At a glance
BUFM charges 0.69% a year, below the 0.86% average of the 7 funds most like it (the cheapest of 8). It has $466.9M in assets, the 8th largest of that group.
The short version
AB Moderate Buffer ETF (BUFM) is an actively managed fund that holds options on the SPDR S&P 500 ETF Trust instead of stocks. Over periods of about 90 days, it aims to cushion share-price drops of up to 10%, sometimes after taking a first 2% loss. In exchange, gains are capped at about 4% to 5% per period. Its 0.69% expense ratio is the lowest of the eight buffer funds compared, but it is also the smallest.
Price history
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BUFM — over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| BUFM official prospectus, to Dec 31, 2025 | — | +10.87% | — | — | — | — |
| S&P 500Index index, same period | — | +13.74% | — | — | — | — |
| BUFM price data to Oct 27, 2026 | +2.3% | — | — | — | — | — |
- The deepest fall in its price history was 1.8% (Aug 13, 2026 to Sep 16, 2026), not yet recovered.
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Before this security existed |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Before this security existed |
What's inside
As of Aug 31, 2026, the fund held 0 securities; the ten largest made up 0% of assets.
| Holding | Weight |
|---|
By country
By asset type
What changed recently
- Over the three months to Aug 31, 2026, investors added a net $43.5M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: -0.13%, +0.27%, +1.41%.
How it works
BUFM doesn't own stocks directly. Instead, it holds FLEX options, which are exchange-listed options whose strike price and expiration date can be customized. They all reference the SPDR S&P 500 ETF Trust (SPY). The fund uses four of them. A purchased call gives it exposure to SPY. A purchased put and a written put create the buffer. A written call sets the cap. As of August 31, 2026, the purchased call made up 98.9% of assets, and all four options expired September 30, 2026. Cash was 0.54% of assets.
Each "hedge period" usually lasts 90 days, though it can run up to 120. The prospectus expects the cap to fall between 4% and 5%, and it changes each period with market conditions. The buffer covers SPY price declines up to a 10% limit. The fund may absorb the first 2% of a drop before the buffer starts. Losses beyond 10% pass through to the fund. The cap and buffer are set before fees, and they are measured from the start of each period, not from the day you invest.
Because the fund is actively managed, the adviser can reset the options early to lock in gains or protect capital. It calls this an "Upside Ratchet," and each reset starts a new period with a new cap and buffer. The prospectus says BUFM is not a "defined outcome" fund. It also expects frequent trading, even though reported turnover was 0%.
What it really costs
- BUFM charges 0.69% a year, versus an average of 0.86% for the similar funds below (1st of 8, cheapest first).
- Using the prospectus's standard example, $10,000 invested would cost about $70 in the first year and $859 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| BUFM | $70 | $221 | $384 | $859 |
Structure and tax notes
- Uses options to limit losses within a range (the buffer) in exchange for a cap on gains over each outcome period; results depend on when you buy relative to the period start.
In a retirement portfolio
BUFM trades away most stock-market gains in each roughly 90-day period in exchange for a cushion against moderate S&P 500 declines.
BUFM launched December 10, 2024, so it has not been tested in the 2008, 2020 or 2022 downturns. Its record is short. In 2025, its weakest quarter was still a 0.25% gain, in the first quarter. Its 1-year return through December 31, 2025 was 10.87%, compared with 13.74% for the S&P 500. Price history starts June 9, 2026. Its deepest drop in that window was 1.8%, from August 13 to September 16, 2026, and it had not recovered as of October 27, 2026. If you need to cash out shares in a bad year, keep in mind that the buffer covers only declines up to 10% per period, and your results depend on where the period stands when you invest. The fund has recorded no distributions, so it offers no income. On the SEC's standard $10,000 example, costs come to $70 in year one. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors wanting S&P 500 exposure with a cushion against SPY drops of up to 10% per roughly 90-day period, while accepting gains capped near 4%–5%.
- Buffer-fund shoppers who care about cost: its 0.69% expense ratio compares with a 0.86% average across the similar buffer funds.
- Those comfortable with active management, where the adviser may reset the options early to lock in gains or protect capital.
Look elsewhere if
- Anyone who needs regular income from a holding: BUFM has recorded no distributions.
- Investors seeking protection from severe crashes: SPY losses beyond 10% in a period pass through, and the fund may take a first 2% loss.
- Those wanting a long track record or tax efficiency: it launched in December 2024 and handles creations and redemptions in cash, which may be less tax-efficient.
Close alternatives
Matched by other buffer (defined-outcome) funds, largest first.
| Fund | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|
| BUFM this fund | 0.69% | $466.9M | — | — |
| BUFR FT Vest Laddered Buffer ETF | 0.95% | $10.49B | +11.6% | +16.8% |
| BUFD FT Vest Laddered Deep Buffer ETF | 0.95% | $2.04B | +9.5% | +13.9% |
| PJAN Innovator U.S. Equity Power Buffer ETF - Ja… | 0.79% | $1.44B | +10.5% | +14.8% |
| PDEC Innovator U.S. Equity Power Buffer ETF - De… | 0.79% | $984.1M | +11.6% | +14.9% |
| FDEC FT Vest US Equity Buffer ETF - December | 0.85% | $1.31B | +12.9% | +18.5% |
| FJAN FT Vest US Equity Buffer ETF - January | 0.85% | $1.47B | +12.3% | +17.4% |
| FFEB FT Vest U.S. Equity Buffer Fund - February | 0.85% | $1.42B | +12.9% | +18.6% |
Questions investors ask
Does BUFM pay dividends?
No. BUFM has recorded no distributions. The fund holds options on the SPDR S&P 500 ETF Trust rather than the stocks themselves. Option holders don't collect the dividends that S&P 500 companies pay, so BUFM's returns come only from the options' value. That makes it a poor fit for anyone counting on a holding for regular income.
How does the BUFM buffer work?
BUFM uses four FLEX options on SPY to cushion price declines of up to 10% over a hedge period of about 90 days. The fund may absorb the first 2% of a drop before the buffer starts. In exchange, gains are capped at about 4% to 5% per period. The buffer and cap are measured from the start of each period, not from the day you invest, and they don't account for fees.
What is BUFM's expense ratio?
BUFM's expense ratio is 0.69%, according to its prospectus filed March 27, 2026. That makes it the cheapest of eight buffer funds compared, where the average is 0.86%. In the SEC's standard example, $10,000 invested at a 5% annual return would cost about $70 after one year, $221 after three, $384 after five and $859 after ten.
BUFM vs BUFR: what's the difference?
Both are buffer funds tied to U.S. large-cap stocks, but they're built differently. FT Vest Laddered Buffer ETF (BUFR) costs 0.95% and had about $10.5 billion in net assets as of August 31, 2026. As its name suggests, it ladders, spreading its money across buffer periods that start on different dates. BUFM costs 0.69%, had about $467 million, and actively manages a single set of roughly 90-day options that the adviser can reset early.
Can you lose money in BUFM?
Yes. The prospectus warns that the buffer may not protect against losses. The fund may take the first 2% of a decline, and SPY drops beyond 10% in a hedge period pass straight through. Fees also reduce the protection. The deepest price drop in the fund's available history was 1.8%, from August 13 to September 16, 2026.