Goldman Sachs' Liquid IPO Basket: Capturing Momentum in High-Growth Sectors

Goldman Sachs has launched a strategic innovation in the form of the Liquid IPO Index, a curated basket of recently public U.S. companies designed to capture early-stage market momentum in high-growth sectors. This product reflects the firm's confidence in a reinvigorated IPO market, where companies raised $32 billion in 2025 (excluding blank-check firms)—a stark contrast to the subdued activity of 2024Goldman Trading Desk Launches Liquid IPO Basket as Listings Soar^[1]. By focusing on liquidity, diversification, and timing, the basket positions investors to capitalize on the resurgence of public market activity while mitigating risks inherent in volatile environments.

Liquidity as a Strategic Advantage

The Liquid IPO Index prioritizes liquidity, a critical factor for managing risk and capital efficiency. According to Bloomberg, the basket includes companies that have been public for over 30 days, maintain a minimum daily trading volume of $5 million, and have an average market capitalization of at least $750 millionGoldman Trading Desk Launches Liquid IPO Basket as Listings Soar^[1]. These criteria ensure that the index avoids the extreme volatility often seen in newly listed companies, instead targeting securities with sufficient depth to support institutional participation. Goldman Sachs' own research underscores the resilience of highly liquid stocks during market turbulence, citing tech giants like NVIDIA and Apple as exemplars of this stabilityGoldman Sachs picks top sectors to own in 2025^[2]. By curating a portfolio of such assets, the Liquid IPO Basket offers investors a balanced approach to growth and risk management.

Diversification Across Sectors and Geographies

Goldman Sachs has strategically diversified the basket to span sectors poised for outperformance in 2025. The firm's top picks include Software & Services and Materials, driven by AI advancements and favorable valuationsGoldman Sachs picks top sectors to own in 2025^[2]. For instance, the Materials sector benefits from global supply chain shifts and infrastructure spending, while Software & Services thrives on the AI-driven productivity boom. Beyond U.S. markets, the firm has adjusted its portfolio to include emerging markets and European sectors, hedging against U.S.-centric risks and broadening exposure to global growth opportunitiesInvestor appetite on the rise as IPO market reopens^[3]. This diversification aligns with Goldman Sachs' broader 2025 outlook, which advocates for a “broader equity horizons” strategy to navigate geopolitical uncertainties and macroeconomic volatilityAsset Management Outlook 2025: Broader Equity Horizons^[5].

Timing the Market: A Favorable Macro Backdrop

The launch of the Liquid IPO Basket coincides with a pivotal inflection point in the IPO market. Goldman Sachs' IPO Issuance Barometer has climbed to 93, signaling conditions closer to historical normsGoldman Trading Desk Launches Liquid IPO Basket as Listings Soar^[1]. This improvement is fueled by stabilizing stock prices, improved CEO confidence, and a “soft landing” economic scenario favored by over half of surveyed investorsInvestor appetite on the rise as IPO market reopens^[3]. The firm's CEO, David Solomon, has explicitly linked the surge in IPO activity to deregulation, lower interest rates, and a thawing risk appetiteGoldman Sachs CEO Foresees a Surge in IPOs for 2025^[6]. Recent successful listings, such as eToro's public debut, further validate this optimismWhat fresh signs of life in the IPO market mean for Goldman Sachs^[4]. By systematically rebalancing the basket to include the latest IPOs, Goldman Sachs enables investors to ride the wave of momentum without overexposure to individual stocks.

Sector Focus: AI-Driven Software and Industrial Resilience

The basket's emphasis on Software & Services is particularly noteworthy. Goldman Sachs highlights AI as a catalyst for earnings growth in this sector, with companies leveraging machine learning to enhance productivity and customer engagementGoldman Sachs picks top sectors to own in 2025^[2]. Similarly, the Materials sector benefits from long-term structural trends, including green energy transitions and industrial automation. These sectors exemplify the firm's thesis of investing in “high-quality, durable growth” businessesGoldman Trading Desk Launches Liquid IPO Basket as Listings Soar^[1]. The inclusion of companies like Klarna Group plc and Netskope—both with Goldman Sachs as underwriters—further underscores the firm's alignment with its clients' interestsGoldman Sachs CEO Foresees a Surge in IPOs for 2025^[6].

Conclusion: A Structured Approach to Market Momentum

Goldman Sachs' Liquid IPO Basket represents a sophisticated tool for investors seeking to harness the momentum of high-growth sectors while mitigating liquidity and diversification risks. By leveraging macroeconomic tailwinds, strategic sector allocations, and rigorous liquidity criteria, the basket offers a disciplined approach to navigating the evolving public market landscape. As IPO activity continues to surge, this product positions investors to participate in the next wave of innovation without sacrificing prudence—a hallmark of Goldman Sachs' enduring investment philosophy.