JULT provides one-year exposure to the S&P 500 with a built-in airbag — absorbing the first 10% of losses while capping gains around 15-20%. Each July, the fund resets with new options positions, establishing fresh protection and cap levels based on market conditions.
How It Works
The fund buys S&P 500 exposure through FLEX options, then layers on a put spread to create the 10% buffer and sells upside calls to fund the protection. This options package resets annually each July, with the exact cap determined by volatility and rates at reset. Between resets, the buffer and cap levels float with the market, meaning mid-period buyers get different protection than day-one investors.
Key Features
- First 10% of S&P 500 losses absorbed if held the full year from July reset
- Upside typically capped at 15-20% depending on market conditions at annual reset
- Options-based structure means no credit risk unlike structured notes
Risks
- Losses beyond 10% hit dollar-for-dollar — a 25% crash means you're down 15%
- Mid-period buyers face asymmetric risk with less buffer remaining but full cap
- Cap resets can lock in unfavorable terms during high volatility periods
Who Should Own This
Best for investors one year from a major liquidity need who want equity exposure but can't stomach normal volatility — think pre-retirees or those saving for a house down payment. Also works for advisors managing nervous clients who might otherwise panic-sell in a correction. The annual reset makes this a tactical tool, not a permanent allocation.