BUFFER ETFS ALLOW INVESTORS TO RESPHAPE the return profile of an investment in the stock market. By accepting a limit on growth (upside cap), Buffer ETFs provide a built-in buffer against loss, over a defined outcome period (typically 12 months). At the end of the outcome period, the ETFs automatically roll to a new outcome period, in a tax-efficient manner. On the reset date, the ETFs provide fresh downside protection and a new upside cap, making these investments suitable for long-term investors.
Four Key Components:
- Reference Asset
- Downside Buffer
- Upside Cap
- Outcome Period
