New First Trust Buffer ETF Lists on London Stock Exchange, Offering Capped S&P 500 Exposure with Downside Protection

A new exchange-traded fund designed to provide US equity exposure with defined downside protection is now available to investors on the London Stock Exchange. The First Trust Vest US Equity Max Buffer UCITS ETF – December was listed on 22 December 2025.

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By ETFWorld.co.uk

Rupert Haddon Managing Director at First Trust Global Portfolios

The actively managed fund seeks to track the price return of the S&P 500 Index up to a predetermined cap, while buffering against a portion of index losses over a one-year outcome period.

Key Fund Features & Current Outcome Period

The fund’s objective is achieved through a structured options strategy.

Mechanism: FLEX Options on the S&P 500

The fund does not directly hold the stocks in the S&P 500. Instead, under normal market conditions, it invests substantially all of its assets in Flexible Exchange® Options (FLEX Options) that reference the price performance of the SPDR® S&P 500® ETF Trust (SPY). These are customized, exchange-listed option contracts. The fund’s portfolio typically holds just four of these option positions to create the buffer and cap profile.

Part of a Broader Series

The December-dated ETF is not a standalone product. It is part of a suite of “Target Outcome Strategies®” from First Trust and sub-advisor Vest Financial. Similar funds with outcome periods beginning in June and September 2025 are also listed. Each series has a different upside cap and buffer level, determined by market conditions at the time its options were purchased. For example, the June 2025 series (JUNM) has a higher buffer of 66.53% but the same 7.00% gross cap.

Costs and Market Listings

The fund’s total expense ratio (TER) is 0.85% per annum. This cost is materially higher than a passive S&P 500 tracker ETF and is a key factor reducing the net cap and buffer for investors.

Conclusion

The First Trust Vest US Equity Max Buffer ETF – December offers a defined risk/return profile for investors seeking S&P 500 exposure with a layer of protection against moderate declines. The trade-off for this buffer is a capped upside and a management fee that erodes the net potential gain. This type of fund may suit a risk-averse investor with a one-year horizon who is willing to forgo unlimited market upside in exchange for defined downside protection.

Source: ETFWorld