The $50 Billion Proof Point
The numbers don't lie: Vest’s $50 billion in defined outcome strategies is proof that sophisticated derivatives are now accessible across a wide range of portfolios. This milestone proves that the fundamental shift in investing has already begun.
What started as institutional, outcome-focused strategies is now accessible through a ticker. Today, we're proud to have reached this $50B milestone1 in the defined outcome industry—one we pioneered back in 2016 by making the power of derivatives work for all investors.
The Great Portfolio Rethink
The markets have changed, and we believe your approach should too.
Market volatility has tightened like a coiled spring, and our goal is to equip investors with precision tools that keep portfolios on an even keel—whether the mandate is a clearly defined return profile or a dependable stream of income.
Consider this year’s opening act: In January the “fear index,” or VIX languished below 15, yet by early spring 2025, it surged above 50², matching pandemic-era extremes. Bonds offered no refuge–the MOVE index, fixed‑income’s own “fear gauge”, soared to its highest level since Q1 20233, moving almost in lockstep with equities.
The wake-up call came in 2022, when the Federal Reserve unleashed its most aggressive rate-hiking campaign since the 1980s. Long-duration treasuries and equities across size and style factors fell together, shattering the cornerstone assumption of the classic 60/40 portfolio4.
The takeaway for advisors is unmistakable: in a world where correlations can flip overnight and volatility strikes both growth and safety assets, portfolios need instruments engineered for specific outcomes, not broad-brush assumptions.
Precision isn’t a luxury anymore; it’s the new baseline.
Evolved Client Expectations:
- Clients now demand certainty in uncertain times.
- Focus is shifting from broad diversification to tools that explicitly define forward-looking risk, return, and yield.
- Fee pressure requires demonstrable value-add beyond basic allocation.
From Institutional Secret to Advisor Essential
The transformation has been dramatic. The outcome-based ETF space has exploded, more than quintupling (5x) from 1175 defined outcome and derivative income ETFs launched by 2020 to 6036 now, with over $184.73 billion7 in combined assets.
The adoption numbers tell the story: defined outcome ETFs have grown 2755% in total net assets since January 2020 to last month (June 2025) and derivative income ETFs have grown 7025% in the same time period. Major players like BlackRock and JPMorgan have entered the space and even since the beginning of 2024 to last month, defined outcome ETF and derivative income ETF together have grown by 87%8.
Even well-established institutions like the UConn9 endowment fund are increasingly adopting buffer strategies as part of their risk management solutions.
At Vest, we've been privileged to partner with advisors and industry leaders through this evolution, reaching the $50B milestone together. But this represents more than growth—it proves that engineered outcomes are becoming the new standard for portfolio construction.
Why This Matters for Your Practice
Client conversations have fundamentally changed. The question isn't "Can you beat the market?" anymore. It's "Can you help me achieve my specific outcome while managing downside risk?"
A Morningstar study titled "Mind the Gap"10 revealed that investors in US mutual funds and exchange-traded funds captured only 6.3% of their funds' 7.3% annual return over the 10 years ended Dec. 31, 2023, missing over 15% of potential gains due to behavioral mistakes. Defined outcome strategies solve this by providing clear parameters that help clients stay disciplined during volatile periods.
"What’s in your client's portfolio that is going to save them if 2022 repeats itself?"
— Jeff Chang, President, Vest.
Consider the advisor advantage: instead of explaining why traditional diversification failed during the latest market stress, you can show clients exactly how their defined outcome strategy performed within its predefined parameters. No surprises, no behavior-induced losses, just the certainty that comes from targeted solutions.
The Toolkit: Specialized Instruments for Specific Outcomes
This is where precision meets portfolio construction: derivatives provide complementary solutions for virtually every client objective.
Our suite includes:
- Target Buffer® strategies, which harness options to deliver downside protection with upside participation potential,
- Target Income Strategies®, which use derivatives to convert volatility into income across underlying asset classes, including equities, commodities, bitcoin, and fixed income.
