Worried About Market Volatility? Look To New S&P 500 Buffer Protection Fund

Interested in participating in the market but worried about wild swings in the market? A new mutual fund has launched that utilizes a buffer strategy that may be attractive for investors who want to buy, but are worried about market volatility or the uncertainty surrounding the upcoming election.

Just launched, the fund is called CBOE Vest S&P 500® Buffer Protect Strategy Fund Class Institutional Shares BUIGX, and it is known as a "protective" mutual fund, meaning it provides 10 percent built-in downside protection to investors in exchange for a 12 percent upside cap.

Strategy For Risk Management

Although buffer protection strategies have been recognized as useful risk-management tools in the past, the fund is the first index-based mutual fund to make such a strategy available, according to the fund's press release.

Related Link: Less Than 10% Of Actively Managed Equity Funds Managed To Beat The S&P 500

"This allows investors to stay invested in the broad equity markets during a market downturn, with a ‘safety net' for that first 10 percent of losses," said Steve Neamtz, senior managing director of CBOE Vest.

The fund is built to manage volatility for risk sensitive investors.

Why BUIGX?

"BUIGX is particularly well-suited to risk-averse investors who would like to be involved in the US equity markets, but are leery of sudden drawdowns or market downturns. With built-in buffered downside protection, BUIGX allows investors to remain in the markets and may protect against some initial loss.

"BUIGX provides investors both opportunities to participate in upward moves in the market while maintaining a level of downside protection. With these embedded fund features, investors may be able to avoid many of the pitfalls associated with market timing," concluded Neamtz.

At time of publication, BUIGX was down 0.4 percent on the day. Since launching on September 8 of this year, the fund is down 1.3 percent.

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