Morningstar’s Primer on Defined Outcome ETFs
With recent market volatility and recession fears, investors have sought out strategies that manage risk. Defined outcome ETFs captured their attention. In five years, assets in the space have grown from approximately $183 million to $22 billion today.
But downside protection comes at a cost. During periods when stocks rise, investors miss out on a portion of returns. Expenses and fees also eat into their profits.
In this primer, we break down how defined outcome funds work and how investors can use them. With leading research, wealth managers can help their clients make more informed decisions about a burgeoning product.
- A deep dive into defined outcome ETFs and how they protect investors from losses.
- A review of the performance and possible drawbacks of defined outcome ETFs.
- Important factors to consider for defined outcome investing.