How Are Laddered Buffer ETFs Doing?

A buffer exchange-traded fund (ETF) is designed to limit losses while capping gains over a specific period, usually one year, generally by combining a position in put and call options on a stock index with an ETF that tracks that index. Laddered buffer ETFs smooth this approach by holding a rolling series of buffer ETFs with staggered expiration dates, thereby imposing two layers of fund costs. How do laddered buffer ETFs perform? To investigate, we consider five of the largest such ETFs, all currently available, as follows:

• • FT Vest Laddered Buffer ETF (BUFR)
  • Pacer Swan SOS Fund of Funds ETF (PSFF)
  • FT Vest Laddered Deep Buffer ETF (BUFD)
  • Innovator Laddered Allocation Buffer ETF (BUFB)
  • FT Vest Laddered Nasdaq Buffer ETF (BUFQ)

We use SPDR S&P 500 ETF Trust (SPY) as the benchmark for the first four and Invesco QQQ Trust (QQQ) for the last. We focus on monthly return statistics, along with compound annual growth rates (CAGR) and maximum drawdowns (MaxDD). Using monthly total returns for the five laddered buffer ETFs, SPY and QQQ as available through February 2025, we find that:

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