DDTF provides 10% downside protection against S&P 500 losses while capturing upside gains up to a predetermined cap, resetting annually each February. This dual-directional approach lets investors stay invested with reduced anxiety about market drops.
How It Works
The fund uses a FLEX options package on the S&P 500 to create its outcome profile — buying puts for downside protection and selling calls to fund that protection. The 10% buffer absorbs the first 10% of losses from the February starting point, while upside is capped (typically 15-20% annually). Options reset each February, creating a new outcome period with fresh buffer and cap levels.
Key Features
- 10% buffer absorbs initial market losses before you feel any pain
- Known outcome range at purchase — you know maximum gain and where losses start
- February annual reset provides predictable entry points for outcome period
Risks
- Losses beyond 10% hit dollar-for-dollar — a 25% drop means you lose 15%
- Missing gains above the cap in strong markets could mean significant underperformance
- Buying mid-period means inheriting partially depleted buffer and lower remaining cap
Who Should Own This
Perfect for pre-retirees or conservative investors who want equity exposure but lose sleep over 2008-style crashes. Works best as a core holding bought at period start (February) and held the full year. Those needing liquidity or wanting to time markets should look elsewhere — the defined outcomes only work if you match the holding period.