Content and data provided by various third parties and Fidelity − Terms of Use | Help/Glossary
Research > ETFs > ETF / ETP Commentary > 

Clients, Advisors See Different Needs on Wealth Protection: Buffer ETFs Help

BY | ETF Database
10:27 am ET 11/09/26 | 14 VIEWS
Last week saw markets take a notable dive amid growing AI stocks-related concerns. With notable uncertainty on the horizon in both tech and geopolitics, thankfully, the ever-expanding ETF ecosystem offers a wide variety of products and tools that can help deliver wealth protection. Innovator ETFs, recently acquired by Goldman Sachs, offers buffer ETFs, for example, recently explored on a webcast with VettaFi Director of Research Cinthia Murphy.Key Takeaways: ETFs have exploded in popularity with new options launched almost every day. Buffer ETFs are one important segment, limiting downside amid rising volatility. Innovator ETFs’ suite includes funds like BALT, which recently crossed $3 billion in AUM. The webcast, titled “Is Your Clients’ Portfolio Built for Today’s Markets?” included insight from Innovator ETFs Director of Product Strategy Andrew Nelson. Nelson, who joined the firm in May 2024, spoke to the how and what of using buffer ETFs for wealth protection. He pointed to last week’s more than 4% drop-off in the S&P 500 as notable. Data, he said, showed that fall-off was one of the largest since World War II. That comes as data shows a notable gap between advisors and investors on whether their portfolios are sufficiently protected, he said. “There’s this communication disconnect. Folks want it, FAs think they’re giving it, folks don’t feel like they’re getting it,” Nelson said, describing the amount of wealth protection in a portfolio. He noted just 8% of clients feel like they have sufficient protection. That’s where the firm’s suite comes in. The shop’s buffer ETFs, Nelson said, move in the direction markets move, but in a “muted fashion.” “So intra those time frames, you will have market movements, but they’re just more muted,” he explained. “So to tell a client yesterday, “Hey, market fell 4.5%, you’re only down about less than 1%; we’re in a great spot. You still get upside participation. We have a plan for this.” “It’s things like that that make the practice of an FA that much stronger,” he added.The Role Buffer ETFs Can PlaySo, how do buffer ETFs work, and how have they performed in these recent cases? Buffer ETFs offer upside to a particular cap and downside protection to a particular buffer. Buffer ETFs reset over certain calendar periods. The firm’s largest ETF, the Innovator Defined Wealth Shield ETF (BALT B), has more than $3 billion in AUM. BALT charges a 69 basis point fee to protect against the first 20% of decline. The ETF resets its buffer and caps upside every three months, also holding FLEX options as indeed. See more: Buffer ETF BALT Hits $3 Billion Milestone as Costs Rise While it doesn’t provide income, the fund does have some benefit therein. Per Nelson, that means it induces fewer taxable events — making BALT a flexible tool to help plan a portfolio’s tax landscape. During the more-than-4% drop on Thursday last week, BALT was down just 1%. The fund, Nelson said, is the “industry’s purest defined outcome ETF.” It has performed well and outperformed its ETF Database Category over the last five years while providing that downside protection. All together, buffer ETFs like BALT can provide the wealth protection clients want to have and advisors want to deliver. For more news, information, and strategy, visit the Future ETFs Content Hub.

More Commentary

The Power of 11: How EQL Neutralizes Single-Sector Dependency
BY | ETF Database
10:31 am ET 11/09/26 | 24 VIEWS
Revisiting the Retirement Blueprint: Goldman Sachs GPIX & GPIQ
BY | ETF Database
4:19 am ET 11/09/26 | 46 VIEWS
New Bitcoin Book Weighs Both Sides of the Coin
BY | ETF Database
3:54 am ET 11/09/26 | 26 VIEWS
View more Commentary

Search Commentary

Enter Keyword(s)
Filter Results

Performance data shown is past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Yield and return will vary, therefore you have a gain or loss when you sell your shares. For standard quarterly performance, go to the fund's Snapshot page by clicking on the ETF/ETP's symbol.

ETFs may trade at a premium or discount to their NAV and are subject to the market fluctuations of their underlying investments.

For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain FBS platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF's prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice. BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates.

FBS receives compensation from the fund's advisor or its affiliates in connection with a marketing program that includes the promotion of this security and other ETFs to customers ("Marketing Program"). The Marketing Program creates incentives for FBS to encourage the purchase of certain ETFs. Additional information about the sources, amounts, and terms of compensation is in the ETF's prospectus and related documents. Please note that this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral.

News, commentary (including "Related Symbols") and events are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.

Any data, charts and other information provided on this page are intended to help self-directed investors evaluate exchange traded products (ETPs), including, but limited to exchange traded funds (ETFs) and exchange traded notes (ETNs). Criteria and inputs entered, including the choice to make ETP comparisons, are at the sole discretion of the user and are solely for the convenience of the user. Analyst opinions, ratings and reports are provided by third-parties unaffiliated with Fidelity. All information supplied or obtained from this page is for informational purposes only and should not be considered investment advice or guidance, an offer of or a solicitation of an offer to buy or sell a particular security, or a recommendation or endorsement by Fidelity of any security or investment strategy. Fidelity does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating ETPs. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use. Determine which securities are right for you based on your investment objectives, risk tolerance, financial situation and other individual factors and re-evaluate them on a periodic basis.

Before investing in any exchange traded product, you should consider its investment objective, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.