SMAY Profile
The FT Cboe Vest U.S. Small Cap Moderate Buffer ETF - May is designed to offer investors exposure to the performance of small-cap U.S. equities while providing a buffer against potential losses. The fund primarily invests its assets in FLEX Options, which are customizable equity or index options contracts. These contracts are specifically linked to the price performance of the iShares Russell 2000 ETF, a well-known benchmark for small-cap U.S. stocks.
FLEX Options, or Flexible Exchange Options, allow for greater customization compared to standard options contracts. Investors can tailor these options with specific terms such as exercise prices, option styles, and expiration dates. This customization enables the fund to align its investments closely with its objective of providing a moderate buffer against market declines while capturing the upside potential of small-cap stocks.
The funds strategy focuses on investing in FLEX Options to create a buffer against losses within a specified range, aiming to offer a level of protection against downturns in the small-cap market. By investing in these tailored options, the fund seeks to mitigate potential losses while maintaining exposure to the performance of the Russell 2000 Index, which tracks a diverse array of small-cap U.S. companies.
As a non-diversified fund, the FT Cboe Vest U.S. Small Cap Moderate Buffer ETF - May concentrates its investments in a specific asset class and financial instrument. This concentrated approach allows for targeted risk management and potential returns but also exposes investors to specific market risks related to the performance of the underlying ETF and the effectiveness of the FLEX Options strategy. Investors should be aware of the risks associated with options trading and the impact of market conditions on the funds performance.
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