US-based asset management firm First Trust has launched a Ucits ETF on the London Stock Exchange, offering European investors access to US equity market growth with built-in downside protection.
The First Trust Vest U.S. Equity Buffer Ucits ETF – July (FJUL) is designed to track the price return of the S&P 500 Index, up to a predetermined cap, while providing a 10% buffer against losses over a defined outcome period.
The Undertakings for Collective Investment in Transferable Securities fund, or Ucits fund, is a type of mutual fund that complies with European Commission regulations for funds that are sold throughout European Union nations ( Investopedia).
The fund is the latest addition to First Trust’s expanding suite of Target Outcome ETFs ( actively managed ETFs offering targeted exposure to a reference asset, with features to reduce uncertainty and aim for predefined outcomes) in the Ucits format. These funds aim to offer a more predictable risk/return profile by combining equity exposure with embedded protective features. The outcome period for this fund runs until July 2026, after which both the cap and buffer are reset based on prevailing market conditions.
Investors embrace active management amid geopolitical volatility: Schroders
The fund’s perpetual structure enables it to be held indefinitely, providing a potential buy-and-hold investment opportunity, shared the asset manager.
The buffer aims to smooth out market volatility, offering more stable returns—particularly useful given the S&P 500’s heavy exposure to the ‘Magnificent 7’ technology stocks.
The fund will also be available for trading on the Deutsche Börse Xetra from 22nd July. It is actively managed by First Trust Advisors L.P. and sub-advised by Vest Financial LLC.
“We are excited to launch another innovative buffer strategy for European investors,” said Rupert Haddon, managing director at First Trust Global Portfolios, an arm of First Trust. “FJUL is the third ETF in our series of scheduled UCITS ETFs for our S&P 500® Target Outcome 10% buffer suite. In today’s volatile market, innovation is essential, especially for investors aiming for targeted outcomes amid uncertainty. FJUL offers a compelling solution by providing exposure to leading S&P 500® companies while helping to manage downside risk.”
