Goldman Sachs agreed in August to acquire ETF provider Neos Investments for as much as $2.25 billion, in a deal Bloomberg described as part cash and part equity. According to a WealthManagement.com report published October 12, the Neos funds at the center of the transaction now face questions about their tax treatment, in a segment of the derivative-income market the outlet put at $195 billion.
On timing, Kitco's newswire coverage said the deal is expected to close in the first quarter of 2027. Goldman's announcement said Neos managed $30 billion across 19 options-based income ETFs as of June 30, 2026. Bloomberg separately cited about $32 billion in nearly two dozen funds.
Neos, based in Westport, Connecticut, was founded in 2022. Yahoo Finance reported that its flagship options-based funds attracted inflows by paying monthly income alongside double-digit returns. WealthManagement.com said the two flagship vehicles took in $28 billion between them over four years. AdvisorHub reported that co-founders Troy Cates and Garrett Paolella are due to become partners at Goldman Sachs Asset Management after closing, and that the full Neos team is expected to join.
The tax question turns on how the funds are built. Bloomberg, in the article carried by WealthManagement.com, said Neos made its name with copies of popular JPMorgan products that combine exposure to an index such as the S&P 500 with income from selling options on that holding. In the Neos funds, the report said, financial engineering means most distributions are not taxed right away, and when they are taxed the rate is usually lower. In a JPMorgan version, much of the payout is taxed at ordinary income rates, which reach 37% for top earners.
Bloomberg News reported that tax attorneys and some competing fund issuers told it they struggle to square Neos' unusually strong tax results with their own reading of the Internal Revenue Code as it applies to such funds. WealthManagement.com also reported that JPMorgan rolled out tax-advantaged income ETFs of its own earlier this year as a response.
The regulatory backdrop is changing. Law firm Morgan Lewis said the Treasury Department and IRS released two pieces of guidance on September 28, 2026: Revenue Ruling 2026-20 and Notice 2026-62. WealthManagement.com reported that the ruling aims to curb one popular ETF maneuver for deferring capital gains tax, while the notice warns that action may follow on other approaches. Ropes & Gray said the notice names ETF seeding transactions and four other strategies using Section 852(b)(6) of the tax code, plus three categories of tax-aware fund strategies used mainly by partnerships and separately managed accounts. Morgan Lewis quoted Treasury Secretary Scott Bessent as signaling a firm stance against transactions meant to avoid taxes or exploit the federal tax code. The sources reviewed do not say the guidance targets Neos.
For Goldman, the purchase extends an ETF buildout. AdvisorHub reported that the firm agreed late last year to buy Innovator Capital Management for $2 billion, and that Neos would lift Goldman's ETF assets to about $130 billion. Goldman said the combined platform would rank Goldman Sachs Asset Management among the eight largest active ETF providers, with $80 billion of its $130 billion global ETF platform in active funds as of June 30, 2026. It also described derivative-income ETFs as holding roughly $180 billion and growing at a compound annual rate above 70% since 2021.