# Alternatives and buffers: the promise and the price > Learn to test what a buffer or hedged-equity ETF promised against what it delivered, and what it cost, using real FOCT, HELO and Promise Index data. Data as of Nov 10, 2026. Rebuilt every trading night. ## Alternatives and buffers: the promise and the price Data as of Nov 10, 2026. Rebuilt every trading night. Over 52 weeks to Nov 10, 2026 , HELO fell 56.8% as much as the S&P 500 in its 26 down weeks, inside the 80% limit. Advanced Portfolio Design · Lesson 3 of 5 1 2 3 4 5 Set an amount. See a year of SPY and of HELO, a hedged-equity fund, and what its protection cost. Amount (hypothetical) $10,000 On $10,000: SPY, one year $1,123, HELO, one year $481, Cost of the protection in a rising year $642. Hypothetical amount. One-year total returns to Nov 10, 2026, real marks; HELO's down-week capture 56.8%. ### The question A buffer fund says it limits my losses; a hedged fund, that it falls less than stocks. Did they, and what did I give up? ### The idea - These funds make a specific promise , usually less downside. Two kinds: - A buffer fund names an outcome period , often a year. Over it, the fund absorbs the first part of an index's fall (the buffer , such as 10%) and pays the index's rise up to a ceiling (the cap ). - A hedged-equity fund holds stocks plus protection, usually options (contracts that pay off if prices fall past a set level), aiming to fall less than the market. It is one kind of alternative : a fund built to behave unlike plain stocks and bonds. - Judge them in three steps: - Name the promise exactly. - Test it on its own window. - Price it: what did the protection cost in return? - ETFIQ's Promise check does steps 1 and 2, reading Delivered , Partly or Missed . Step 3 is yours. ### Worked example Two windows, each the fund's own. (Examples, not picks.) FOCT, a buffer fund. Outcome period Oct 20, 2025 to Oct 16, 2026 . Buffer: the first 10% of a fall. Cap: 15.09% , before the fee. - SPY rose 14.88% , under the cap, so the promise was the full rise less the fee. - Fee 0.85% a year, charged for the days in the period: 14.88 less that fee ≈ 14.04% promised. - FOCT returned 14.11% . Gap: 14.11 − 14.04 = +0.07 points . - The check allows half a point for rounding and costs. Delivered . The market rose, so the buffer was never used . "Delivered" proves the upside only. HELO, a hedged-equity fund. The 52 weeks to Nov 10, 2026 ; the S&P 500 fell in 26 . - In those weeks HELO moved 56.8% as much as the S&P 500: its down-week capture . - A hedged-equity fund delivers at 80% or less ; Partly up to 100%. Delivered . (ACIO, at 81.5% , reads Partly .) Now the price. Over Nov 10, 2025 to Nov 10, 2026 : - HELO returned +4.8% , SPY +11.2% . - On $10,000: about $480 against $1,120 . Protection cost about $600 in a rising year. Delivered is not the same as cheap. Whether $600 was worth 43% less of the falls is your call. ### The common mistake "Delivered means a good investment." One stated promise held over one window. FOCT trailed SPY's rise by 0.77 points by design, and its buffer was never tested. A second mistake: "Not measured" means failed. Only 55 of 524 buffer funds had a finished period to test, leaving 84.6% of buffer assets not measured . A blank is a missing test, not a miss. ### Check your understanding Pick an answer to see why. Two of three right passes the lesson. 1. A buffer fund's period ended with its index up 6%, under the cap. The promise was that rise less a 0.8% fee. The fund returned 4.2%. Delivered needs a gap no worse than −0.5 points; Partly, no worse than −1.5. What does the check read? A Delivered B Partly C Missed D Not measured Answer: B. Partly. the promise was 6 − 0.8 = 5.2%; 4.2 − 5.2 = −1.0, between −0.5 and −1.5. Not A: −1.0 is worse than −0.5. 2. A hedged-equity fund moved 70% as much as the S&P 500 in its down weeks and returned 3% while the S&P 500 returned 12%. What is the fair summary? A It failed its promise B It beat the market C It needs no further check D It kept its promise, and the protection cost about 9 points that year Answer: D. It kept its promise, and the protection cost about 9 points that year. 70% is inside the 80% line; 12 − 3 = 9 points is the price. Not A: the promise was to fall less. 3. A buffer fund shows "Not measured" because its first outcome period has not finished. What can you conclude? A Nothing yet: the test has no finished window to read B It missed its promise C It delivered its promise D Its buffer is used up Answer: A. Nothing yet: the test has no finished window to read. the promise covers a full period, so nothing is testable until one ends. Not B: a missing test is not a failed one. ### Takeaways - Name the promise, and test it only on its own window. - Price the protection: compare returns with the market over the same year. - Delivered is not a verdict on value, and not measured is not a miss. ### Do it on ETFIQ Check the promise of a buffer or hedged fund you hold Your fund ### Where to next --- Source: ETFIQ, independent ETF data. Recomputed nightly from public filings and prices. Cite: ETFIQ, Alternatives and buffers: the promise and the price, data as of Nov 10, 2026. https://etfiq.com/academy/advanced-portfolio-design/alternatives-and-buffers/ Licence: https://etfiq.com/license/ Data ETFIQ computes is free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms. HTML: https://etfiq.com/academy/advanced-portfolio-design/alternatives-and-buffers/