Market participants are increasingly looking beyond broad-based enhanced-volatility strategies as demand grows for more tailored solutions across structured products, ETFs and annuities.

Goldman Sachs is seeing significant demand for custom and strategy indices across structured products, ETFs and indexed annuities, with firms increasingly assessing how bespoke strategies can differentiate their offerings.

Structured products will continue to offer customizability and uniqueness, remaining attractive for clients looking to design a product - Dolapo Lawal

The bank has been active across several parts of the market and has just brought to market the GS American Funds GFA 15% Index, a new index strategy within Nationwide’s New Heights Select fixed indexed annuity suite, combining Capital Group’s American Funds Growth Fund of America with a dynamic risk-management overlay.

Goldman Sachs is also a swap provider for options-based ETFs and has expanded its presence in the segment through the acquisition of Innovator Capital Management, a defined outcome ETF provider. The firm has also agreed to acquire NEOS Investments, adding US$30 billion of active income ETF assets to its platform.

Against this backdrop, Goldman Sachs says many firms that had previously been hesitant about custom strategies are now taking a closer look at the space.

“We are seeing significant demand,” Dolapo Lawal (pictured), Goldman Sachs’ head of Americas Private Investor Product Group (PIPG), told SRP. “Many firms that were hesitant about custom strategies are starting to take a real look at whether they should lean into this space given the well-documented growth.”

The bank is seeing asset managers evaluate defined outcome complements to existing offerings, while wealth management firms are looking to develop scalable in-house products that align more closely with their investment philosophies. Carriers, meanwhile, are looking to gain share in the rapidly growing RILA market, while fintechs and distribution firms are seeking to support a broader range of solutions.

At the centre of these developments is a push for thematic consistency across product suites, alongside the scale and flexibility that different wrappers can provide.

Differentiation drives swap activity

Goldman Sachs is also seeing greater demand for differentiation and payoff efficiency in swaps linked to structured ETFs.

Many of the swaps being requested have similar characteristics, generating above-market yields through a combination of reference assets, volatility targets, decrements and other features. However, firms are increasingly challenging swap counterparties and index providers to address specific features of these strategies.

“In the autocall space for example, these include pushing for features like dynamically adjusting volatility, or more stable autocall rolling features to avoid potential clumping of entry/exit points,” said Lawal.

These features do not fundamentally change the underlying investment thesis, Lawal said, but demonstrate the extent to which market participants are looking to innovate across the different components of structured payoffs.

Broader differentiation

Goldman Sachs is seeing considerable differentiation at the index-design stage. Many recently launched products have focused on broad-based indices combined with an enhanced-volatility concept, although the bank expects greater variation in the coming months.

Demand for bespoke strategies remains more selective among institutional and private bank clients.

“There is still a high bar to design custom index strategies in that segment,” said Lawal, attributing this partly to the breadth of existing products and the performance of more vanilla strategies such as equity long-only and option-writing strategies over the past five years.

“It’s difficult to fix what for many isn’t broken,” she said.

Clients also now have more robust tools to assess how potential indices compare with existing portfolio assets, making differentiation a deeper exercise than it was previously.

At the same time, the broader democratisation of investments is increasing the need for firms and platforms to innovate in order to differentiate themselves.

Structured products and ETFs

Goldman Sachs expects structured products and ETFs to coexist as the market develops over the next two to three years, with the two wrappers offering different ways of delivering similar investment objectives.

“Structured products will continue to offer customizability and uniqueness, remaining attractive for clients looking to design a product, a product ladder, or simply want to be compensated for holding the zero-coupon bond in a note,” said Lawal.

ETFs, meanwhile, are expected to continue growing as a scalable and more liquid complement for clients seeking similar, although not identical, payoffs.

“The thesis for both remains the same – expressing a specific view on the market and potentially generating tailored returns inside a portfolio. The difference is the delivery method,” she said.

Role of investment banks

Goldman Sachs sees investment banks playing an important role in supporting issuers and asset managers through index innovation, particularly through their modelling and hedging infrastructure.

“The broader the capabilities of the bank generally, the more that an issuer or asset manager looking to design/use an index will be able to customize,” said Lawal.

Banks with large structured products businesses also bring experience of the underlying payoffs from a client perspective.

“In a knowledge-dependent industry, I see that as a persistent source of value-add to anyone looking to innovate,” she said.

Looking ahead, Lawal identifies three factors as key to the growth of the custom and strategy indices market going forward.

“I think that the growth of this segment will be dependent on quality product design, effective client education in deploying these strategies, regardless of wrapper, and the macro environment,” he said.

This Q&A is published in full as a preview of the SRP Custom & Strategy Report 2026, which includes selected extracts from the interview. 

Do you have a confidential story, tip or comment you’d like to share? Contact Us | SRP (structuredretailproducts.com)