Today, First Trust rolled out another two additions to its new lineup of defined outcome ETFs that debuted a little over a week ago. The FT Cboe Vest U.S. Equity Buffer ETF – January (FJAN) and the FT Cboe Vest U.S. Equity Deep Buffer ETF – January (DJAN) both allow investors to participate in the upside of the market up to a cap that is reset annually while receiving protection from declines up to a certain percentage.
Both ETFs come with an expense ratio of 0.85% and list on Cboe Global Markets, the parent company of ETF.com.
How They Work
The funds cover an outcome period ranging from Jan. 19, 2021, through Jan. 21, 2022. FJAN will allow investors to receive upside returns up to 14.50% before fees while protecting against declines of up to 10% before fees. Meanwhile, DJAN will allow investors to experience positive returns of up to 8.20% before fees while protecting them from declines of more than 5% and up to 30% before fees.
The actively managed portfolios for both DJAN and FJAN hold baskets of flexible exchange options (FLEX) tied to the SPDR S&P 500 ETF Trust (SPY) with the overall aim of reflecting the performance of SPY within their predetermined limits.
The original First Trust ETFs in the firm’s new family included the FT Cboe Vest U.S. Equity Deep Buffer ETF – August (DAUG) and FT Cboe Vest U.S. Equity Buffer ETF – August (FAUG), and these latest additions bring the total lineup of the firm’s defined outcome ETFs tied to the S&P 500 Index to 20. Funds for March and April have yet to launch. First Trust has also initiated lines of similar ETFs tied to the Nasdaq-100 Index and the MSCI EAFE Index.
Contact Heather Bell at [email protected]