Buffer ETFs: More security in volatile markets

Buffer ETFs can offer innovative protection against price losses while limiting profit potential. How do they work and for whom are they useful?

Focus on diversification and risk management

In a world full of economic geopolitical uncertainty, risk management for private investments is becoming increasingly important. Traditional diversification strategies often reach their limits in periods of market volatility – even broadly diversified portfolios can experience large fluctuations in value. This is where Buffer ETFs come in.

What are Buffer ETFs?

Buffer ETFs are a special form of exchange-traded funds that are designed to cushion losses up to a certain percentage ("buffer") – i.e. not to pass on part of the negative market movements of the investment. This makes them fundamentally different from classic equity or bond ETFs, which always reflect the full market movement (both positive and negative).

The basic principle is simple: Buffer ETFs combine the advantages of diversification with an option strategy that cushions price losses up to a fixed threshold. In return, the profit is capped on the upside. Investors therefore only benefit from the price increase of the underlying index to a certain upper limit.

How do Buffer ETFs work?

Buffer ETFs typically use structured option strategies based on reference indices such as the S&P 500 or MSCI World. The "buffer" refers to the amount of loss protection. An example would be that if the markets fell by 15% within a pre-defined period, the buffer protects against this portion of losses. The "cap" determines how high the maximum profit can be within the term.

Who are Buffer ETFs suitable for?

• Buffer ETFs are aimed at investors with a focus on capital preservation and risk minimization. They are particularly suitable for risk-averse people who want to reduce fluctuations.
• Investor, with clear savings goals and time horizon.
• Investors with an already diversified portfolio who are seeking additional protection mechanisms.
• Strategic investors who anticipate market fluctuations.

Buffer ETFs are not a substitute for classic equity or bond ETFs, but a useful addition for certain market phases or individual risk profiles.

Buffer ETFs as a building block for modern portfolio diversification

Buffer ETFs offer private investors an innovative way to hedge their portfolio by limiting losses and still benefiting from market developments. They combine the advantages of diversification with active risk management mechanisms and are an exciting instrument for capital preservation, especially in volatile markets.

This document is marketing material. Before investing please read the Prospectus and the PRIIPs KID available on www.ishares.com/it, which contain a summary of investors’ rights.

Risk Warnings

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Important information

This document is marketing material.

In the European Economic Area (EEA): this is issued by BlackRock (Netherlands) B.V. is authorised and regulated by the Netherlands Authority for the Financial Markets. Registered office Amstelplein 1, 1096 HA, Amsterdam, Tel: 020 – 549 5200, Tel: 31-20-549-5200. Trade Register No. 17068311 For your protection telephone calls are usually recorded.

This is Marketing Material.

iShares plc, iShares II plc, iShares III plc, iShares IV plc, iShares V plc, iShares VI plc and iShares VII plc (together 'the Companies') are open-ended investment companies with variable capital having segregated liability between their funds organised under the laws of Ireland and authorised by the Central Bank of Ireland. The Prospectus (Available in French, German, Polish and English Languages) Key Investor Information document (UK only), PRIIPs KID and further information about the Fund and the Share Class, such as details of the key underlying investments of the Share Class and share prices, is available on the iShares website at www.ishares.com or by calling +44 (0)845 357 7000 or from your broker or financial adviser. The indicative intra-day net asset value of the Share Class is available at http://deutsche-boerse.com and/or http://www.reuters.com. A UCITS ETF’s units / shares that have been acquired on the secondary market cannot usually be sold directly back to the UCITS ETF itself. Investors who are not Authorised Participants must buy and sell shares on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees and additional taxes in doing so. In addition, as the market price at which the Shares are traded on the secondary market may differ from the Net Asset Value per Share, investors may pay more than the then current Net Asset Value per Share when buying shares and may receive less than the current Net Asset Value per Share when selling them. Any investment decision should be made on the basis of the information outlined above and Investors should understand all characteristics of the funds objective before investing, if applicable this includes sustainable disclosures and sustainable related characteristics of the fund as found in the prospectus, which can be found www.blackrock.com on the relevant product pages for where the fund is registered for sale. For information on investor rights and how to raise complaints please go to https://www.blackrock.com/corporate/compliance/investor-right available in in local language in registered jurisdictions.

UCITS HAVE NO GUARANTEED RETURN AND PAST PERFORMANCE DOES NOT GUARANTEE THE FUTURE ONES.

In Italy: For information on investor rights and how to raise complaints please go to https://www.blackrock.com/corporate/compliance/investor-right available in Italian.

Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.

This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.

© 2025 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS and iSHARES are trademarks of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.