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2020 FUND INTELLIGENCE MUTUAL FUND AND ETF AWARDS
WINNER: Fund Innovation of the Year

We are honored to accept the 2020 Fund Innovation Award by Fund Intelligence, in recognition of our pioneering work, as the creator of buffer funds.

Cboe Vest’s investment methodology design, intellectual capital support, industry partnerships, and the infrastructure the firm helped build has given rise to Target Outcome/defined outcome or “buffer” investments. The collective AUM of buffer investment products from all ETF and mutual fund providers exceeds $5bn as of September 30, 2020.[1]

While Cboe Vest launched the first-ever defined outcome buffer fund in 2016, their journey began in 2012 when Karan Sood partnered with Jeff Chang, founding “Vest” to create a new class of investments that would deliver the benefits of structured notes (e.g., targeted payoffs) without their liquidity issues and credit risk.

In October 2012, Vest conceived the novel idea to create outcome-oriented investments registered under the Investment Company Act of 1940 that use Flexible Exchange Options (FLEX Options), solving the aforementioned credit risk and liquidity issues. Vest filed a patent application marking the birth of the concept of Target Outcome Investments®, which “target a defined return profile, with an allowance for a specific level of risk, at a specific point in time.”

In 2013, Vest conceived the “Buffer Protect” strategy (which seeks to provide returns linked to the S&P 500 Index® with 10% downside protection and upside to a cap) and filed for the first investment product registered under the Investment Company Act of 1940 to use FLEX options to replicate the strategy.

In 2016, the Vest team (renamed “Cboe Vest”) invented the first set of Target Outcome Indexes – the Cboe Buffer Protect Index Series. Later in 2016, Cboe Vest launched the first buffer product in a ’40 Act fund, followed by an enhanced growth fund in 2016, target income funds in 2017 and 2018, and then expanded into CITs, UITs, and ETFs in 2019.

Cboe Vest’s pioneering work paved the way for other firms to launch defined outcome investment products beginning in 2018, replicating the Buffer Protect strategy, and leveraging the indexes and methodology built by Cboe Vest.

Cboe Vest continues to lead innovation in the investment community, working with Cboe Global Markets, S&P Dow Jones, the Options Clearing Corporation and the Securities and Exchange Commission to enhance the execution, educational and regulatory framework for, and development of, options-based risk-management strategies and products.

DISCLOSURES

The Fund Innovation of the Year Award for 2020 is hosted by ranking entity Fund Intelligence. The shortlists and winners are comprised of the individuals and firms who have been nominated via the online submission process and through recommendations from market participants. Cboe Vest applied for consideration for the award but did not pay a fee. Judges will use the submitted application material, as well as any uploaded supplemental information, to make a determination on the firm, individual or product they believe to be the most suitable and deserving winners for each category. Judges have the discretionary power to move nominations into alternative categories that they think may be more suitable. The asset manager sales, marketing and leadership awards and the fund director awards will be adjudicated by a panel of industry experts convened by the Fund Intelligence and Fund Directions editorial teams. The industry judges, who must declare any conflict, will contribute their sector expertise to assess the shortlist of candidates and come to a decision on the winners. A separate panel of industry experts will judge the ETF categories. There were five companies that were shortlisted in the Fund Innovation of the Year category.

The advisor is unaware of any undisclosed facts that could potentially invalidate the appropriateness of the award. Furthermore, the advisor does not have any unfavorable ratings to disclose. Cboe Vest is the only advisor that received the award in this category. The receipt of this award is not representative of client experiences because the award criteria do not consider client experience or input. The award is not indicative of Cboe Vest’s future performance, or any future performance pertaining to its clients’ investments. Furthermore, the rating should not be construed by a client or prospective client as a guarantee that they will experience a certain level of results.


[1] Source: FDCC, BNY Mellon, CIBC Mellon and Innovatoretfs.com