Investment manager CBOE Vest Financial has launched a mutual fund providing investors with index-based buffer protection. The CBOE Vest S&P 500 Buffer Protect Strategy (BUIGX) tracks the CBOE S&P 500 Buffer Protect Index Balanced Series. It is a risk-managed investment which seeks to protect against some downside while allowing for gains from potential upside.
The protection strategy attempts to protect investors from the first 1o percent of an investment’s decline. The trade-off is some upside.
“We believe the fund will appeal to investors who want to participate in the broad market but are concerned about risk,” senior managing director Steve Neamtz said. “Our fund is expected to deliver a level of downside protection while still allowing investors to participate in gains, offering a clearly defined risk profile relative to the broad market.
“It may help give investors the confidence to stay in the market rather than wait on the sidelines for things to improve.”
The Buffer Protection Strategy Fund invests in a series of 12 monthly rolling tranches of a “Buffer Protect” option strategy, with every trance targeting returns or losses on the S&P 500 Index price performance (before fees and expenses) from the third Wednesday of that month to the third Wednesday of the same month one year later. Gains will be provided up to a capped level.