Fixed income not doing much for you? You can buff that out.

Active ETFs are often marketed as vehicles to beat the market and generate outsized gains. Historically, though, most active strategies have struggled to outperform passive investing over long periods. Goldman Sachs argues advisors may be thinking about the category the wrong way. Instead of replacing core equity exposure, some active ETFs, particularly buffer funds, may work better as substitutes for part of a portfolio’s fixed-income allocation.

Clients generally hold bonds and cash not because they maximize returns, but for ballast. Recessions, layoffs, medical bills, college tuition and home purchases all create a need for stability and liquidity. Proponents say…