FAPR vs XTR

FAPRCFT Vest U.S. Equity Buffer ETF - April

XTRCGlobal X S&P 500 Tail Risk ETF

In short

FAPR One of twelve First Trust buffer funds, each keyed to a different start month. The April vintage uses SPY options to absorb the first 10% of a decline over its one-year outcome period, trading that cushion for a ceiling on gains that resets every April.

XTR Most downside-protection ETFs sell away your upside to pay for it. XTR pays cash instead: it owns the S&P 500 stocks and buys 10% out-of-the-money puts every quarter, leaving the upside uncapped.

Stated mandate

FAPR The Fund seeks to track the price return of the State Street® SPDR® S&P 500® ETF Trust, subject to a 15.16% upside cap and protection against the first 10% of losses during the current outcome period.

XTR The Fund seeks to track the performance of the Cboe S&P 500 Tail Risk Index before fees and expenses.

Why people hold it

• FAPR The bargain is explicit: FLEX options on SPY absorb the first 10% of a drop over the outcome period, in exchange for a cap on the upside.ftportfolios.com
• Perpetual structure. At each period's end the cap resets to prevailing market conditions and the fund rolls on, so there is no maturity date to manage.businesswire.com
• Part of a twelve-fund monthly ladder (FJAN through FDEC), so an outcome period can be started in any month rather than only in April.
• Sizable for a buffer fund, trading regularly, with a live record back to its 2021 launch and several completed outcome periods behind it.

• XTR No cap on the gains. The hedge is bought with cash rather than funded by selling calls, so index rallies come through less the put premium and fees.sec.gov
• Costs 0.25%, well under half of what the defined-outcome funds it competes with typically charge for downside protection.
• Owns the roughly 500 S&P 500 stocks themselves, with the put position layered on top, rather than wrapping the index in a stack of options.sec.gov
• Rules-based and mechanical: puts are bought at 10% below the prevailing index level each quarter and held to expiration, with no manager guessing at timing.sec.gov

Worth knowing

• FAPR At 0.85% a year it runs above the typical fund in its buffer peer group, and some alternatives such as BUFB charge a small fraction of that.
• The 10% buffer is measured before fees and only across the full period. Buying mid-period means whatever cushion and upside remain, not the headline terms.businesswire.com
• It targets SPY's price return through options, so S&P 500 dividends do not pass through and the fund has not been making distributions.ftportfolios.com

• XTR Protection starts about 10% down and resets quarterly, so garden-variety dips are absorbed in full and the gap widens if the market rallies mid-quarter.sec.gov
• Insurance is not free. The quarterly premium is a steady cost against plain index exposure, and in calm markets the puts expire worthless.sec.gov
• A small fund that trades thinly, so limit orders matter and subscale products carry more risk of being closed than the category's giants.

Full FAPR profile⁠

Full XTR profile⁠