First Trust has launched the First Trust Vest Nasdaq-100® Moderate Buffer UCITS ETF – December (QDEC), on the London Stock Exchange, offering investors the opportunity to participate in the growth potential of Nasdaq-100® companies while mitigating some of the inherent volatility.
QDEC is the latest addition to First Trust’s expanding suite of Target Outcome ETFs® in UCITS format.
Buffer ETFs seek to protect investors from a level of losses, while allowing participation in potential growth, up to a predefined cap.
This latest ETF joins the growing range of First Trust’s Target Outcome Investments®, with firmwide assets under management in Target Outcome strategies exceeding $25 billion as of end-September 2024.
The Fund is actively managed and seeks to provide returns that match the price return of the Nasdaq-100®, up to a predetermined upside cap, while providing a 15% downside cushion through a built-in buffer mechanism.
The outcome period runs for approximately one year, ending in December 2025, after which the cap and buffer are reset to prevailing market conditions.
QDEC has a perpetual structure and may be held indefinitely, providing a potential buy-and-hold investment opportunity.
The Fund is managed by First Trust Advisors L.P. and sub-advised by Vest Financial LLC, a pioneer of the buffer strategy and creator of the Target Outcome Investments® framework.
“We are excited to expand our range by bringing this innovative buffer strategy to European investors,” said Rupert Haddon, managing director at First Trust Global Portfolios. “QDEC represents the second ETF in our quarterly series of scheduled UCITS ETFs for our Nasdaq-100® Target Outcome suite. In today’s volatile market environment, we believe QDEC offers a compelling solution for investors seeking exposure to leading Nasdaq-100® companies while managing downside risk.”
Key Features of QDEC
• Market Participation with Reduced Volatility: QDEC provides capped upside potential along with a built-in contractual buffer against the first 15% of losses of the Nasdaq-100 Index.
• Smoother Returns: The Fund aims to reduce peaks and troughs for a more stable growth trajectory, potentially preserving more capital during market shocks. This buffer mechanism may be particularly beneficial given the index’s high exposure to ‘MAG 7’ stocks.
• Zero-Cost Buffer with Customised FLEX Options: QDEC uses FLexible EXchange Listed (“FLEX”) options, which are customised, exchange-traded contracts guaranteed for settlement by the Options Clearing Corporation.
• Flexibility and Transparency: Investors can buy or sell shares at any time with no early exit penalties. All option components are transparently displayed in the ETF holdings, available on our website.
• Lower Beta/Delta: The fund aims to have a lower beta/delta relative to the index, helping to cushion negative market movements.
