s Michael Crinieri said there’s plenty of space in the category against a backdrop of volatile financial markets and a still-hawkish Federal Reserve.
“We think it’s early days for these types of strategies,” Crinieri, the global head of ETF, said in a phone interview. “With this type of strategy, you can think about it in a couple ways. The target yield helps reduces the volatility of your equity exposure, delivering outperformance in a down market, but still allowing for participation in an up market.”
That’s been the case with JEPI in particular, which dropped just 3.5% on a total return basis in 2022, versus an 18% plunge for the S&P 500. While it’s lagged the benchmark so far this year, it’s outperformed over the past three months as the Fed’s higher-for-longer messaging rattles equities and fixed-income alike.
Roughly $12.6 billion has flooded into JEPI so far in 2023, on track to eclipse last year’s nearly $13 billion haul, which shattered the record for active ETF inflows set by Cathie Wood’s Ark Innovation ETF (ARKK) in 2020. JEPQ has also attracted about $5 billion year-to-date, the second-most of any active ETF this year.
That runaway success has issuers lining up to capture even a portion of that asset growth, according to Bloomberg Intelligence.
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