YJUN Profile
The FT Cboe Vest International Equity Buffer ETF - June is designed to offer investors targeted exposure to international equities through a unique options-based investment strategy. Under normal market conditions, the fund allocates nearly all of its assets into FLexible EXchange Options (FLEX Options) linked to the performance of the iShares MSCI EAFE ETF (the underlying ETF). These FLEX Options are bespoke equity or index options that trade on exchanges, providing investors with the flexibility to tailor contract terms, including exercise prices, styles, and expiration dates.
FLEX Options are advanced financial instruments that allow for customizable investment exposure to the underlying index. By investing in these options, the fund aims to closely track the performance of the underlying ETF, which itself provides broad exposure to large- and mid-cap companies in Europe, Australasia, and the Far East (EAFE). This customization capability is designed to offer investors targeted risk management and return potential based on their investment objectives.
The funds strategy focuses on leveraging FLEX Options to create a buffer against potential market downturns while seeking to capitalize on the performance of international equities. By using these options, the fund can potentially limit losses up to a certain point while still participating in the upside performance of the underlying ETF. This approach is intended to provide investors with a more controlled risk profile compared to direct equity investments.
It is important to note that the fund is non-diversified, meaning it does not spread its investments across a broad range of securities. Instead, it concentrates its assets in a specific investment strategy involving FLEX Options on the underlying ETF. This concentrated approach allows the fund to implement its tailored investment strategy effectively but also entails risks associated with the use of specialized financial instruments and market concentration.
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