New Filing For Buffered ETFs

January 24, 2019

First Trust recently filed with the SEC to launch its own family of defined-outcome ETFs that will compete with the first-of-their-kind ETFs offered by Innovator ETFs. The First Trust Buffer April ETF and First Trust Ultra Buffer April ETF will offer limited downside protection and capped upside opportunity, just like the Innovator ETFs.

The “Buffer” fund will track the S&P 500 Price Return Index up to a yet-to-be-determined maximum return, while protecting investors against the first 10% of losses. The “Ultra Buffer” fund will track the same index with its own yet-to-be-determined upside cap, and protect investors from losses greater than 5% and less than 35%, according to the funds’ prospectus.

The funds achieve their investment objectives by investing in FLexible Exchange (FLEX) options tied to the S&P 500 Price Index. The initial target outcome period runs from April 1, 2019 through March 31, 2020, resetting with new upside caps for both funds as of April 1, 2020.

Innovator Capital Management has launched three clusters of similar ETFs, also tied to the S&P 500 Price Return Index and investing in FLEX options. The trios of funds reset in July, October and January, and offer varying degrees of upside exposure and downside protection.

The filing did not include tickers, expense ratios or a listing exchange.

Contact Heather Bell at [email protected]

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