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BUFG - FT Buffered Allocation Growth ETF

FT Buffered Allocation Growth ETF logoThe FT Buffered Allocation Growth ETF (BUFG) is an actively managed exchange-traded fund (ETF) that seeks to provide capital appreciation with a secondary focus on capital preservation. The fund invests in a diversified mix of underlying ETFs and fixed-income securities with the aim of providing investors with market exposure while limiting downside risk through a buffered investment strategy.

The BUFG ETF aims to maintain a target allocation of 75% to 100% in equity ETFs and a target allocation of 0% to 25% in fixed-income ETFs or cash equivalents. The equity portion of the portfolio will be diversified across various sectors and geographies, while the fixed-income portion of the portfolio will be invested in a diversified mix of investment-grade fixed-income ETFs.

The fund uses a buffered investment strategy that seeks to limit downside risk by investing in put options on the S&P 500 Index. The put options provide a level of downside protection, allowing the fund to participate in the upside potential of the market while mitigating losses in the event of a market downturn. The level of downside protection is determined by the buffer percentage, which represents the amount of decline the fund is designed to absorb before the put options begin to provide protection.

BUFG is managed by First Trust Advisors, a leading provider of ETFs and mutual funds. The fund has an expense ratio of 0.75% and is traded on the NYSE Arca exchange. BUFG is a relatively new fund, having been launched in October 2021.

As with any investment, it's important to carefully consider the risks and potential rewards before investing in the FT Buffered Allocation Growth ETF. While the buffered investment strategy can help limit downside risk, it's important to note that there is no guarantee that the fund will achieve its investment objectives, and investors may still experience losses. Additionally, the use of derivatives such as put options can add complexity and increase risk to the fund. Investors should carefully review the fund's prospectus and consult with their financial advisor before making any investment decisions.




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