Challenge the premise for social

Summary

Bryon Lake of Goldman Sachs Asset Management responds to concerns that defined outcome and derivative-based income strategies have not been tested by market stress. He argues 2022 was a real volatility test, when the defined outcome category tripled as investors sought downside protection while major benchmarks fell. He concludes these strategies have been battle-tested even if they were not all available as ETFs at the time.

• The discussion opens with a concern that derivative-based income products have not faced a full market stress episode.
• Bryon Lake challenges the premise that there has been no volatility test.
• He cites 2022, when major benchmarks declined substantially.
• The defined outcome category tripled in size during 2022 as investors sought downside buffers or portfolio protection.
• He says the strategies themselves have been battle-tested.
• He notes the strategy existed before it was available in ETF form.