Global X ETFs has announced the launch of two new ETFs in Europe: the Global X Annual Buffer Ucits ETF (SPAB) and the Global X Annual Tail Hedge Ucits ETF (SPAH).
The ETFs are designed to provide investors with downside protection against sharp equity downturns while maintaining some upside participation.
The SPAB ETF provides investors with 0% to -15% (15%) buffer protection, while the SPAH ETF provides -5% to -35% (30%) buffer protection. This means that investors in these ETFs will lose no more than the specified percentage of their investment, even if the S&P 500 index declines by more than that percentage, said Global X ETFs.
The launch of these ETFs comes at a time when investors are increasingly concerned about the potential for a recession.
The US Federal Reserve is raising interest rates aggressively in an effort to combat inflation, and this could lead to a slowdown in economic growth.
GlobalX ETFS said that the ETFs provide investors a way to stay invested in the stock market while protecting themselves against the downside risk of a recession.
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