TrueShares Structured Outcome (May) ETF (MAYZ) seeks to provide defined outcome exposure over a specific outcome period ending in May, typically tracking equity market performance while providing downside protection and upside participation limits. This structured outcome strategy aims to deliver buffered losses and capped gains based on underlying market movements.
How It Works
MAYZ uses a structured outcome approach employing FLEX options on equity indices to create defined risk-return profiles over annual outcome periods. The fund purchases and sells options contracts to establish downside buffers (typically 10-15%) while capping upside participation at predetermined levels. Holdings consist primarily of FLEX options positions that reset annually in May, with the fund's performance directly tied to the underlying reference asset's movement within the buffer and cap parameters.
Key Features
- Provides downside buffer protection against first 10-15% of losses while maintaining equity market exposure
- Annual outcome periods reset each May, allowing investors to enter at known risk-return parameters
- Zero expense ratio structure makes it cost-competitive versus traditional structured products and buffer ETFs
Risks
- This ETF can lose value beyond the buffer if underlying markets decline more than 10-15%, with losses accelerating rapidly thereafter
- Upside participation is capped at predetermined levels, potentially missing significant market gains during strong bull markets
- Options-based strategy creates complexity risk where FLEX options may not perform as expected during extreme market conditions
Who Should Own This
Best suited for tactical allocation (5-15% of portfolio) by conservative investors with 1-year time horizons seeking defined risk-return outcomes. Low-to-medium risk tolerance required given buffer limitations. Ideal for investors wanting equity exposure with downside protection who can accept capped upside in exchange for loss mitigation.