ETFs
All about buffer ETFs – ETF Express
In January this year, Statista, a global data and business intelligence platform, reported that there are now more than 8,000 ETFs worldwide – and that the number of ETFs has increased by 3,000% since 2003.
Advisor, Stuart Chaussée recently studied one type in particular: the buffer ETF. In short, these ETFs, also called outcome or target ETFs, limit losses and cap upside.
Buffer ETFs had piqued his interest for a while: “I had been following them since 2020,” explains Chaussée. He then decided to explore them in more depth, which resulted in his latest book: Investor’s Guide to Buffer ETFs: Upside growth potential with downside protection:
“Despite being an asset class that has attracted over $35 billion (as of February 29, 2024), there was a lack of information available on buffer ETFs. I wanted to learn more on my own, but also help advisors and investors learn more about these products.
The free e-book, published in May, is Chaussée’s sixth, following Advanced Portfolio Management; Stocks, Bonds and the Greenspan Model; Dividend investing for income and growth; Advanced Portfolio Management: Strategies for the Rich; and Understanding risk, investor behavior and surviving bubbles.
Chaussée, who holds a BA from the University of California and a master’s degree from the Thunderbird School of Global Management, began his career as an advisor in 1986 at Prudential-Bache Securities in Brussels. He continued to work in Europe, for Merrill Lynch, in Luxembourg and Belgium, before returning to the United States in 1996.
In 1997, he founded his company, Stuart Chaussée and Associates, based in Palos Verdes, California. To date, assets under management total approximately $380 million:
“It’s the only job I’ve ever done,” he confirms, reflecting on his 38-year career in financial consulting. He keeps the business in the family, having recently hired his youngest son. Henry Chaussée holds a master’s degree in financial planning, passed his CFP certification exam in 2023, and participates in all aspects of investment management and financial planning at the firm.
“Most of my clients are nearing retirement or are already retired and want to avoid the effects of sharp declines in their portfolio. The main appeal of buffer ETFs is that they significantly reduce the likelihood of losing a lot of money.
“They have a defined outcome when you buy them, unlike almost any other investment, at least stock-related, that you can buy. With these, you don’t know how they will perform or how much money you might lose. But with buffered ETFs, you know the pros and cons, and generally the risk/reward parameters are pretty attractive.
Chaussée isn’t considering other books at the moment, but he doesn’t rule out the possibility of writing more in the future: “Maybe there will be a follow-up to this one, if ETFs tampons are gaining ground. ” he said, adding: “I am confident that this will be the case, as more and more investors discover more about it and discover its benefits.