Evidence-based investing research
Value Investing Strategy (Strategy Overview)
Allocations for November 2026 (Final)
Cash TLT LQD SPY
Momentum Investing Strategy (Strategy Overview)
Allocations for November 2026 (Final)
1st ETF 2nd ETF 3rd ETF

How Are Laddered Buffer ETFs Doing?

Steve LeCompte | | Posted in: Equity Options, Equity Premium

Guide Options and Leveraged ETFs Other option research

Key Insight

Five laddered buffer ETFs had lower CAGRs than SPY or QQQ (equal-weighted average 9.9% vs 14.4%) but shallower monthly MaxDDs (-12% vs -24%) (sample periods differ by fund; monthly total returns through Feb 2026).

A buffer exchange-traded fund (ETF) is designed to limit losses while capping gains over a specific period, usually one year, generally by combining a position in put and call options on a stock index with an ETF that tracks that index. Laddered buffer ETFs smooth this approach by holding a rolling series of buffer ETFs with staggered expiration dates, thereby imposing two layers of fund costs. How do laddered buffer ETFs perform? To investigate, we consider five of the largest such ETFs, all currently available, as follows:

We use SPDR S&P 500 ETF Trust (SPY) as the benchmark for the first four and Invesco QQQ Trust (QQQ) for the last. We focus on monthly return statistics, along with compound annual growth rates (CAGR) and maximum drawdowns (MaxDD). Using monthly total returns for the five laddered buffer ETFs, SPY and QQQ as available through February 2026, we find that:

Subscribe to Keep Reading

Get the research edge serious investors rely on.

  • 1,200+ research articles
  • Monthly strategy signals
  • 20+ years of backtested analysis
$17.99 /month

Cancel anytime

Options and Leveraged ETFs guide

More on other option research

  • Historical U.S. Equity Returns for a 5-Year Horizon Premium Rolling 5-year nominal returns were negative about 22% of the time for both Shiller's S&P Composite Index (total return, 1871–2025; 149 overlapping intervals) and…
  • Half-day Momentum and Reversal in Stock Options Premium U.S. stock option returns show half-day momentum at even lags and reversal at odd lags, with daily long-short deciles earning 0.22% (intraday) and 0.45%…
  • Signals from Trading Volumes of Informed Traders Premium The INFO factor (long top/short bottom decile of equal-weighted stocks ranked monthly on insider net purchases, short interest, and option/stock volume) returned 1.12% gross…
  • Equity Options Trading Frictions Premium Identical market orders placed across six brokers averaged 3.9% round-trip frictions relative to position size, ranging from about 0% (Vanguard) to 7% (Robinhood) and…
  • Returns and Volatilities of ETF Option Strategies Premium Covered calls on equity and bond ETFs tended to lower volatility and return versus buy-and-hold, while protective puts consistently raised volatility, usually with lower…

All 195 articles in the Options and Leveraged ETFs guide