Goldman Sachs to Buy NEOS Investments for Up to $2.25 Billion in ETF Expansion

Goldman Sachs has agreed to acquire NEOS Investments for up to $2.25 billion, adding a fast-growing platform of options-based income exchange-traded funds to an asset-management business that the bank is increasingly using to build steadier fee revenue.

The purchase price is not a fixed $2.25 billion cash payment. Goldman said the consideration will be paid in cash and equity and is subject to certain performance and service commitments. The transaction is expected to close in the first quarter of 2027, pending regulatory approval and other customary conditions.

NEOS manages $30 billion across 19 options-based income ETFs as of June 30. In its deal announcement, Goldman said the acquisition will help create a top-eight active ETF manager with about $80 billion in active ETFs inside a $130 billion global ETF platform.

NEOS adds $30 billion in active income ETFs

The strategic value of the deal is less about the number of funds than the type of assets NEOS brings. The firm specializes in systematic options-based income ETFs, products that combine underlying market exposure with options strategies designed to generate monthly income and, depending on the fund, manage risk or preserve some upside participation.

Goldman said NEOS’ $30 billion of active income ETFs will complement roughly $40 billion it already oversees in income and outcome-oriented options-based ETF solutions. The combined platform will span income strategies, buffer products and managed-outcome approaches, giving Goldman a broader lineup in a part of the ETF market that has been growing much faster than the industry’s traditional passive core.

The bank cited Morningstar data showing that derivative-income ETFs have grown to about $180 billion in assets under management, with a compound annual growth rate of more than 70% since 2021. Those figures come through Goldman’s announcement rather than a separate MarketReview calculation, but they help explain why the firm is willing to pay a substantial price for a platform founded only in 2022.

The deal also preserves the investment team behind the products. NEOS co-founders Troy Cates and Garrett Paolella are expected to join Goldman Sachs Asset Management as partners after closing, and Goldman expects the full NEOS team to join the business. That matters in active management because the acquisition is not simply a transfer of fund assets; Goldman is also buying the people, processes and distribution relationships behind the strategies.

Options-income ETFs add a recurring management-fee stream

The revenue angle is central to Goldman’s rationale. The bank said the acquisition will strategically expand its “more durable revenue,” language it has repeatedly used for businesses that generate recurring fees rather than depending as heavily on the timing of investment-banking transactions or trading conditions.

ETF management fees are generally charged as a percentage of assets, so revenue rises or falls with the amount of money managed and the applicable fee schedule. NEOS’ largest products illustrate the economics. The NEOS S&P 500 High Income ETF, or SPYI, listed net assets of about $11.36 billion as of August 11 and a 0.68% management fee. The NEOS Nasdaq-100 High Income ETF, or QQQI, also charges a 0.68% management fee and listed about $13.87 billion in net assets on the same date.

Together, those two funds account for more than $25 billion in current net assets, making them a large part of the platform Goldman is acquiring. Their size also shows why the deal can add meaningful fee-paying assets even though NEOS is a relatively young firm. Market values, investor flows and fee waivers can change the actual revenue generated, so current assets should not be treated as a fixed future earnings stream.

The products themselves are more complex than plain index-tracking ETFs. SPYI invests around S&P 500 exposure while implementing a data-driven call-option strategy, and QQQI uses a similar approach around the Nasdaq-100. NEOS says the funds seek high monthly income while retaining some potential for equity appreciation. Options can also alter upside and downside behavior, and the funds disclose derivative, market and distribution risks. The income objective therefore should not be read as a guaranteed yield or a substitute for the underlying investment risk.

For Goldman, the attraction is that active and derivative-based ETFs can deepen relationships with financial advisers and individual investors while adding management fees tied to assets. That helps diversify a firm whose investment-banking and trading businesses can produce large revenues but are more sensitive to deal volumes and market activity.

The deal extends Goldman’s options-based ETF acquisition strategy

NEOS is Goldman’s second major options-focused ETF acquisition in less than a year. The firm completed its purchase of Innovator Capital Management in April, adding about $31 billion in assets across 171 ETFs focused largely on defined-outcome strategies. Those products use options to target specific combinations of downside protection, income and market participation.

Innovator and NEOS address different parts of the same broader shift. Innovator is best known for defined-outcome and buffer ETFs, while NEOS is concentrated in systematic income products. Goldman said the two acquisitions, combined with its existing capabilities, create a broader options-based ETF franchise rather than a collection of unrelated fund purchases.

The strategy also fits Goldman’s longer-running effort to increase fee-based revenue inside Asset & Wealth Management. The firm’s 2025 annual report highlighted ETFs, separately managed accounts and other investment solutions as growth areas and set additional targets around fee-based inflows and management fees. Goldman reported approximately $4 trillion in assets under supervision as of June 30, 2026, giving it a much larger distribution and client network than NEOS could access on its own.

Scale does not eliminate the execution risk. The $2.25 billion headline value depends on performance or service commitments, the acquisition still requires regulatory approval, and the economics will ultimately depend on whether NEOS retains assets and continues attracting new money after joining Goldman. Active ETF growth has been rapid, but it has also drawn more competitors into the market.

If the transaction closes as planned in the first quarter of 2027, NEOS founders and employees will move into Goldman Sachs Asset Management and its products will become part of a global ETF platform with about $130 billion in assets. The next test will be whether Goldman can use its distribution scale to keep growing the options-income franchise while converting that asset base into the more durable fee revenue it is seeking.