Bringing you live news and features since 2006 

CBOE Vest launches S&P 500 Buffer Protect Strategy Fund


CBOE Vest Financial, an investment manager focused on target outcome investment strategies, has launched the CBOE Vest S&P 500 Buffer Protect Strategy Fund (BUIGX), the first mutual fund designed to provide investors with index-based buffer protection.

The fund is designed to track the CBOE S&P 500 Buffer Protect Index Balanced Series (SPRO), providing a risk-managed investment that seeks to protect against some downside losses in the S&P 500 Index, while still participating in potential upside.
The buffer-protection strategy seeks to shield investors from the first 10 per cent of a decline in their investment, in exchange for giving up some upside.
“We believe that the fund will appeal to investors who want to participate in the broad market but are concerned about risks,” says Steve Neamtz (pictured), senior managing director at CBOE Vest Financial. “Our fund is expected to deliver a level of downside protection while still allowing investors to participate in gains, offering a clearly defined risk profile relative to the broad market.”
Although buffer protection strategies have been recognised as useful risk-management tools in the past, the fund is the first index-based mutual fund to make such a strategy available.
Buffer protection also offers advantages to investors by potentially allowing them to avoid the pitfalls of market timing.
“This allows investors to stay invested in the broad equity markets during a market downturn, with a ‘safety net’ for that first 10 per cent of losses,” says Neamtz. “It may help give investors the confidence to stay in the market rather than wait on the sidelines for things to improve.”
Built to mitigate volatility and help drawdown-sensitive investors stay invested, the Buffer Protect Strategy Fund invests in a series of 12 monthly rolling “tranches” of a “Buffer Protect” option strategy.
Each tranche seeks to target, before fees and expenses, returns or losses on the price performance of the S&P 500 Index from the third Wednesday of that month to the third Wednesday of the same month the following year. In return for the strategy’s 10 per cent downside protection, each tranche will provide gains on the index up to a capped level.
The Buffer Protect Strategy Fund’s approach to protective investing is unique when compared with other funds aimed at lowering investors’ risk profiles, in particular low beta or low volatility funds.
The fund “uses options with contractual levels of certainty against some losses,” Neamtz adds. “We’re extremely excited to be bringing this product to market because of the multitude of uses it offers for client portfolios.
“Investors have been really challenged by the flaws inherent in market timing. We believe this product can serve as a cornerstone tool for advisors and clients to utilise as a core holding, with a definable level of protection and opportunity.”

Latest News

Figment Europe, a provider of institutional staking infrastructure, writes that it is solidifying its presence in the heart of Europe’s..
Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..

Related Articles

Sal Esposito, Zacks Investment Management
Zacks Investment Management started doing investment research in 1978 and in 1992 started its investment management arm, initially with SMAs...
Jeremy Senderowicz, Vedder Price
Jeremy Senderowicz, a member of the Investment Services Group at law firm Vedder Price, has witnessed a steady upswing in...
Graham MacKenzie, Toronto Stock Exchange
The evolution of ETFs has been a multi-decade experience for Toronto Stock Exchange says Graham MacKenzie, managing director, Exchange Traded...
Frank Koudelka, State Street Global Services
ETF data provider and ETF Express data partner, Trackinsight, has published its Global ETF Survey 2024 Report: ‘50+ Charts on...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by