First Trust Builds Out Buffer ETF Family

Today, First Trust further expanded its lineup of defined outcome ETFs, which until today included eight ETFs. The new FT Cboe Vest U.S. Equity Buffer ETF – June (FJUN) and the FT Cboe Vest U.S. Equity Deep Buffer ETF – June (DJUN) 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 June 22, 2020 through June 18, 2021. FJUN will allow investors to receive upside returns up to 17.72% before fees while protecting against declines of up to 10% before fees. Meanwhile, DJUN will allow investors to experience positive returns of up to 10.28% before fees while protecting them from declines of more than 5% and up to 30% before fees.

The actively managed portfolios for both DJUN and FJUN 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.

First Trust also offers similar buffer ETFs that reset in February, May, August and November. The family of 10 ETFs currently has more than $1 billion in assets under management.

Contact Heather Bell at [email protected]