In this section let’s compare various Barrier and Buffer Income Return scenarios. We’ll look at hypothetical examples of the reference asset finishing below, above, and within the barrier or buffer level to illustrate the return differences. For an “apples-to-apples” comparison, in the tables shown below, we’ll assume a 15% Barrier and a 15% Buffer with a 6% distribution rate.
Scenario 1: S&P 500 finishes inside the buffer or barrier: 15% Buffer vs. 15% Barrier, 7% distribution rate
| Scenario Recap | Price Return | Income Return | Total Return |
| S&P 500 | -10% | 0% | -10% |
| Barrier ETF | 0% | 7% | 7% |
| Buffer ETF | 0% | 7% | 7% |
Scenario 2: S&P 500 finishes below the buffer or barrier: 15% Buffer vs. 15% Barrier, 7% distribution rate
| Scenario Recap | Price Return | Income Return | Total Return |
| S&P 500 | -20% | 0% | -20% |
| Barrier ETF | -20% | 7% | -13% |
| Buffer ETF | -5% | 7% | 2% |
Scenario 3: S&P 500 finishes above the buffer of barrier: 15% Buffer vs. 15% Barrier, 7% distribution rate
| Scenario Recap | Price Return | Income Return | Total Return |
| S&P 500 | 15% | 0% | 15% |
| Barrier ETF | 0% | 7% | 7% |
| Buffer ETF | 0% | 7% | 7% |
Let’s look at more hypothetical examples of the reference asset finishing below, above, and within the barrier or buffer level to illustrate the return differences. Again, for an “apples-to-apples” comparison, let’s assume a 20% Barrier and a 20% Buffer with a 6% distribution rate.
Scenario 1: S&P 500 finishes inside the buffer or barrier: 20% buffer vs. 20% barrier, 6% distribution rate
| Scenario Recap | Price Return | Income Return | Total Return |
| S&P 500 | -15% | 0% | -15% |
| Barrier ETF | 0% | 6% | 6% |
| Buffer ETF | 0% | 6% | 6% |
Scenario 2: S&P 500 finishes below the buffer of barrier: 20% buffer vs. 20% barrier, 6% distribution rate
| Scenario Recap | Price Return | Income Return | Total Return |
| S&P 500 | -30% | 0% | -30% |
| Barrier ETF | -30% | 6% | -24% |
| Buffer ETF | -10% | 6% | -4% |
Scenario 3: S&P 500 finishes above the buffer or barrier: 20% buffer vs. 20% barrier, 6% distribution rate
| Scenario Recap | Price Return | Income Return | Total Return |
| S&P 500 | 15% | 0% | 15% |
| Barrier ETF | 0% | 6% | 6% |
| Buffer ETF | 0% | 6% | 6% |
The hypothetical graphical illustrations provided above are designed to illustrate the Outcomes based on hypothetical performances of the underlying ETFs if a shareholder holds the ETF shares for the entirety of the outcome period. There is no guarantee that an ETF will be successful in its attempt to provide the outcomes. The tables do not represent all market scenarios or actual buffer or barrier levels that are available in the ETF marketplace. The returns ETFs seek to provide do not include the costs associated with purchasing shares of the ETF and certain expenses incurred by the ETF.