These aren't competing strategies—they're complementary solutions that unlock the benefits of derivatives for specific client needs. The most experienced advisors understand these defined outcome approaches work together, often using both for the same client at different times or in different accounts.
Industry Validation at Scale
The $50B milestone represents an inflection point for outcome-based investing. BlackRock projects outcome ETFs to continue expanding and the category within the U.S. to more than triple to $650 billion by 203011. This represents a major shift in how advisors construct portfolios.
Advisors are evolving from stock-pickers to outcome-focused portfolio strategists, partnering with specialized firms to deliver more certainty for clients. Through trusted partnerships and accessible products, we believe every investor deserves the benefits of outcome-focused strategies.
Vest’s Role: Making Derivatives Work for Every Portfolio
We've launched over 300 outcome-focused products with a pristine track record—consistently delivering our promise. While others followed market trends, we've been building the infrastructure since 2016 to make the benefits of derivatives accessible.
This $50B milestone validates our core belief: the benefits of defined outcomes should work for every investor, not just institutions. Our real value isn't in the products themselves—it's in engineering the outcomes that help you serve clients better.
The Acceleration Point
This milestone isn't our victory lap—it's our acceleration point. The outcome-focused evolution is just beginning, and the most successful advisors will be those who embrace these specialized approaches for specific client needs.
What you can expect:
- Continued innovation in defined outcome strategies,
- Deeper partnerships to solve real portfolio challenges,
- Tools that put cutting-edge solutions at every advisor’s fingertips.
The future of investing isn’t about hope—it’s about mathematical precision, clarity, and control.
And we're just getting started.
Disclaimer
Past performance is no guarantee of future results. The opinions and forecasts expressed may not actually come to pass. This information is as of the date provided, and is subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security or strategy. All content has been provided for informational or educational purposes only. Target Outcome Investments® and Target Buffer Strategies® are registered trademarks of Vest Financial. Investment advisory services are provided by Vest Financial LLC, an SEC-registered investment adviser. Financial professionals are responsible for evaluating investment risks independently and exercising independent judgment to determine whether investments are appropriate for their clients.
Sources
1 As of July 9, 2025, Vest has $43.2 billion in assets under management and $7.9 billion in non-discretionary assets under management.
2 CBOE Volatility Index (VIX) data, daily closing value 52.33, as of April 8, Q2 2025 and closing value 57.06 as of 4/1/2020.
3 Merrill Lynch Option Volatility Estimate Index Data (MOVE), in Q1 2023 and 2022 peak on October 17, 2022, closing value 156.95.
4 Bloomberg Correlation between SP500 TR USD and Bloomberg US Agg Bond 36 months from 2019-01-01 to 2021-12-31 Base Currency to Correlation 2022-07-01 to 2025-06-30 Base Currency.
5 Morningstar under categories Derivative income and Defined Outcome in ETFs count as of 12/31/2020.
6 Morningstar under categories Derivative income and Defined Outcome in ETFs count as of 7/9/2025.
7 Morningstar Asset Flows, USD, Total Net Asset for Morningstar US ETF Categories Defined Outcomes and Derivative Income as of 2025-06-30.
8 Morningstar Asset Flows, USD Total Net Asset for Morningstar US ETF Categories Defined Outcomes and Derivative Income from 2018-12-01 to 2025-06-30, excluding FoF and Feeder funds and including obsolete funds.
9 Bloomberg News, UConn’s Endowment Is Abandoning Hedge Funds for New Kind of ETF By Emily Graffeo, Dec 16, 2024.
10 Morningstar, Mind the Gap 2024 Investors lost out on about 15% of the return their funds generated By Jeffrey Ptak, CFA, Aug. 15, 2024.
11 BlackRock, Outcome ETFs: A powerful tool for a changing world by Samara Cohen, Robert Hum, Eric Metz, CFA, Jessica Tan, and Elise Terry, March 27, 2025.
