MutualFundWire.com: First Trust Combines a Downside Buffer With a "Digital Return"

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Tuesday, October 21, 2025

First Trust Combines a Downside Buffer With a "Digital Return"

The team at a $299-billion-AUMS* fund firm near Chicago and a $54-billion-AUMS, Mid-Atlantic subsidiary are partnering again, this time with a new kind of downside protection ETF.

Yesterday (October 20), Ryan Issakainen, senior vice president and ETF strategist at First Trust Advisors L.P. [profile], unveiled the launch of the FT Vest U.S. Equity Buffer & Digital Return ETF - October (DGOC on the Cboe BZX). Wheaton, Illinois-based First Trust serves as investment advisor to the new fund, while McLean, Virginia-based Vest Financial LLC serves as subadvisor.

DGOC's inception date was Friday (October 17). The new ETF comes with an expense ratio of 85 basis points, and it now has about $1.536 million in AUM**.

The launch of DGOC expands First Trust's Target Outcome Investments suite to a new area: "target outcome buffer & digital return funds." Two Vest managing directors, Trevor Lack and Karan Sood, PM DGOC.

DGOC is specifically designed to protect against losses of 10 percent or less in the giant SPDR S&P 500 ETF (SPY) over the next year (from October 20, 2025 through October 16, 2025), while also offering a predetermined return of 8.8 percent so long as SPY rises, stays flat, or falls no more than 10 percent over that year. If SPY falls more than 10 percent, DGOC is designed to protect against the first 10 percent drop (so even in the extreme event that SPY fell 100 percent over the next year, DGOC would fall 90 percent.)

Issakainen describes DGOC as "a compelling solution for investors, seeking to provide attractive positive returns even when equity markets are modestly lower, while also buffering downside risk when markets face steeper losses." Jeff Chang, president of Vest, call DGOC's launch an introduction of "a new way to pursue target outcomes — offering a predetermined digital return when the market is flat, modestly down, or rising."

"In an environment where volatility and uncertainty remain top of mind, this may provide advisors with a new tool: a preset digital return across a wide range of market scenarios, combined with a downside buffer," Chang states. "It reflects Vest's commitment to delivering outcome-focused solutions that can provide more clarity, control, and consistency to portfolio construction."

DGOC is an actively managed, non-diversified series of First Trust Exchange-Traded Fund VIII. The new ETF's other service providers include:

the Bank of New York Mellon (BNY Mellon) as administrator, custodian, fund accounting agent, and transfer agent;

Chapman and Cutler LLP as counsel;

Deloitte & Touche LLP as independent accounting firm; and

First Trust Portfolios L.P. as distributor.