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Trump hinted at ceasefire talks with Iran, JPMorgan recently cut S&P 500 Index target due to Middle East tensions. Here are hedged ETFs to navigate volatility.
AI stock volatility is pushing investors toward buffer ETFs like BUFR and BUFQ, offering downside protection while maintaining exposure to equity market upside.
FT Vest Laddered Buffer ETF (BUFR) offers S&P 500 exposure with a 10% downside buffer, ideal for cautious investors in today's stretched market. BUFR uses a laddered structure of monthly buffer ETFs, capping upside but providing significant downside protection through a collar strategy. Historic performance shows BUFR outperforms peers on risk-adjusted returns, with lower volatility and drawdowns than the S&P 500 index.
BUFR offers risk-averse investors a laddered buffer strategy, limiting downside to 10% while providing partial upside participation via a basket of 14 ETFs. The fund uses a collar options strategy, layering expiration dates to ensure ongoing upside potential and reduce the need for frequent fund switching. Downside protection only applies at expiration and to the initial launch price, so timing of purchase affects the actual buffer and risk exposure.
We highlight some prominent defined outcome ETFs that offer downside protection to the major indices.
Investors should consider applying hedging techniques to their equity portfolio to reduce overall volatility.
Markets are coming off back-to-back gains of more than 20% each on an annual basis. That's historically rare, and the chances of a hat trick in 2025 are slim to none.
On Monday, First Trust Advisors expanded its suite of Target Outcome ETFs with the launch of the FT Vest U.S. Equity Equal Weight Buffer ETF – December (RSDE). RSDE's goal is to provide investors with access to the returns from the Invesco S&P 500 Equal Weight ETF (RSP), up to a cap.
SEC filings for BUFR aren't indexed yet — common for recently launched funds. Browse the issuer's filings on SEC EDGAR directly.