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ETF Prime: Buffer ETFs & the Case for Power Demand

BY | ETF Database
9:37 am ET 09/30/26 | 9 VIEWS
Active buffer ETFs and a first-of-its-kind electricity futures fund were the focus on this week’s ETF Prime. Host Nate Geraci welcomed Ben Sklar, portfolio manager on AllianceBernstein’s index and derivative solutions team. He was followed by Bill Perkins, founder and chief investment officer at Skylar Capital Management.Key Takeaways: AllianceBernstein’s buffer ETFs use three-month outcome periods with an active ratchet feature. BUFC’s 15% buffer has been breached in just 2% of quarters since the 1940s. MWHS is the first ETF offering direct exposure to U.S. electricity futures. Sklar is part of AllianceBernstein’s broader ETF business, which spans 23 actively managed ETFs and nearly $21 billion in combined assets across equities, fixed income, and alternative strategies. See more: AllianceBernstein Names Julie Gunts Head of ETFs as Active Demand Surges Unlike many buffer strategies that reset annually, AllianceBernstein’s funds use three-month outcome periods. Geraci introduced three specific funds central to the conversation: the AB Moderate Buffer ETF (BUFM ), the AB Conservative Buffer ETF (BUFC B-), and the AB International Buffer ETF (BUFI ). Those shorter periods pair with an active “ratchet” feature that resets the buffer and cap mid-period if markets rally sharply, Sklar said. That locks in gains while refreshing upside potential for the remainder of the cycle. BUFC pairs a 15% downside buffer with a 3% targeted upside in the S&P 500. That buffer size has been breached in only about 2% of three-month periods since the 1940s. Sklar described buffer ETFs as a “pre-commitment mechanism” that automatically executes the disciplined rebalancing behavior that most investors struggle to do on their own: buying their losers and selling their winners. Sklar also previewed the AB Equity Premium Income ETF (INK), launching in November. The fund pairs a direct indexing strategy with out-of-the-money call selling, targeting a 10% to 12% total annual distribution. He was clear that the fund is meant as an equity allocation, not a fixed income substitute.A First-of-Its-Kind Electricity Futures ETFPerkins also joined this week’s episode. He discussed the Skylar Electricity Futures ETF (MWHS), which launched in June as the first ETF offering direct exposure to U.S. electricity futures. It holds a rolling 12-month strip of contracts split evenly between the ERCOT and PJM power grids. Perkins said the fund settles into cash rather than rolling contracts forward. That structure avoids the contango drag that erodes returns in many commodity ETFs, letting the fund capture short-term price spikes instead of losing value to the roll. Perkins pointed to AI data centers, industrial reshoring, and humanoid robotics as catalysts for rising power demand. He called it a decade-long bull case that could last years. He estimated that 10 million humanoid robots alone would require 3 to 6 gigawatts of new capacity. Turbines are already sold out until 2031, Perkins said, meaning new power supply is likely to lag rising demand for years. That mismatch, he added, could keep electricity prices under structural upward pressure.Listen to the Entire Episode of ETF PrimeFor more ETF Prime podcast episodes, visit our ETF Prime Content Hub.

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