First Trust Launches Autocallable ETF With Contract-Level Buffers

First Trust has launched the FT Vest Laddered Autocallable Buffer & Resilient Income ETF (FCYB), using swaps and related options to access at least 24 synthetic autocallable contracts with staggered observation and maturity dates. Contracts run for 12–24 months and reference the S&P 500, Russell 2000 and Nasdaq-100, or ETFs tracking them. Coupons are paid regardless of underlying market levels while contracts remain outstanding. Contracts are called when all underlying assets reach or exceed their initial values on a quarterly observation date, ending future coupons and triggering reinvestment. At maturity, each contract seeks to buffer the first 10%–15% of the worst-performing asset’s losses, with losses beyond that borne one-for-one. Buffers apply only at contract maturity, not to the ETF itself. Returns are limited to coupons rather than full equity upside.