This is a defined outcome ETF that gives exposure to a US equity index while using options to protect against deeper-range losses. Over a one-year outcome period, it cushions a wider range of losses than a standard buffer ETF, in exchange for a lower upside cap, and the structure is reset every March.

It suits conservative investors who want US equity exposure and are willing to accept a lower upside cap in return for protection against deeper-range losses.

It is a passive (index-tracking) ETF managed by First Trust.

The fund gives exposure to a US equity index and uses an options structure to cushion deeper-range losses than a standard buffer over the one-year outcome period. In return, it places a lower cap on upside gains. A new buffer and cap are set every March, and buying partway through the outcome period can change the protection and cap that apply.

• Structure that cushions deeper-range losses
• Defined outcome design with a lower upside cap

Assets under management (AUM) stand at $471.3M, and the total expense ratio is 0.85% per year.

Compared with other buffer and defined outcome ETFs such as BUFR and BUFD, the main points of comparison are the level of protection, the upside cap, and the outcome period.

A deep buffer strategy tends to show the following pattern: in rising markets, the lower cap limits returns more than the underlying index, while in falling markets, the wider cushioned range sharply reduces drawdowns. The protection and cap that actually apply depend on whether you enter partway through the outcome period.

Defined outcome products tend to attract inflows from demand for downside protection when market uncertainty rises, and money sometimes shifts into this product group when demand for greater protection grows. It is also worth noting that performance varies with market conditions and the outcome period.

Deeper downside cushioning is its strength, while the lower upside cap, dependence on the outcome period, and changing conditions for mid-period entry are factors to consider.

For direct exposure to US equities without protection, direct alternatives include SPY and VOO, which track the S&P 500. For a laddered buffer that spreads across several outcome periods, products such as BUFR are also worth comparing. Buffer products with a different start month, such as GFEB, can also be reviewed alongside it. The three products shown in the table, BUFR, BUFD, and PJAN, differ in protection range and structure, being a laddered buffer, a deep buffer, and a buffer with a different start month, respectively. What sets this ETF apart is its deeper buffer structure based on a March start.

Here are the points to check before investing in DMAR. The deeper downside cushion is attractive, but the lower upside cap, dependence on the outcome period, and the limits of the cushion need to be confirmed in advance. It is best to approach the product only after fully understanding the defined outcome structure.

The lower upside cap and large declines that exceed the buffer are the main variables for performance, and buying partway through the outcome period changes the protection and cap that apply. Without a full understanding of the defined outcome structure, you may end up with results that differ from your expectations.

It is a suitable candidate for conservative investors who want US equity exposure with protection against deeper-range losses. For investing without protection, products such as SPY and VOO fit better, while for a deeper buffer structure, it is advisable to choose this product after understanding how it works.