New Listing

First Trust launches active S&P 500 buffer ETF

The ETF is designed to provide a buffer against potential losses

Tom Eckett

Derek Fulton

First Trust has expanded its UCITS ETF range with the launch of an actively-managed US equity buffer ETF.

The First Trust Cboe Vest U.S. Equity Moderate Buffer UCITS ETF (GAUG) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.85%.

GAUG is an actively-managed target outcome ETF that offers exposure to the S&P 500 via FLexible EXchange (FLEX) options.

The ETF is designed to provide a buffer against potential losses with the options maintaining a pre-defined level of 15% downside protection against the S&P 500. The strategy also has an upside cap.

GAUG’s outcome period runs for approximately one year until August 2024 before the cap and buffer are reset.

FLEX options are exchange-traded option contracts guaranteed for settlement by the Options Clearing Corporation.

GAUG is sub-advised by Cboe Vest, an asset manager that specialises in defined outcome strategies.

Derek Fulton (pictured), CEO of First Trust Global Portfolios, said: “Demand for buffer ETFs has increased as investment professionals seek new tools to navigate the equity market uncertainty.

“We are excited to bring this long-standing and successful target outcome risk management strategy to our European clients, who are looking for a more certain outcome.”

Jeff Chang, president of Cboe Vest President, added: “Today’s launch of GAUG satisfies a demand from European investors looking to add a level of protection to their equity exposure while participating in some of the potential growth opportunities that equities provide.”

This is the first UCITS ETF First Trust has launched this year. Last April, the firm unveiled a smart grid ETF, the First Trust Nasdaq Clean Edge Smart Grid Infrastructure UCITS ETF (GRID), which has gathered $74m assets under management (AUM) since launch.

Featured in this article


No ETFs to show.