FT US EQTY BUF - JAN

Issuer: First Trust

Asset Class: Equity

TER: 89bps

Trading Currency: USD

Pays Income: False

Listing Date: 22 Jan 2025

Ticker: FJAN

ISIN: IE000MDKBOB3

This fund offers a defined outcome strategy focused on the US large-cap equity market. It aims to provide investors with returns that correspond to the price appreciation of an underlying S&P 500-tracking investment, up to a predetermined upside cap. Simultaneously, it is engineered to shield investors from the first 10% of losses in the reference asset over a specified one-year outcome period. This structure is intended for individuals who desire participation in equity market growth but also seek a built-in mechanism for downside protection against moderate market declines.

The investment objective is pursued through a portfolio composed primarily of FLexible EXchange Options (“FLEX Options”). This options-based approach establishes a predefined spectrum of potential investment outcomes. The specific upside cap and the 10% buffer are determined at the start of each outcome period, which resets annually in January. This methodology provides a transparent risk-reward framework for those who commit to holding the investment for the entire twelve-month cycle, allowing for a more predictable performance profile within the defined boundaries.

This product is tailored for investors with a moderate risk tolerance who are cautious about market volatility but wish to maintain exposure to the growth potential of US equities. In exchange for forgoing gains that exceed the specified cap, investors benefit from a protective buffer against initial losses. This strategy can be an effective tool for managing portfolio volatility and achieving more consistent returns, particularly in fluctuating or sideways market environments. It is important to note, however, that investors will not benefit from market appreciation beyond the cap and remain exposed to any losses that surpass the 10% buffer.