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Some investors have Marathon Man-level paranoia about the markets.
While most buffer ETFs on the market haven’t had an opportunity to prove themselves, as they often have one-year outcome periods and have operated in a bull market, investors like them anyway (Uncertainty is a powerful selling point.) There were about 150 defined-outcome products on the market at the end of 2022, during which time the S&P 500 slid 19%. Today, there are roughly three times as many, and money has consistently poured into the category.
“We, and the other issuers, are spending time educating advisors and investors about the qualities of these products. That’s resonating really well,” said Charles Champagne, head of ETF strategy at Allianz Investment Management. Last week, that firm launched eight new buffer funds, seven of which use quarterly outcome periods. “We’re seeing a lot of growth into this space, even when the markets are really high.”
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Buffer ETFs take some uncertainty out of investing, offering varying ranges of protection from losses, while usually capping the potential gains. The biggest buffer fund, the $2.2 billion Innovator Defined Wealth Shield ETF (BALT), was flat for the first three months of 2026, compared with a 4.6% decline on the SPDR S&P 500 ETF Trust (SPY), which is the fund it tracks. That fund has a three-month outcome period.
Some recent developments in the category:
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Goldman Sachs last week closed on its acquisition of Innovator, giving it the biggest footprint in defined-outcome ETFs by number of funds and potentially by assets. Innovator had slightly more assets under management in the category than First Trust as of the end of February, per data from Morningstar Direct.
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The Allianz funds launched April 1 include US equity, growth, small cap and international flavors, with downside protection ranging from 5% to 15% and one product with uncapped upside.
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Investors poured a net $1.4 billion into the products in the first two months of 2026 and $8.7 billion over 12 months, the Morningstar data show. Total assets were $66 billion at the end of February, up from $50 billion a year prior.
Drilling Down: The current environment — marked by worries about the war with Iran, stock market concentration risks and other concerns — is fueling recent demand for buffer ETFs, Champagne said. Investors have been layering some protection into their portfolios with the products, in some cases replacing a portion of their bond holdings. The new funds with shorter outcome periods were designed to meet demand, as investors can “lock in” the protected returns several times a year, he said. “You’re realizing those outcomes faster, and investors tend to like that.”
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