Reflecting on 2 Years of Uncapped Buffered ETFs

Equity investing can be an eventful ride.  Historically, a productive one, but eventful nonetheless!  Buy and hold, tactical, short-term or long-term, whatever the chosen philosophy, two themes typically remain a constant:  Uncertainty and Volatility.  Several years ago, when TrueShares and SpiderRock Advisors emerged from the laboratory with the blueprint for our defined outcome strategy, we did so with the goal of not only addressing both of these characteristics, but also preserving the basic impetus for equity investing in the first place, which is the growth potential.  Enter the TrueShares Structured Outcome ETF Series, unique amongst its peers as the only “buffered” ETFs with an uncapped upside participation.

It has been a little over 2 years since the launch of the first TrueShares Structured Outcome ETF. How effective has our approach been?  Have these ETFs been able to deliver the possibility of meaningful upside capture while also offering buffered downside risk?  Interestingly, with a sharp correction, followed by bull and bear markets consecutively, the past two years have given us a near-perfect environment to test the merits of the uncapped philosophy.  Let’s examine.

At the time of launch, we felt that the difference between capped and uncapped ETFs was crucial for investors as the standard capped ETFs would trail the market significantly when the markets moved up well above their cap, missing out on large chunks of the upside moves that are so crucial to long-term compounded returns. The markets immediately confirmed our suspicions when the S&P 500 moved up over 40% in the first year of operations (from 07/01/2022 to 07/01/2021, SPY was up 40.7%*). The July Uncapped ETF outperformed the equivalent capped product by almost 14% during that first period (from 07/01/2020 to 07/01/2021, JULZ was up 30.69% while its closest capped peer comparison BJUL was up 16.16%). 

In the following year, a bear market emerged from hibernation as we saw a significant pull back across equity indices.  In that environment, both capped and uncapped buffered ETFs delivered on their promise to mitigate an investor’s downside risk (from 07/01/2021 to 07/01/2022, SPY was down 10.17%, JULZ was down 3.84%, and BJUL was down 3.53%).

Now let’s combine the two years to paint a more complete picture from the perspective of a buy and hold investor:  For investors who chose the uncapped product, the outcome is once again decidedly better. Over two years of extreme market conditions, the TrueShares July Uncapped ETF returned +24.52% v. the S&P 500 return of 25.95%, with roughly a third less volatility (from 07/01/2020 to 07/01/2022). The uncapped buffered ETF delivered what is typically considered an excellent risk adjusted outcome for investors (from 07/01/2020 to 07/01/2022, JULZ Beta was 0.696). Conversely, the capped structure was never able to overcome the relative losses it experienced in the first year and only returned +11.71% from 07/01/2020 to 07/01/2022, a lackluster return in both absolute and risk adjusted measures.

This return analysis reinforces the idea that missing out on substantial upside potential in a capped product can be serious detriment to long-term compounded returns. Conversely, it supports our stance that an uncapped structured outcome approach offers investors the opportunity to meaningfully participate in the potentially significant upside moves of U.S. Large Cap equities while still mitigating downside risk.  In other words, there may be no “free lunch” in the equity hedging game, but certain investment scenarios certainly seem to offer a more interesting menu than others!

One remaining question to answer, were the equity market extremes seen in the past two years an anomaly? In short, the answer is no.  When examining historical returns for the S&P 500, one quickly realizes that large up moves in the market happen surprisingly often. In the 392 twelve-month periods that occurred from 1988-2021, over 50% of the time the S&P 500 was up 14% or better. Many investors will be even more surprised to learn that the S&P 500 is up 22% or better 25% of the time (it has happened 101 of the 401 twelve-month periods from 12/31/1987 to 06/30/2022). Large market moves to the upside feel special and rare, but they really are quite common. The uncapped structure is designed with that common history of large upside moves in mind. After all, equity returns are rarely linear, they’re lumpy.

The TrueShares Structured Outcome ETFs, much like the bulk of the buffered peer group, are portfolio construction tools and used in a variety of ways. Their versatility is reflected in the investment expectations and portfolio objectives unique to each investor. However, if those portfolio objectives include trying to harness the primary reason for equity investing, which is growth, while simultaneously lowering risk, then we look forward to a much needed conversation.

Learn more about TrueShares Structured Outcome ETFs at

All funds are managed differently and do not react the same to economic or market events. The investment objectives, strategies, policies or restrictions of other funds may differ and more information can be found in their respective prospectuses. Therefore, we generally do not believe it is possible to make direct fund to fund comparisons in an effort to highlight the benefits of a fund versus another similarly managed fund. Please reference below for comparison disclosures. Performance is historical and does not guarantee future results. Current performance may be lower or higher than quoted. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance data for the most recent month-end is available at,,, and All funds are managed differently and do not react the same to economic or market events. The investment objectives, strategies, policies or restrictions of other funds may differ and more information can be found in their respective prospectuses. Therefore, we generally do not believe it is possible to make direct fund to fund comparisons in an effort to highlight the benefits of a fund versus another similarly managed fund.


Upside participation over an investment period is subject to options pricing. Due to the cost of the options used by the fund, the correlation of the fund’s performance to that of the S&P 500 Price Index will be less than if the fund invested directly in the S&P 500 Price Index without using options, and could be substantially less. While upside participation is uncapped (no absolute upper limit), an investor in the TrueShares Structured Outcome ETFs should expect to experience a rate of market return less than 100% of actual broad market results. Each Fund’s current expected participation rate can be found at

The TrueShares Structured Outcome ETFS  have characteristics unlike many other traditional investment products and may not be suitable for all investors. You should only consider an investment in the Fund if you fully understand the inherent risks, which can be found in the prospectus.

TrueShares Structured Outcome ETFS are designed to seek to achieve the investment strategy for investments made on the Initial Investment Day and held until the last day of the Investment Period. Investors purchasing shares in the fund after its 12-month investment period has begun or selling share prior to the end of the investment period, may experience very different results than the fund’s stated investment objective. These periods begin at either the fund’s inception date or at each subsequent “Initial Investment Day”. Following the initial investment period after fund inception, each subsequent investment period will begin each year on the 􀂦rst day of the month the fund was incepted (subsequent “Initial Investment Days”). Fund management will target a 10% downside buffer, with expectations that it will generally fall between 8-12%. The Fund is not designed to protect against declines of more than 8-12% in the level of the S&P 500 Price Index, and there can be no guarantee that the Fund will be successful in implementing the buffer protect options strategy to avoid the first 8-12% decline.

The Fund invests in options, which involves leverage, meaning that a small investment in options could have a substantial impact on the performance of the Fund. The Fund may invest in FLEX Options issued and guaranteed for settlement by the OCC. The Fund bears the risk that the OCC will be unable or unwilling to perform its obligations under the FLEX Options contracts. Additionally, FLEX Options may be illiquid, and in such cases, the Fund may have difficulty closing out certain FLEX Options positions at desired times and prices. As the options the Fund invests in derive their performance from the S&P 500 Price Index, the Fund is subject to the equity market risk associated with the index. The ETF’s portfolio is more volatile than broad market averages.

Investments involve risk, including potential loss of principal. The Fund employs a buffered strategy in an attempt to buffer against losses in the S&P 500 Price Index over the course of a 1-year period. There is no guarantee the Fund will be successful in this strategy, and investors may experience losses beyond targeted levels. In the event an investor purchases Shares after the date on which the options were entered into or sells Shares prior to the expiration of the options, the buffer that the Fund seeks to provide may not be available and there may be limited to no upside potential. The Fund does not provide principal protection and an investor may experience significant losses on its investment, including the loss of its entire investment.