This is an active ETF that holds US-listed stocks while buying put options on broad market indexes and ETFs to limit downside risk. Stocks are selected using criteria that combine growth, momentum, value, and dividends.

It suits risk-conscious investors who want to keep equity exposure while cushioning losses during sharp market declines.

It is an actively managed ETF run by Aptus Capital Advisors.

The fund selects and holds US-listed stocks that meet growth, momentum, value, and dividend requirements. At the same time, it buys listed put options on individual stocks or on broad market indexes and ETFs, using a drawdown management strategy designed to reduce losses during sharp market declines.

• Explicit downside hedging through put options
• Stock selection combining growth, momentum, value, and dividends

Assets under management (AUM) stand at $309.6M, and the total expense ratio is 0.79% per year.

Unlike a simple index-tracking ETF, the cost of option hedging can affect performance separately from the management fee.

In rising markets, hedging costs may limit returns somewhat compared with a pure index-tracking approach. In falling markets, the option hedge tends to cushion losses, so relative performance varies with the market environment.

Demand for downside protection during periods of heightened volatility influences fund flows, which tend to move in line with shifts in interest across the risk-managed active ETF category.

Downside risk management is its core strength, while limited performance in rising markets and option costs can work against it.

Among comparable products in the same risk-managed, hedged equity category, HELO and FHEQ shown in the table are active ETFs that hedge equity exposure with an option overlay, while INFO focuses on a large-cap core and CAOS focuses on tail-risk protection. For low-cost core exposure, you can also consider broad index ETFs such as SPY and VOO, and if downside protection is the priority, the buffered PHDG is also worth reviewing.

Here are the points to review before investing in ADME. Given the nature of the hedging structure, it is especially important to understand in advance the cost burden, the performance differences across market environments, and how the option overlay works.

In strong rising markets, hedging costs can limit returns relative to the index, and the hedge does not prevent every decline. The effectiveness of the option strategy depends on market volatility and management decisions.

It is a suitable choice for risk-conscious investors who want to keep equity exposure while cushioning losses. Given the costs and the limited gains in rising markets, it is reasonable to consider it as a complement to core holdings.