Buffer ETFs protect against the downside while capping the upside. We examine them closely to see if they are worth it.

Topics covered include:

• How buffer ETFs are structured and some current examples
• How buffer ETFs have performed over the past five years
• What are the risks of buffer ETFs
• How loss aversion and narrow framing contribute to the popularity of buffer ETFs
• Are buffer ETFs worth it and what are some alternative strategies that could be used instead

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Show Notes

BlackRock Enters Booming Market for Stock ETFs With a 100% Hedge by Emily Graffeo—Bloomberg

New Stock ETF Offers 100% Hedge as Buffer Funds Nab $46 Billion by Emily Graffeo—Bloomberg

The Dynamics of Defined Outcome Exchange Traded Funds by Luis García-Feijóo and Brian Silverstein—SSRN

Monetizing Loss Aversion for Fun and Profit—Paul Kedrosky

Thirty Years of Prospect Theory in Economics: A Review and Assessment by Nicholas C. Barberis—Journal of Economic Perspectives

Prospect Theory: An Analysis of Decision Under Risk by Daniel Kahneman and Amos Tversk—ECONOMETRICA

Investments Mentioned

Innovator U.S. Equity Ultra Buffer ETF - January Series (UJAN)

Innovator U.S. Equity Ultra Buffer ETF - June Series (UJUN)

iShares Large Cap Max Buffer Jun ETF (MAXJ)

Innovator U.S. Equity Accelerated 9 Buffer ETF (XBJL)

SPDR S&P 500 ETF Trust (SPY)

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