FEBM
FT Vest U.S. Equity Max Buffer ETF - February
📎 Investment Objective
The FT Vest U.S. Equity Max Buffer ETF - February (FEBM) seeks to provide investors with exposure to the U.S. equity market while aiming to limit downside risk during market downturns.
Overview
ETF tracking FT Vest U.S. Equity Max Buffer ETF - February
Performance
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Investment Summary
📎 Investment Objective
The FT Vest U.S. Equity Max Buffer ETF - February (FEBM) seeks to provide investors with exposure to the U.S. equity market while aiming to limit downside risk during market downturns.
🎯 Investment Strategy
FEBM utilizes a buffered outcome strategy, which aims to provide investors with upside participation in the U.S. equity market up to a cap, while limiting downside risk to a predetermined buffer level. The fund achieves this by investing in a portfolio of options contracts that are reset on an annual basis in February.
✨ Key Features
- Seeks to limit downside risk to a predetermined buffer level (e.g. 10-20%) during market downturns
- Provides upside participation in the U.S. equity market up to a cap (e.g. 10-20%)
- Resets the option portfolio annually in February to maintain the buffer and cap levels
- Designed as a long-term investment to be held until the next annual reset
⚠️ Primary Risks
- Market risk: The fund's performance is tied to the U.S. equity market and may experience significant volatility
- Capped upside potential: The fund's upside participation is limited by the cap, which may be lower than the market's return
- Reset risk: The fund's buffer and cap levels are reset annually, which may result in less favorable terms in subsequent years
- Liquidity risk: The fund's options-based strategy may result in lower liquidity compared to traditional equity funds
👤 Best For
FEBM may be suitable for investors seeking U.S. equity exposure with a degree of downside protection, who have a medium to long-term investment horizon and are willing to accept the fund's capped upside potential and reset risk.