 FT
U.S. Equity Deep Buffer ETF August (DAUG) is an exchange-traded fund
offered by Innovator Capital Management. It is part of their “Defined
Outcome ETF” series, which offers exposure to equity markets while
providing downside protection through the use of options.
The
DAUG ETF aims to provide investors with exposure to the S&P 500 Index
while limiting the downside risk in the event of a decline in the
market. The fund is designed to provide a buffer against the first 15%
of losses in the S&P 500 Index during the period from August to
September of each year, using a combination of cash and options. The
fund does not provide any upside participation beyond this buffer.
The DAUG ETF charges an expense ratio of 0.79%, which is
relatively high compared to other passive index ETFs. As with all
defined outcome ETFs, the fund’s performance is dependent on the
options contracts it holds, which can be complex financial
instruments. As such, investors should carefully review the fund’s
prospectus and consult with a financial advisor before investing.
It is impportant to note that the buffer offered by the DAUG ETF
does not provide complete protection against losses in the market.
Investors should be aware that the fund’s value will decline if the
S&P 500 Index declines by more than 15% during the defined outcome
period. Additionally, the buffer resets each year, so the fund’s
protection is only effective during the specified time period.
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