Soundwatch Hedged Equity ETF

Soundwatch Hedged Equity ETF (SHDG) owns the S&P 500, mostly through one other fund, the iShares Core S&P 500 ETF (97% of assets as of July 31, 2026), and adds an options overlay on top. It sells call options and spends part of that money on protective puts, aiming for a smoother ride than the index. The trade-offs are limited upside in strong rallies and a 0.91% expense ratio.

• Over the year to Oct 27, 2026, SHDG returned +4.8%, 8th of 8 among similar funds.
• Its worst full calendar year was 2025 (+11.5%); its best was 2024 (+19.7%).
• The deepest fall in its price history was 15.8% (Feb 19, 2025 to Apr 8, 2025), recovered by Jul 22, 2025.

As of Jul 31, 2026, the fund held 1 securities; the ten largest made up 97.06% of assets, and 2.37% sat in cash and money-market holdings.

• Over the three months to Jul 31, 2026, investors withdrew a net $5.7M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +1.21%, +0.33%, +0.32%.

SHDG doesn't track an index. Soundwatch Capital runs it with its own rules-based strategy, which it calls BUY, HOLD & HEDGE. At least 80% of net assets goes to U.S. large-company stock exposure: stocks, equity index futures or ETFs that track indexes such as the S&P 500. As of July 31, 2026, about 97% sat in one ETF, the iShares Core S&P 500 ETF (IVV), and about 2.4% was in cash. Because SHDG owns another fund, the stocks it really holds are the companies inside IVV.

On top of that core, the fund sells call options, covered calls and option spreads on stock indexes or ETFs. A call option gives its buyer the right to purchase at a set price. Selling one brings in cash now but gives up gains above that price. Part of that cash purchases put options or put spreads, which gain value when stocks fall and work like insurance. A put spread costs less but covers only a band of losses. As of July 31, 2026, SHDG held five S&P 500 index option positions expiring in September and December 2026.

The rules set strike prices, expiration dates and trade dates based on measurable market factors. The advisor may also use fundamental, technical and cyclical analysis. Unlike buffer funds, SHDG has no preset protection level or cap, so the cushion and the upside limit shift as its positions change.

• SHDG charges 0.91% a year, versus an average of 0.86% for the similar funds below (6th of 8, cheapest first).
• Of that, 0.6% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.1% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $93 in the first year and $1,227 over 10 years (assuming a 5% annual return).

SHDG keeps S&P 500 exposure but uses protective puts to soften declines, and it has moved less than the market, with a beta of 0.59 over the year to October 27, 2026.

SHDG's options are meant to cushion stock-market drops. Its prospectus shows a loss of 11.9% in 2022 and a worst quarter of -11.57% in early 2020, though 2020 as a whole ended up 11.59%. Its record doesn't go back to the 2008 crisis. Based on market price, its deepest drop was 15.8%, from February 19 to April 8, 2025. It recovered by July 22, 2025, about 3.4 months later. Smaller, shorter declines can mean selling fewer shares at low prices in a bad year.

It isn't an income fund. The yield was 0.47% as of October 27, 2026, paid once a year, and option income is usually taxed as ordinary income. Under the SEC's standard example, its 0.91% expense ratio costs $93 on $10,000 in the first year. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by other buffer (defined-outcome) funds, largest first.