Glossary

Bull-market: A bull market is a period of sustained growth in the stock market, characterized by rising prices and investor optimism.

Put option: A put option is a financial contract that gives the buyer the right, but not the obligation, to sell an underlying asset (like a stock, bond, or commodity) at a predetermined price (the strike price) on or before a specific date (the expiration date). The seller of the put option (the writer) is obligated to buy the asset if the buyer exercises their right.

Equity drawdown: Equity drawdown refers to the decline in the value of an investment from its peak value. It's expressed as a percentage, representing the loss from the highest point reached.

Equity based hedge: An equity-based hedge is an investment strategy designed to reduce or offset potential losses in an equity portfolio. It involves using various financial instruments and techniques to protect against adverse market movements. The goal is to limit downside risk while maintaining the potential for upside gains.

Cap: A buffer ETF’s performance is subject to an upside return limit – or “cap” – that represents the maximum upside percentage return a buffer ETF can achieve for the duration of the Outcome Period (the “Cap”). The Cap is set on or before the first day of an Outcome Period based on the cost of providing the Buffer and the Deep Downside Protection and may increase or decrease from one Outcome Period to the next. 

The strategy’s use of derivatives (including options, forwards, swaps, options on swaps, structured securities and other derivative instruments) may result in losses. These instruments, which may pose risks in addition to and greater than those associated with investing directly in securities, currencies or other instruments, may be less liquid, volatile, difficult to price, and leveraged so that small changes in the value of the underlying instruments may produce disproportionate losses.

Equity investments are subject to market risk, which means that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular sectors and/or general economic conditions. Different investment styles (e.g., “growth” and “value”) tend to shift in and out of favor, and, at times, the strategy may underperform other strategies that invest in similar asset classes. The market capitalization of a company may also involve greater risks (e.g. "small" or "mid" cap companies) than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements, in addition to lower liquidity.

Options may be used for investing or hedging purposes, but also entail risks related to liquidity, market conditions and credit that may increase volatility. The value of a strategy’s positions in options may fluctuate in response to changes in the value of the underlying asset. Selling call options may limit returns in a rising market. Options are not suitable for all investors. There may be additional risks that are not currently foreseen or considered.

Exchange-Traded Funds are subject to risks similar to those of stocks. Investment returns may fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed, or sold, may be worth more or less than their original cost. ETFs may yield investment results that, before expenses, generally correspond to the price and yield of a particular index. There is no assurance that the price and yield performance of the index can be fully matched.

A buffer ETF is typically designed to deliver pre-defined outcomes over a defined period.

The S&P 500® (Standard & Poor's 500) is a stock market index tracking the performance of 500 large-cap U.S. companies. The index is market-capitalization-weighted, meaning larger companies have a greater influence on the index's overall value. The index is calculated by S&P Dow Jones Indices, a subsidiary of S&P Global. Indices are unmanaged. The figures for the index reflect the reinvestment of all income or dividends, as applicable, but do not reflect the deduction of any fees or expenses which would reduce returns. Investors cannot invest directly in indices. 

THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO DO SO.

Prospective investors should inform themselves as to any applicable legal requirements and taxation and exchange control regulations in the countries of their citizenship, residence or domicile which might be relevant.

This material is provided for educational and informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. This material is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client’s account should or would be handled, as appropriate investment strategies depend upon the client’s investment objectives.

Past performance does not guarantee future results, which may vary. The value of investments and the income derived from investments will fluctuate and can go down as well as up. A loss of principal may occur. 

Diversification does not protect an investor from market risk and does not ensure a profit.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. This material has been prepared by Goldman Sachs Asset Management and is not financial research nor a product of Goldman Sachs Global Investment Research (GIR). It was not prepared in compliance with applicable provisions of law designed to promote the independence of financial analysis and is not subject to a prohibition on trading following the distribution of financial research. The views and opinions expressed may differ from those of Goldman Sachs Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. Investors are urged to consult with their financial advisors before buying or selling any securities. This information may not be current and Goldman Sachs Asset Management has no obligation to provide any updates or changes.

Views and opinions expressed are for informational purposes only and do not constitute a recommendation by Goldman Sachs Asset Management to buy, sell, or hold any security. Views and opinions are current as of the date of this publication and may be subject to change, they should not be construed as investment advice.

Individual portfolio management teams for Goldman Sachs Asset Management may have views and opinions and/or make investment decisions that, in certain instances, may not always be consistent with the views and opinions expressed herein.  

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This material is provided for informational purposes only. It is not an offer or solicitation to buy or sell any securities.