Tech Pullback Bothering Your Portfolio? Buffer ETFs Might Be Your Answer

Tech stocks just got hammered. Oracle’s earnings miss dragged down the entire AI cohort—NVIDIA, Micron, and others felt the pain. Broadcom fell 11% despite solid earnings. The culprit? Massive AI investments that haven’t paid off yet, combined with lingering valuation concerns that keep bothering investors and analysts alike.

Retail investors are understandably nervous. But here’s the thing: instead of bailing out or timing the market, you could explore a different approach—one that lets you stay invested while limiting downside risk.

What Are Buffer ETFs, Anyway?

Think of Defined Outcome ETFs (aka Buffer ETFs) as a middle ground between aggressive growth and defensive plays. They use options strategies to create a structured payoff framework over a set period, usually 12 months.

Here’s how they work: you get a capped upside (meaning returns are limited to a specific level) but you also get downside protection—typically 10%, 15%, or 20% of losses are buffered. So if the market drops 15%, your portfolio might only fall 0% thanks to that buffer. In exchange, if the market surges 50%, you might only capture 35%.

It’s transparency meets protection. You know exactly what you’re signing up for at the start.

Goldman Bullish on Buffer Strategy

Goldman Sachs didn’t get this big by missing trends. The asset management unit just shelled out $2 billion to acquire Innovator Capital Management, a pioneer in defining outcome ETFs. The deal should close in the first half of 2025. Translation: Wall Street sees real money in this space.

Three Buffer ETFs Worth Watching

BUFR (FT Vest Laddered Buffer ETF)

• Provides S&P 500 exposure through a laddered portfolio of 12 individual buffer ETFs
• Fee: 0.95%
• 6-month return: 9.7% vs. SPY’s 13.6%

BUFQ (FT Vest Laddered Nasdaq Buffer ETF)

• Targets Nasdaq-100 large-caps with similar buffering mechanics
• Fee: 1.00%
• 6-month return: 9.8%

DECW (AllianzIM U.S. Large Cap Buffer20 Dec ETF)

• Matches SPY returns up to a cap, with 20% downside buffer
• Current outcome period: Dec 1, 2024 – Nov 30, 2025
• Fee: 0.74%
• 6-month return: 11.3%

The Trade-Off

You’re not going to catch every rally with a buffer ETF. BUFR and BUFQ slightly underperformed SPY over six months. But that’s the point—you paid a small price in upside for peace of mind. When the next selloff hits, that 15% or 20% buffer starts looking pretty attractive.

If AI volatility and tech valuations keep bothering your sleep at night, buffer ETFs deserve a closer look.