Investing for outcomes

Good for: Prioritizing alternative sources of monthly income.

Key takeaways:

• Income: Seeks to enhance income through the sale of monthly call options.
• Diversification: Provides the potential to outperform the benchmark in flat or falling markets (Equity BuyWrite ETFs) or in periods of flat to rising interest rates and widening credit spreads (Bond BuyWrite ETFs).
• Easy access: Convenient and cost-effective access to an options strategy makes it possible for all investors to easily take advantage of this approach.

Good for: A monthly source of income and the potential for long-term growth.

Key takeaways:

• Income: Like the BuyWrite ETFs, BALI and BALQ seek enhanced monthly income by investing in large-cap stocks and selling call options.
• Growth: The funds also offer growth potential, seeking to participate in market upswings by investing in a combination of large cap stocks and index futures.
• Actively managed: BALI and BALQ utilize a data-driven, systematic approach managed by a team with over 40 years of investing experience.

Good for: The confidence of knowing your portfolio is equipped to weather even the worst days.

Key takeaways:

• Market participation: Guards against drawdowns while still maintaining some upside potential, up to an approximate cap.
• Downside protection: Seeks to mitigate drawdowns and dampen volatility within a downside buffer range.
  • Max buffers seek to provide full downside protection over each 12-month hedge period.
  • 10% buffers seek to provide downside protection against the first 10% of underlying ETF losses over each 12-month hedge period.
  • Laddered ETFs seek to provide a more consistent experience by holding multiple buffers with staggered maturities.
• Clearer outcomes: Seeks clearer outcomes over a known period to stay invested in volatile markets.

Good for: Enhancing growth potential during periods of low to moderate equity market returns.

Key takeaways:

• Seek enhanced return: Targets 2x upside participation with the underlying ETF up to a cap and 1x downside participation over the course of each calendar quarter.
• Easy access: Convenient, liquid, and cost-effective access to an options-based accelerated return strategy.
• Clearer outcomes: Seeks to help investors reach investment goals by targeting clearer outcomes over a known period.

Timing matters

When it comes to purchasing an accelerated ETF, timing matters. Here’s what to consider when purchasing the fund after the start of the outcome period:

• When the price of the accelerated ETF is at or below the start of the acceleration zone, returns may not be accelerated until the price of the accelerated ETF reaches the acceleration zone.
• When the price of the accelerated ETF is within the acceleration zone, investors may experience 2x upside and 2x downside participation with the underlying ETF.
• When the price of the accelerated ETF is above the acceleration zone, the upside participation is limited. Investors may also experience 2x downside participation if the underlying ETF falls within the acceleration zone.

Returns may vary depending on when an investor enters or exits their position in an accelerated return ETF, the time left in the outcome period, volatility and the value of the options that create the cap, among other factors. As such, these products may be best suited as buy and hold investments.