BUFR Holders Left $62,250 on the Table on a $300,000 Position While Chasing Calm
Retirees who picked a buffer ETF to sleep soundly through market chaos got exactly the protection they paid for, and that calm carried a hidden price tag almost no one ever calculates.
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Buffer ETFs make retirees a simple promise: when the market breaks, you fall less. The FT Vest Laddered Buffer ETF (CBOE:BUFR) kept that promise. Its worst peak-to-trough decline over October 22, 2021 to October 23, 2026 was -8.76%. At its worst, the Vanguard S&P 500 ETF (NYSEARCA:VOO) fell -11.98%. Both drops happened during the same period: April 2 to April 8, 2025.
Here is what that cost. A $300,000 position in BUFR over that same window grew to $477,300. In VOO, that money grew to $539,550. One account carried a $62,250 gap, and no statement ever showed it. If you bought BUFR for peace of mind, that gap is what the calm cost you. Almost nobody adds it up.
BUFR’s Protection Was Real and Measurable
Over the same window, BUFR’s daily standard deviation (how much returns swing each day) was 0.659%. VOO’s was 1.064%. Both figures are daily and unannualized, and the lower one goes to BUFR.
The two funds’ daily returns had a correlation of 0.97. On a scale where 1.0 means the two move in perfect lockstep, that means BUFR tracks the S&P 500 fund very closely. It just does so in smaller steps. The fund does what its label says.
Its structure explains the smoother ride. As of August 31, 2026, BUFR held twelve monthly First Trust buffer ETFs, each at about 8% of net assets. Each fund resets in a different month. The ladder spreads out the timing risk of any single start date.
What the Calm Cost in Dollars
BUFR returned 59.1% over the five years. VOO returned 79.85%. Both returns are dividend-adjusted, so VOO’s figure includes every dividend VOO paid along the way.
BUFR trailed over shorter periods as well. Over the year ending October 23, 2026, BUFR returned 11.57% against VOO’s 14.45%.
Where BUFR’s Gap Comes From
As we explained in our breakdown of how buffer ETFs work, these funds use options on an S&P 500 reference fund. They track the index’s price return. Price return leaves out dividends, so S&P 500 dividends never reach holders. The upside is limited, too. The fund gives up gains above a set level to pay for the protection below.
To put dividends in dollars, a $300,000 position in the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) would pay $2,983 a year at its forward distribution rate and its October 23, 2026 share price. That comes to a 0.99% yield. A price-return structure leaves that income out by design.
A Cheaper Mirror Sits in Plain Sight
VOO provides S&P 500 exposure with full dividends and no ceiling. Its expense ratio is 0.03%, and its June 30, 2026 semi-annual report put six months of costs on a $10,000 investment at roughly $2. VOO pays those dividends quarterly, with a trailing 12-month total of $7.4282 per share. In exchange, you take every drop in full, including the -11.98% slide in April 2025.
When Paying for the Buffer Makes Sense
A buffer looks most expensive during a five-year period with a strong S&P 500, and this window had one. The -8.76% figure also includes one sharp shock, the single worst decline in the window. A longer bear market would test BUFR differently.
If you would have sold VOO near the April 2025 bottom, BUFR bought you something real, since selling at the low locks in the loss and often misses the recovery. Our look at what a minimum volatility fund’s protection costs against VOO found the same tension between comfort and compounding.
Who BUFR Actually Suits
BUFR fits one investor: a retiree or near-retiree whose own history shows they sell when markets fall hard. For that person, a $62,250 shortfall in returns may cost less than the damage from one panic sale at the bottom. The first few years of withdrawals set the tone for a whole retirement plan. That’s why we built a free guide on managing them here. For anyone who held through past selloffs, this window shows the comfort came at a steep price.
Judge the protection against your own record. Pull your account history from April 2025. If you held through it and changed nothing, you paid for protection you didn’t need. If you sold, compare the buffer’s cost with what that sale cost you. Then ask whether $62,250 is a fair price for staying invested.
Contact [email protected] for any questions or corrections.
Ryne Mauck is an investment writer covering exchange-traded funds, retirement planning, and portfolio strategy. Through his work at 24/7 Wall St. and other investment platforms, including Seeking Alpha, he aims to provide clear, research-driven insights that help investors make more informed decisions while maintaining a long-term approach to investing.
Ryne holds a B.Sc. in Finance and an M.A. in Political Science. He is a formerly registered Municipal Advisor Representative and has passed the Series 50, Series 63, and Series 65 exams. His articles are not intended to be, nor should they be interpreted as, financial advice.
