'Boomer Candy,' or Buffered ETFs, See Rising Demand
Demand for buffered strategies rises with market volatility and investor uncertainty.
Buffered ETFs have become the latest darling of financial advisors for their comfortable guardrails designed to keep nervous investors from fleeing toward the sidelines.
There’s a reason these strategies are sometimes called “Boomer Candy,” and for financial advisors they fit nicely into a toolbox of strategies because there’s just enough nuance to require the services of a trusted advisor.
Well, the good news and maybe bad news along those lines is that the category is fast evolving, and the latest developments could make these ETFs that tend to mature in 12-month cycles easier for casual investors to understand and use.
Buffered ETFs and Downside Protection
In addition to a spike in the classic buffer that offers varying degrees of downside protection in exchange for a cap on upside performance if held for the duration of the ETF, the growth is now occurring in the area of 100% downside protection.
That means no matter what the underlying index does over the full 12-month cycle of the ETF, the investor is guaranteed a return of principal. As expected, the tradeoff for such loss protection is a limit on upside performance.
While these buffered ETFs–also known as defined outcome ETFs–are designed to automatically roll into the next version once they mature, some investors and advisors might not want to deal with that wrinkle.
BUFR Assets Grow
And for proof of that appetite for ease of use, look no further than the FT Cboe Vest Fund of Buffer ETF (BUFR), which is a laddered fund of buffered ETFs that has swelled to more than $5 billion over the past four years.

That’s the kind of momentum Calamos Investments hopes to generate with its new Calamos Laddered S&P 500 Structured Alt Protection ETF (CPSL), which is a laddered portfolio of ETFs offering 100% downside protection.
There’s no reason to believe CPSL won’t take off in stride with BUFR and there’s also no reason to believe we won’t see more of this kind of innovation in the buffered ETF space.
The only question to ask at this point is, are these popular strategies that tamp down upside gains and are not cheap right for everyone?