FT Vest U.S. Equity Moderate Buffer ETF - May (GMAY)

GMAY is a sister fund to GMAR, operating under the same buffer-ETF model but resetting each May rather than March. The Financial Trends Advisors fund holds a diversified portfolio of U.S. large-cap stocks aligned with the S&P 500 and wraps that exposure in an option strategy designed to absorb the first 15 percent of annual losses. In return, any gains beyond a capped level flow back to the fund sponsor. The May reset establishes a new annual contract with new protection and gain limits.

The option structure beneath the surface

Buffer ETFs are synthetic constructs. They do not simply hold stocks and hope for the best. Instead, a buffer fund holds the underlying equities and simultaneously buys protective put options and sells covered call options. A put option gives GMAY the right to sell the stock at a predetermined price if it drops below that level — the protection floor. A call option, sold by the fund, gives away the right to the portfolio above a certain gain threshold — the cap. The net cost of buying puts is funded by selling calls: the fund receives a premium from investors willing to own the upside above the cap, and that premium pays for the downside protection bought for everyone.

This arrangement is renewed each May. On that reset date, the fund unwinds the prior year’s option positions and establishes new ones for the coming 12 months. The new cap and buffer reflect current option prices and implied volatility in the derivatives market. A calm market with low volatility may allow tighter caps (higher upside potential). A volatile or uncertain market may force wider caps (less upside available).

Comparing May and March resets

GMAY and GMAR are operationally identical except for their reset schedules. Choosing between them is often a matter of personal preference — when do you want to recalibrate your protection? Some investors prefer to align their buffer reset with their own portfolio-review cycles. Others use both to create a ladder of overlapping protection windows. The key difference is timing: GMAY’s protections are set once a year in May, while GMAR’s are set in March. If May is your preferred month to assess holdings, GMAY’s transparency and reset alignment may feel more natural.

Performance in different market regimes

The buffer strategy shines during corrections. In a 20 percent pullback, GMAY’s holder loses 5 percent (the excess above the 15 percent buffer). A traditional S&P 500 investor loses 20 percent. That gap is meaningful for peace of mind and for cash-constrained retirees. But in a sustained 35 percent bull run, a traditional investor gains 35 percent while GMAY’s holder gains only the cap — say, 18 percent. Over very long periods, the advantage or disadvantage depends on the frequency and severity of downturns relative to upside run-ups. Calm decades favor traditional indexing; volatile decades favor the buffer.

Costs, liquidity, and research

GMAY trades on the NASDAQ with moderate daily volume. The bid-ask spread is typically 0.05 percent to 0.10 percent — narrower than many structured products but wider than mega-cap index ETFs. The expense ratio, around 0.70 to 0.85 percent annually, covers the cost of the underlying stock holdings, the ongoing purchase and sale of options, and fund administration. That cost is roughly ten times the expense ratio of a plain S&P 500 index fund, a trade-off for the structural downside protection.

Research GMAY by reading the current prospectus (especially the annual reset documentation released each May), monitoring the fund’s fact sheet, and observing its performance relative to the S&P 500 through market cycles. Track the actual buffer and cap in effect for the current period — these are public and typically updated on the fund website. If downside protection matters more to you than maximizing gains, compare GMAY’s real-world performance to both the S&P 500 and competing buffer funds from other sponsors.