Buffer funds can shield against a wide range of losses should their respective gauges drop, though the most popular ones tend to be in the 15% buffer range, according to Bloomberg Intelligence. Yet, Innovator says that its TJUL fund — which will track S&P 500 returns up to a capped percentage over a two-year period — will be the first of its kind to protect against 100% of stock losses. TJUL’s cap on potential gains is estimated at about 15% after fees.
Specifically, the fund will invest at least 80% of its net assets in options on the $423 billion SPDR S&P 500 ETF Trust (ticker SPY), according to the fund’s prospectus. TJUL can purchase and sell a combination of call and put options in an effort to cushion against market volatility.
Source: ETF That Offers 100% Downside Protection During Selloffs Debuts – Bloomberg
