first trust buffered etf
Published by on November 13, 2020
Prior to the expiration date, the value of the FLEX Options will be determined based upon market quotations or other recognized pricing methods. Expense ratio for FNOV and DNOV is 0.85%. The funds are managed and sub-advised by Cboe Vest Financial LLC (“Cboe Vest”) using a “target outcome strategy” or pre-determined target investment outcome. That’s all there is to it: you have a known, defined pattern of returns for the full year, and lower volatility ride along the way. If the market goes up, you get to buy at today’s prices, sell at next year’s prices when June rolls around, and you get the price return of the index. For more information, visit www.ftportfolios.com. Information about your device and internet connection, including your IP address, Browsing and search activity while using Verizon Media websites and apps. DFEB is the largest actively managed Buffer ETF, according to data from Morningstar as of 10/31/2020. DNOV is the fifth fastest growing ETF in 2020, behind DAUG, which holds its spot at number one. The prospectus or summary prospectus should be read carefully before investing. "The November Series of Target Outcome ETFs® did just what they were designed to do during their initial outcome period," according to Ryan Issakainen, CFA, ETF Strategist at First Trust. But I was hopeful: I believed then, and I believe now, that ETFs that shape the pattern of returns available in the risk markets are incredibly useful tools. Performance data quoted represents past performance. The “Flexible” part means that the specific terms of the option are negotiated between the buyer and the seller, the “Exchange” part means they trade on an options exchange (like the Cboe), which also means they are cleared and settled just like options. They’ve filed for additional products targeting fixed-income indexes as well. While the S&P peaked at up 5% in February, you were up only a few percents. While these are relatively new products in the ETF space, the idea behind these products is nothing new, having been baked into structured products, SMAs, and even some mutual funds for years. It’s easy to look at the ETF landscape and wonder if we have enough, or even too many products. But this generally still would leave the fund with a pretty expensive hedge, so to neutralize that expense, the fund also sells call options at a level where the premium collected offsets the remainder of the expense in buying the downside protection. Importantly, all of the products launched to date assume a one-year holding period. Cboe® is a registered trademark of Cboe Exchange, Inc., which has been licensed for use in the name of the funds. To access the full list of ETFs visit, https://etfdb.com/themes/buffered-etfs/. The funds have characteristics unlike many other traditional investment products and may not be appropriate for all investors. Indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. ETFs combine the characteristics of a mutual fund with the convenience and trading flexibility of stocks. As a result, the cap may rise or fall from one target outcome period to the next and is unlikely to remain the same for consecutive target outcome periods. is the fund's benchmark. Information about your device and internet connection, including your IP address, Browsing and search activity while using Verizon Media websites and apps. To get the downside buffer, the fund purchases puts, again, at today’s prices. Ryan Issakainen So if you’re purchasing a June-dated buffered ETF, you own a bunch of calls on the S&P 500, dates June next year. Indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. You want some exposure to the upside, but you’re nervous. Prior to the expiration date, the value of the FLEX Options will be determined based upon market quotations or other recognized pricing methods. The funds have characteristics unlike many other traditional investment products and may not be appropriate for all investors. Cboe Vest is the creator of Target Outcome Investments®, which strive to buffer losses, amplify gains or provide consistent income to a diverse spectrum of investors. First Trust is a federally registered investment advisor and serves as the funds’ investment advisor. You should consider the funds’ investment objectives, risks, and charges and expenses carefully before investing. First Trust's Buffer ETFs are among the fastest growing in the Target Outcome/defined outcome space, with over $1.5B in total net assets for the product line as of 10/31/2020. Sign up to receive our updates and other TMCnet news! First Trust has collective assets under management or supervision of approximately $149 billion as of September 30, 2020 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts. The cap may be different if the fund is purchased after the start of the Outcome Period. It’s important to realize that these are mathematically guaranteed outcomes if you hold the fund for the full period.
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