At a glance
TSEP charges 0.95% a year, above the 0.86% average of the 7 funds most like it (the 6th cheapest of 8). It has $16.1M in assets, the 8th largest of that group. Over the past year it returned +7.9% with distributions reinvested (S&P 500: +11.5%), the weakest of those 8 funds.
The short version
FT Vest Emerging Market Buffer ETF - September (TSEP), from First Trust, holds customized options on the iShares MSCI Emerging Markets ETF instead of stocks. Over each roughly one-year period, it aims to absorb the first 10% of that ETF's price losses, with gains capped at 27.73% before fees through September 17, 2027. Similar buffer funds mostly track US stocks; TSEP charges 0.95% a year, above their 0.86% average, and forgoes dividends.
Price history
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TSEP +7.9% 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 | |
|---|---|---|---|---|---|---|
| TSEP official prospectus, to Dec 31, 2025 | — | +20.94% | — | — | — | +14.29% |
| TSEP price data to Oct 27, 2026 | +7.9% | +7.9% | — | — | — | +12.5% |
- Over the year to Oct 27, 2026, TSEP returned +7.9%, 8th of 8 among similar funds.
- Its worst full calendar year was 2025 (+20.9%); its best was 2025 (+20.9%).
- The deepest fall in its price history was 9.8% (Mar 17, 2025 to Apr 8, 2025), recovered by May 5, 2025.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +7.9% | — |
| 2025 | +20.9% | +20.94% |
| 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 withdrew a net $1.3M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.81%, -0.08%, +2.84%.
How it works
The fund doesn't own stocks directly. Instead, it puts substantially all of its assets into FLEX options on the iShares MSCI Emerging Markets ETF (EEM). EEM is a BlackRock fund that tracks the MSCI Emerging Markets Index of large- and mid-sized companies. An option is a contract that gives the right to trade an asset at a set price by a set date. FLEX options are exchange-traded contracts with customized terms. As of August 31, 2026, they made up 99.69% of net assets. Vest Financial LLC is the fund's sub-advisor.
The options are arranged so that, from September 21, 2026 to September 17, 2027, the fund aims to match EEM's price gains up to a cap of 27.73%, or 26.79% after fees. It also aims to absorb the first 10% of EEM's losses (9.05% after fees). Past that, losses pass through one for one: a 20% EEM drop means a 10% fund loss before fees. EEM's dividends are not included.
On the first day of each new period, the fund resets into fresh options. The 10% buffer stays the same, but the cap changes with market conditions. The targets apply only to shares held for a whole period. Investors who purchase partway through or exit early may see very different results.
What it really costs
- TSEP charges 0.95% a year, versus an average of 0.86% for the similar funds below (6th of 8, cheapest first).
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
It adds emerging-market stocks to a portfolio, with a 10% buffer that softens moderate losses over a full outcome period but not deep ones.
TSEP launched on September 20, 2024, so it did not exist during the 2008 financial crisis, the 2020 COVID crash or the 2022 bear market. Its only full calendar year, 2025, returned 20.94%. Its deepest drop was 9.8%, from March 17 to April 8, 2025, and it recovered within a month, by May 5, 2025. The buffer covers only the first 10% of the iShares MSCI Emerging Markets ETF's losses over a full period. A retiree who must sell mid-period, or who meets a deeper slump, could still take sizable losses.
The fund has recorded no distributions, and its returns leave out the ETF's dividends, so any income would have to come from selling shares. It costs 0.95% a year, above the 0.86% average for similar buffer funds. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors who want emerging-market stocks through the iShares MSCI Emerging Markets ETF but with the first 10% of each period's losses absorbed.
- People willing to give up gains above the cap, 27.73% before fees through September 17, 2027, for a cushion against moderate emerging-market losses.
- Patient holders who can enter near the September reset and stay the full outcome period, the window the cap and buffer are built around.
Look elsewhere if
- Retirees seeking income: TSEP has recorded no distributions, and its returns leave out the dividends paid by the iShares MSCI Emerging Markets ETF.
- Cost-focused investors: the 0.95% expense ratio, or yearly fee, ties for highest among similar buffer funds, whose average is 0.86%.
- Anyone wanting full emerging-market upside or deep-crash protection: gains stop at the cap, and losses beyond 10% pass through one for one.
Close alternatives
Matched by other buffer (defined-outcome) funds, largest first.
| Fund | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|
| TSEP this fund | 0.95% | $16.1M | +7.9% | — |
| 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
How does the TSEP buffer ETF work?
TSEP uses FLEX options (customized exchange-traded options) on the iShares MSCI Emerging Markets ETF (EEM) to shape a roughly one-year outcome. From September 21, 2026 to September 17, 2027, it aims to match EEM's price gains up to 27.73% before fees (26.79% after) and absorb the first 10% of EEM's losses (9.05% after fees). If EEM falls 20% over the period, the fund aims to lose 10% before fees. These targets apply to shares held for the whole period, and they are not guaranteed.
Can you lose money in TSEP?
Yes. The buffer covers only the first 10% of the iShares MSCI Emerging Markets ETF's price losses over a full outcome period, or 9.05% after fees. Past that, losses pass through one for one, and the prospectus warns that a shareholder could lose their entire investment. Investors who enter after a period starts or exit before it ends may get very different results from the stated buffer. The fund's deepest drop through October 27, 2026 was 9.8%, from March 17 to April 8, 2025.
Does TSEP pay dividends?
No. TSEP has recorded no distributions. The fund holds options rather than stocks, and its returns are designed to follow only the price of the iShares MSCI Emerging Markets ETF, so the dividends that ETF pays are left out. As a result, TSEP can trail the ETF's total return even when the ETF's gain stays below the cap. Retirees who want cash from this holding would need to sell shares.
What's the difference between TSEP and FJAN?
The main difference is the market underneath. TSEP's options reference the iShares MSCI Emerging Markets ETF, while FT Vest US Equity Buffer ETF - January (FJAN), from the same fund family, is a US stock buffer fund. FJAN costs 0.85% a year versus TSEP's 0.95%. It held $1.47 billion in net assets against TSEP's $16.1 million as of August 31, 2026. Over the year to October 27, 2026, FJAN returned 12.3% and TSEP 7.9%. They are not interchangeable.
When does TSEP reset its cap?
TSEP resets each September. The outcome period runs from September 21, 2026 to September 17, 2027, and the next one begins the day it ends. At each reset, the fund moves into new FLEX options. The 10% buffer stays the same, but the cap is set by market conditions and may rise or fall. About a week before the period ends, the fund's website lists an expected cap range for the next period, though the final cap may land outside it.