Markets have been in turmoil this year due to uncertainty related to tariffs and trade wars. Defined outcome or “buffer” ETFs, which use derivatives to provide market upside participation up to a cap while limiting downside risk, have become increasingly popular with investors.
This is one of the fastest-growing ETF categories, especially since 2022, when both stocks and bonds delivered dismal returns. Interest in these strategies has surged this year, with investors pouring in about $7 billion.
This post originally appeared at Zacks.