First Trust Expands Its Target Outcome ETFs Lineup With December Enhance & Moderate Buffer ETF Series

December series offers exposure to twice any positive price returns of SPY up to a predetermined cap

Provides a buffer against the first 15% of losses

First Trust Advisors L.P. a leading exchange-traded fund (“ETF”) provider and asset manager, announced that it launched the December Enhance & Moderate Buffer ETF Series of Target Outcome ETFs: the FT Cboe Vest U.S. Equity Enhance & Moderate Buffer ETF–December . The fund is the latest addition to First Trust’s suite of Target Outcome ETFs with Buffer Strategies, which has over $3.6 billion in total net assets as of 11/30/21 and is among the fastest growing in the outcome oriented ETFs space.

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The fund seeks an outcome that provides investors with returns (before fees and expenses) of approximately twice any positive price return of the SPDR S&P 500 ETF Trust (“SPY” or “underlying ETF”), up to a predetermined upside cap, while providing a buffer against the first 15% of potential SPY losses over a specific Target Outcome Period. The fund is managed and sub-advised by Cboe Vest Financial LLC (“Cboe Vest”) using a “target outcome strategy” or pre-determined target investment outcome. Cboe Vest is the creator of Target Outcome Investments^® and manager of the longest running buffer strategy fund.

The upside caps shown are for the Target Outcome Period from 12/20/2021 – 12/16/2022. The gross cap is before fees, expenses and taxes. The net cap is after fees and expenses, excluding brokerage commissions, trading fees, taxes and extraordinary expenses not included in the funds’ management fee. The upside cap is set by a fund on inception date of the Target Outcome Period and is dependent upon market conditions at the time. The cap investors will experience may be different than what is illustrated herein.

FT Cboe Vest U.S. Equity Enhance & Moderate Buffer ETFs seek to shield investors against losses from 0% to -15%, over the Target Outcome Period, before fees and expenses.

If an investor purchases shares after the first day of the Target Outcome Period, they will likely have a different return potential and buffer than an investor who purchased shares at the start of the Target Outcome Period and the buffer the fund seeks may not be available. At the end of the Target Outcome Period, the upside cap for the new Target Outcome Period is reset to prevailing market conditions. The fund has a perpetual structure and may be held indefinitely, providing investors a buy and hold investment opportunity.

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First Trust believes a buffer against a level of losses can help investors stay invested during volatile times. XDEC offers a way to gain access to outcome-based investing—specifically to buffer against a level of downside risk while allowing enhanced growth to a maximum cap—eliminating bank credit risk in a convenient, flexible investment vehicle.

Karan Sood, CEO of Cboe Vest said, “For some investors, the ability to potentially enhance upside returns is as critical as their need to shield some downside losses. The Enhance & Moderate Buffer ETF Strategy is designed to strike the right balance of a downside buffer and enhanced capped upside in moderately volatile market regimes. We are pleased to work with First Trust to bring the December series to market.”

Karan Sood and Howard Rubin, of Cboe Vest, will serve as a portfolio managers for the funds. The portfolio managers are jointly and primarily responsible for the day-to-day management of the funds.

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