MNVR provides downside protection for equity exposure while maintaining upside participation through a structured outcome strategy that resets each November. The fund targets moderate risk reduction, typically capping losses at around 15% in exchange for limiting gains to approximately 10-12% over each annual outcome period.
How It Works
The fund uses a combination of S&P 500 exposure through FLEX options to create a defined outcome profile that resets annually in November. It sells upside call options to finance the purchase of downside put options, creating a buffer against the first 15% of losses while capping gains at a predetermined level. The exact cap and buffer levels are set at each November reset based on prevailing market conditions and option pricing.
Key Features
- Built-in 15% downside buffer refreshes each November, providing predictable loss protection
- Upside participation to a cap level (typically 10-12%) offers meaningful return potential
- No credit risk unlike structured notes - uses exchange-traded options on SPY
Risks
- Losses beyond 15% are unprotected - a 30% market drop means you lose 15%
- Cap levels fluctuate with volatility - high VIX at reset means lower potential returns
- Mid-period entries face asymmetric outcomes - less buffer remaining but full cap exposure
Who Should Own This
Best suited for retirees or conservative investors who want equity exposure but can't stomach a 20%+ drawdown. Works well as a core holding for those willing to give up some upside for sleeping better at night. Investors should ideally buy at the November reset and hold the full year to maximize the strategy's benefits.