Neos shareholder vote decides Goldman's $2.25 billion ETF deal

Goldman Sachs has agreed to acquire Neos Investments for up to $2.25 billion, ETF Trends reported this week after an episode of the ETF Prime podcast. The deal is Goldman's second major ETF acquisition of the year, after its purchase of Innovator ETFs. Neos launched its first fund four years ago. It now holds more than $30 billion in assets.

The main hurdle to closing is procedural: Mike Akins, founding partner at ETF Action, said on the podcast that Neos shareholders must approve the change of control in a proxy vote.

The same episode raised a sharper question about what belongs inside an ETF. Akins criticized Volatility Shares' filing for National Hockey League futures contract ETFs, calling them 'gambling vehicles dressed up as investment products.' He cited a Betterment survey that found 52% of Gen Z investors have pulled money from investment accounts to fund sports betting. Such products, he argued, carry a negative roll yield that would make the United States Oil Fund look tame. Issuers will keep hearing that argument: a regulated structure grants distribution and legitimacy that has nothing to do with the quality of the underlying strategy.

Paul Baiocchi of SS&C ALPS Advisors pitched the ALPS International Sector Dividend Dogs ETF (IDOG). The fund takes the five highest-yielding stocks from each sector and weights them equally. It covers all ten GICS sectors in the MSCI EAFE index. It is up roughly 65% since the start of last year. The S&P 500 has returned about 34% over the same period. Baiocchi said U.S. equities beat international stocks for 16 consecutive years before last year. He argued that steep valuation discounts abroad and a weakening dollar give advisors a structural reason to add international exposure. Most advisors remain underweight, with allocation targets of 10% to 15%.

ALPS also used the segment to promote the Smith Core Plus Bond ETF, run by Gibson Smith, the former chief investment officer at Janus. Investors still pay for quality and ballast in core bond allocations, and this fund has taken in more than $700 million this year.