At a glance
FSEP charges 0.85% a year, below the 0.86% average of the 7 funds most like it (the 3rd cheapest of 8). It has $1.25B in assets, the 7th largest of that group. Over the past year it returned +12.2% with distributions reinvested (S&P 500: +11.5%), 4th of those 8 funds; over three years it returned +16.8% a year. At its worst it fell 13.8% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 12 months after the low.
The short version
FT Vest U.S. Equity Buffer ETF – September (FSEP), from First Trust, holds FLEX options on the SPDR S&P 500 ETF Trust (SPY) rather than stocks. Over each one-year period starting in September, it aims to absorb the first 10% of SPY's price loss in exchange for a cap on gains (14% before fees for September 2025–September 2026). It has made no distributions, and its 0.85% expense ratio sits near the 0.86% average of similar buffer funds.
Price history
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FSEP +12.2% 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 | |
|---|---|---|---|---|---|---|
| FSEP official prospectus, to Dec 31, 2024 | — | +13.76% | — | — | — | +10.58% |
| FSEP price data to Oct 27, 2026 | +11.6% | +12.2% | +16.8% | +10.4% | — | +10.6% |
- Over the year to Oct 27, 2026, FSEP returned +12.2%, 4th of 8 among similar funds.
- Its 5-year annualized return was +10.4%.
- Its worst full calendar year was 2022 (-7.0%); its best was 2023 (+20.2%).
- The deepest fall in its price history was 13.8% (Jan 3, 2022 to Jun 16, 2022), recovered by Jun 1, 2023.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +11.6% | — |
| 2025 | +12.8% | — |
| 2024 | +13.6% | +13.76% |
| 2023 | +20.2% | +20.33% |
| 2022 | -7.0% | -7.21% |
| 2021 | — | +11.96% |
| 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 | Lost 12.8% over that stretch · deepest drop along the way 13.8%, back to its old high 11.5 months after the low |
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 withdrew a net $76.2M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.15%, +0.78%, +1.96%.
How it works
FSEP doesn't own stocks. It invests substantially all of its assets in FLEX options. These are exchange-traded option contracts whose exercise prices and expiration dates can be customized. The options reference the SPDR S&P 500 ETF Trust (SPY), a unit investment trust that holds the stocks of the S&P 500 Index. As of August 31, 2026, 16 option positions made up 99.75% of the fund's $1.25 billion in net assets. The fund follows SPY's price only, so it does not capture SPY's dividends.
First Trust and sub-adviser Vest Financial reset the options once a year. For the outcome period from September 22, 2025, to September 18, 2026, the cap (the most the fund can gain) was 14%. The buffer covered the first 10% of SPY losses. Both figures are before fees. After fees, they were 13.15% and 9.15%. If SPY falls more than 10%, the fund takes further losses one for one: a 20% SPY drop means about a 10% fund loss. At each reset the buffer stays at 10%, but the new cap depends on market conditions.
These outcomes apply only to shares held for a full period. Someone who invests partway through may face a very different cap and buffer. In between, the share price can move quite differently from SPY. The fund may also handle creations and redemptions in cash, which can make it less tax-efficient.
What it really costs
- FSEP charges 0.85% a year, versus an average of 0.86% for the similar funds below (3rd of 8, cheapest first).
Structure and tax notes
- Organized as a unit investment trust: it cannot lend out its securities or reinvest dividends between payouts, which can create a small drag versus similar open-end ETFs.
- 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
FSEP aims to soften stock-market losses through its 10% buffer, and it moved less than the market, with a one-year beta of 0.57 as of October 27, 2026.
FSEP could serve as a defensive stock holding. It tracks the S&P 500 through SPY while aiming to absorb the first 10% of losses in each outcome period. It launched in September 2020, so it has no record from the 2008 crisis or the 2020 COVID crash. In 2022 it lost 7.21%, its worst calendar year. Its deepest drop was 13.8%, from January 3 to June 16, 2022. It took about 11.5 months to recover, by June 1, 2023. That drop was larger than the buffer because the buffer works only over a full outcome period. Someone who needed cash in mid-2022 would have redeemed at a real loss. The fund has made no distributions, so any income must come from redeeming shares. It costs 0.85% a year. Past results don't predict future ones, and a plan should weigh the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors seeking SPDR S&P 500 ETF Trust price exposure with a buffer against the first 10% of losses over each one-year September-to-September period.
- Retirees wanting a smoother ride: as of October 27, 2026, three-year volatility was 9% and one-year beta, a market-sensitivity gauge, was 0.57.
- Patient holders who can invest near the September reset and accept a cap, set at 14.00% before fees for the period ending September 18, 2026.
Look elsewhere if
- Income seekers: the fund has made no distributions, and its returns exclude dividends paid by the SPDR S&P 500 ETF Trust it references.
- Cost-conscious investors: the 0.85% annual expense ratio is higher than Innovator's PJAN and PDEC at 0.79%, though below BUFR's 0.95%.
- Those wanting deeper protection: losses past 10% pass through fully, and the fund fell 13.8% peak to trough in 2022, taking 11.5 months to recover.
Close alternatives
Matched by other buffer (defined-outcome) funds, largest first.
| Fund | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|
| FSEP this fund | 0.85% | $1.25B | +12.2% | +16.8% |
| 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 FSEP pay dividends?
No. FSEP has made no distributions. It holds FLEX options on SPY rather than the stocks themselves, and it aims to match SPY's price return only. So the dividends paid by S&P 500 companies are not part of its results, and over long periods that gap can add up. Anyone wanting cash flow from FSEP would have to redeem shares. That makes timing matter, especially partway through an outcome period.
How does the FSEP buffer work?
FSEP aims to absorb the first 10% of SPY's price decline over each one-year outcome period, before fees. For September 22, 2025, to September 18, 2026, the buffer was 9.15% after fees and the cap on gains was 13.15%. If SPY fell 20% over a full period, the fund would lose about 10% before fees. The buffer stays at 10% every period, but the cap resets each September based on market conditions.
What happens if you invest in FSEP after the outcome period starts?
Results can differ sharply from the stated cap and buffer. Those levels are set against SPY's price and the fund's net asset value on the first day of the period. Someone entering after a rally may have little room left before the cap. Someone entering after a drop may have less buffer remaining. About a week before each period ends, the fund's website posts the expected cap range for the next one.
What's the difference between FSEP and FDEC?
Mostly the calendar. Both are part of First Trust's FT Vest U.S. Equity Buffer series, and both charge 0.85% a year. FSEP resets its cap and buffer each September. FDEC, as its name suggests, runs on a December cycle, so each locks in a different cap at a different time. As of October 27, 2026, FSEP returned 12.2% over one year and 16.8% a year over three years, versus 12.9% and 18.5% for FDEC.
How did FSEP do in the 2022 bear market?
FSEP fell 7.21% in calendar 2022, according to its prospectus. That was its only losing calendar year from 2021 through 2025. Its worst quarter was a 9.74% drop in the three months ended June 30, 2022. From peak to low, it slid 13.8% between January 3 and June 16, 2022. That was more than the 10% buffer, because the buffer applies only across a full outcome period. It recovered by June 1, 2023, and gained 20.33% in 2023.