First Trust Debuts October Buffer ETFs

October 19, 2020

Today, First Trust launched two more ETFs in its family of defined outcome ETFs. The FT Cboe Vest U.S. Equity Buffer ETF – October (FOCT) and the FT Cboe Vest U.S. Equity Deep Buffer ETF – October (DOCT) bring the lineup that much closer to completion, with only the months of December, January, March and April missing now.

Both ETFs come with an expense ratio of 0.85% and list on Cboe Global Markets, the parent company of ETF.com.

DOCT and FOCT 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.

 

How They Work

The funds cover an outcome period ranging from Oct. 19, 2020 through Oct. 15, 2021. FOCT will allow investors to receive upside returns up to 16.22% before fees while protecting against declines of up to 10% before fees. Meanwhile, DOCT will allow investors to experience positive returns of up to 9.34% before fees while protecting them from declines of more than 5% and up to 30% before fees.

The actively managed portfolios for both DOCT and FOCT 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 family of 14 existing ETFs currently has $1.5 billion in assets under management. The new additions bring the total number of funds in the family to 16.

Contact Heather Bell at [email protected]

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