MCLEAN, Va., April
29, 2019 /PRNewswire/ -- Cboe Global Markets (Cboe: CBOE)
and Cboe Vest Financial, an investment manager that focuses on
targeted investment strategies, recently celebrated the third
anniversary of the launch of Cboe's Target Outcome benchmark
indexes. The fast-growing Target Outcome investment category now
encompasses 45 benchmark indexes, three mutual funds and numerous
exchange-traded funds (ETFs).
Cboe Vest, a majority-owned asset management subsidiary of Cboe
Global Markets, led the creation of the Target Outcome Investment
category, conceiving the methodology and licensing the first
indexes from Cboe. Cboe Vest subsequently launched the first
Target Outcome mutual fund and ETF, and has since provided access
to Target Outcome Investments in managed accounts and Unit
Investment Trusts.
Karan Sood, CEO of Cboe Vest,
said: "While Target Outcome Investments had been available to
institutions and high-net-worth individuals through
derivatives, swaps and structured notes, they were harder
to access in more conventional investments such as mutual
funds and ETFs, particularly as indexed investments.
"Cboe Vest was motivated to make Target Outcome Investments more
accessible to a broader set of investors,
and Cboe's FLEX options made it possible to construct the
necessary benchmarks," Sood said. "The proliferation of Target
Outcome Indexes and related products from Cboe Vest and other asset
managers is gratifying, and we are excited to have sowed the
first seeds of this innovation."
"Over the last three years, Cboe's Target Outcome benchmark
indexes have shown the utility of incorporating options in an
investment portfolio," said Bruce
Traan, Head of Global Index Services at Cboe Global Markets.
"The Buffer Protect strategy, the first Target Outcome index we
launched, utilizes options as risk management tools by enabling
investors to limit downside losses while providing market
participation up to a targeted level."
Cboe's Target Outcome benchmark indexes track the performance of
option-based strategies combined with mainstream underlying indexes
such as the S&P 500. These strategies are designed to target
specific return outcomes relative to this underlying index over a
defined horizon.
Examples include index strategies that provide downside
protection or return enhancement for a range of index levels, or
capture a higher portion of total returns as income for investors
who prefer income distributions to capital gains. These indexes use
options in combination with traditional index return payoffs to
modify return patterns to better fit investor objectives and risk
preferences. Target Outcome benchmark indexes seek to provide a
level of certainty unattainable by other investment
models.
The Cboe S&P 500 Buffer Protect Indexes, launched in
April 2016, were the first in the new
category of target outcome investment benchmarks. They measure the
performance of a hypothetical portfolio of S&P 500® Index (SPX)
FLexible EXchange® (FLEX) options designed to provide annual
targeted returns. Each index in the series is designed to
track the returns of a hypothetical investment that, over a period
of approximately one year, seeks to "buffer protect" against the
first 10 percent of losses due to a decline in the SPX, while at
the same time setting a capped level to the upside.
Subsequent Target Outcome benchmark
indexes created by Cboe include: Cboe S&P 500
Dividend Aristocrats Target Income Index, Cboe S&P 500 Enhanced
Growth Index Series and Cboe S&P 500 Dividend Aristocrats
Target Income Index Series.
About Cboe Vest
In 2016, Vest became an asset management subsidiary of Cboe
Global Markets, Inc., one of the world's largest exchange holding
companies and owner of the Cboe Options Exchange (Cboe
Options, the largest U.S. options exchange and creator of
listed options), Cboe Futures Exchange (CFE) and other
subsidiaries. Today Cboe Vest offers institutional-quality target
outcome investments built on the backbone of its unique investment
philosophy and Cboe's indexes—that strive to buffer losses, amplify
gains or provide consistent income—to a diverse spectrum of
investors. For more information, visit www.cboevest.com
Press Contact:
Linda Werner
703-864-5483
lwerner@cboevest.com
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SOURCE Cboe Vest Financial