Today, First Trust further expanded its lineup of defined outcome ETFs, which until today included 10 ETFs.
The new FT Cboe Vest U.S. Equity Buffer ETF – July (FJUL) and the FT Cboe Vest U.S. Equity Deep Buffer ETF – July (DJUL) 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. FJUL will allow investors to receive upside returns up to 14.95% before fees while protecting against declines of up to 10% before fees. Meanwhile, DJUL will allow investors to experience positive returns of up to 8.40% before fees while protecting them from declines of more than 5% and up to 30% before fees.
The actively managed portfolios for both DJUL and FJUL 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 12 ETFs currently has more than $1 billion in assets under management.