Research/Research note · Unwrapped 03
Buffer ETFs: stocks, with a cushion.
Buffer ETFs sell a simple trade: give up some of the rise to soften the fall. 546 now trade in the US, and most of them listed in 2024 or later. Here is how the terms work, what happened in April 2025, and what to check before buying one mid-period.
Buffer ETFs, in brief
- A buffer ETF absorbs the first part of a fall, often 10% or 15%, over a set period, usually a year.
- In return, it caps the gain. Both terms are set before the period starts.
- The terms hold in full only at the end of the period. Mid-period the cushion is partial: in April 2025 a 15% buffer ETF fell 8% while the S&P 500 fell 15%.
- Buy mid-period and the cap and buffer left to you have moved. Issuers publish them daily.
- Most track an index's price alone, so its dividends are given up too.
Why advisors use them
The three primary use cases:
- Moving cash into stocks without taking the full fall
- Easing cautious clients into stocks
- Sitting alongside bonds
How the terms work
Move the index. See what you get.
Illustrative terms: a 10% buffer and a 15% cap, held to the end of the period, before fees.
If the index falls 16%, the first 10% is absorbed and you fall 6%. Past the buffer, you fall with the index. If the index rises 24%, you stop at the 15% cap and give up 9 points.
April 2025
The S&P 500 fell 15% by its April low. A 15% buffer ETF fell 8%.
PJAN, a 15% buffer ETF on the S&P 500, against SPY, price only, rebased to 100 over PJAN's 2025 outcome period (December 31, 2024 to December 31, 2025). Hover for the date and both values.
Mid-period the cushion is partial. At the April low the index was down 15.3%, just past PJAN's 15% buffer, so at the end of the period the fund would have been down only about 0.3%, before fees. Yet PJAN was down 8.4%: before the period ends, the options inside the fund are valued at market prices, and the terms apply in full only at the end. Over the whole year the index rose 16.4% and PJAN 11.3%; the cap, along with fees, trimmed the gain.
Bought mid-period
The terms reset each period. Buy in between and three numbers have moved. Each issuer publishes them daily.
| Cap left | How much rise is left before gains stop |
| Buffer left | How much of a fall is still absorbed |
| Days left | When the terms reset |
| Or a ladder | Funds that hold a run of buffer ETFs with different start dates, so no single reset date applies |
Listings since 2024
Buffer ETF listings have taken off since 2024.
The 546, by the year each first traded; 2026 to October 17. Hover a column for the count.
355 of the 546, nearly two in three, first traded in 2024 or later. These are ETFs still trading today: funds that have closed are not in the set, so earlier years are understated.
What they are written on
Mostly US large caps. Not all stocks.
What each of the 546 holds options on, read from its latest holdings report.
352 of the 546 are written on US large caps. At least ten are written on bitcoin, Treasury bonds or gold. 58, mostly new, have no holdings report on file yet.
Bottom line
A buffer ETF trades some of the rise for a softer fall, on terms set for one period. Those terms hold in full only at the end of the period; in between, what is left of them changes every day. The label names the index, but what you get depends on where the period stands on the day you buy. Three numbers show it: cap left, buffer left and days left, which each issuer publishes daily.
Do you know today's cap and buffer?
Notes and methods
The set is every US ETF in our system classed as a buffer, unlevered: 546 ETFs from 22 issuers, $100.3bn as listed, or about $80bn ($80.4bn) counting the 28 ladders once, since a ladder holds other buffer ETFs; accelerated-upside funds and collars are not included. Assets are as of October 17, 2026. Listings count the year each fund first traded, from our daily price data; funds that have closed are not counted, so earlier years are understated. The April 2025 chart shows PJAN, Innovator's 15% buffer ETF on the S&P 500, against SPY, price only, over its latest complete outcome period, December 31, 2024 to December 31, 2025. What each fund is written on comes from its latest holdings report. The payoff chart uses illustrative terms, not any fund's. Nothing here is a ranking, a recommendation or a forecast.