 The
FT Buffered Allocation Defensive ETF (BUFT) is an exchange-traded fund
(ETF) that aims to provide investors with downside protection by
utilizing a “buffer” strategy. The fund invests in a combination of
exchange-traded funds (ETFs) and cash, aiming to offer a degree of
downside protection while maintaining long-term growth potential.
BUFT is actively managed and seeks to achieve its investment
objective by allocating its assets between equity and fixed-income
ETFs, as well as cash or cash equivalents. The fund utilizes a
proprietary quantitative model to allocate its assets, taking into
consideration factors such as market volatility, valuation metrics,
and economic indicators.
The buffer strategy used by BUFT is
designed to limit losses in the event of a significant market
downturn. The fund aims to provide investors with a buffer against
losses of up to 10% for a specific period, after which point investors
would experience the full downside risk of the market. The fund’s
buffer period is reset on an annual basis, typically in January.
BUFT is suited for investors who are seeking long-term growth
potential while also desiring a degree of downside protection. The
fund may be particularly attractive to investors who are nearing
retirement and wish to reduce their exposure to market volatility.
It is important to note that the use of a buffer strategy does not
eliminate all risk, and investors may still experience losses.
Additionally, the fund’s performance may be impacted by factors such
as interest rate changes, changes in economic conditions, and
geopolitical events.
As with any investment, it is important
for investors to carefully consider their individual financial goals,
risk tolerance, and investment time horizon before making an
investment in BUFT or any other ETF.
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