What’s Ahead:

• The NewEdge Structured Note Advisory Portfolio (SNAP) is an expertly managed strategy that features numerous key advantages over buffered ETFs.
• SNAP is tactical, actively harnessing changes in market volatility and adjusting portfolio holdings as markets change.
• SNAP can be an efficient and effective solution, helping clients achieve their investment goals.

Financial advisors have more choices than ever to deliver risk-managed equity exposure to their clients. Protection, income, and hedged strategies have been used by sophisticated investors for years, all-time highs in the stock market notwithstanding. Sussing out what’s actually helpful for individual investors is no small challenge. Indeed, many products are touted for their diversification benefits, but then fail to live up to a lofty billing once volatility strikes.

There’s something new on the block. Well, it may seem new. The NewEdge Structured Note Advisory Portfolio (SNAP) is a professionally managed protective investment strategy. It aims to provide equity-like returns, while guarding against volatility and downside market price action. 

Today, we’ll make the case that SNAP may outshine one popular segment of the protective investment product space: buffered ETFs. Both SNAP and buffered ETFs have built-in risk management, but for advisors seeking more customized and tactically responsive solutions, the SNAP approach stands out.

The Appeal of Buffered ETFs: Simplicity and Access

Since their debut in 2018, buffered ETFs have enjoyed significant growth and adoption. Financial advisors and DIY investors have heard the sales pitches and many have allocated at least part of their capital to this emerging ETF class. 

For background, buffered ETFs typically provide packaged exposure to a major equity index, such as the S&P 500, offering a predefined level of downside protection, known as the “buffer.” There typically is an upside participation rate—up to a cap—and performance is determined over a predetermined period, typically one year. Buying at inception should offer holders some access to market gains, while protecting against a defined amount of downside market risk.

By our count, there are more than 130 buffered products on the market from a range of sponsors. Scan their websites, and you’ll find an emphasis upon such things as liquidity, ease of access, and defined outcome nature of buffered ETFs. Their fees are on par with those of SNAP and other Structured Note SMA products, but beneath the surface, several structural limitations of buffered ETFs warrant careful consideration.

The SNAP Advantage: Professional Management, Tactical Flexibility & More

Off-the-shelf buffered ETFs are basic to buy, but once in a portfolio, they can be tricky to manage within a broader allocation. SNAP, on the other hand, does not have a static outcome period. Professional investment managers tactically construct a portfolio of customized Structured Notes seeking to generate attractive market returns while managing downside risk. To do so, they can build a portfolio of Structured Notes with a range of maturity dates, upside participation percentages, and buffer amounts, including both hard and soft protection types. Buffered ETFs merely mechanically invest on predetermined dates and on predetermined terms without taking equity market conditions and developments into consideration.

SNAP’s tactical flexibility can result in superior investment returns. Whereas buffered ETFs typically are bound by given constraints and narrow objectives, the team of professional investment managers at NewEdge has greater flexibility and can ladder investments, harvest gains, take tax losses, hold dry powder, and tactically reinvest proceeds from matured Structured Notes when market conditions dictate. For instance, March-April 2025 featured increased equity market volatility, which created a tactical  opportunity to purchase Growth Notes with enhanced upside participation.

SNAP’s advantage is also seen in its more dynamic growth potential. Buffered ETFs typically have self-imposed caps on equity market participation, meaning if the underlying equity index rises above a predetermined percentage, the buffered ETF owner might miss out on a significant portion of the increase. There are no such preset limits with SNAP. Rather, SNAP’s managers can tactically select Structured Notes that capture more potential market upside, while still offering meaningful downside risk mitigation.

The Liquidity Trade-off: A Closer Look

Liquidity is often touted as a key advantage of buffered ETFs. It makes sense, as it’s an exchange-traded product; you can log in, then buy and sell at any time of the trading day. This perceived perk comes at a cost, though. You see, most individuals have time horizons of at least a few years, so the ability to get in and out is often a benefit that’s simply not needed, particularly when numerous other holdings already provide sufficient liquidity. Therefore, for clients whose portfolios already include highly liquid assets such as equities, mutual funds, and money market instruments, the incremental liquidity of buffered ETFs may not add meaningful value. In fact, advisors must weigh whether the embedded cost of liquidity aligns with their fiduciary responsibility to act in clients’ best interests. In many cases, the value of a tactical, professionally managed, potentially higher-performing strategy, such as SNAP, may outweigh the perceived advantages of ETF liquidity.

A Better Fit for Best Interest Standards?

Buffered ETFs’ simplicity may appear strong on paper, but whether they are a good fit for clients is questionable, particularly when carefully and thoroughly assessed. In an environment where fiduciary standards are rightly scrutinized, SNAP’s flexibility, professional management, and customization offer financial advisors and their clients significant benefits.

The Bottom Line

Buffered ETFs have helped bring protective investment solutions to the masses by leveraging the familiarity of the ETF wrapper. Still, amid evolving portfolio management trends, a second look at the playing field is warranted. The NewEdge SNAP strategy gives advisors a unique, differentiated investment solution.

Financial advisors and their clients can benefit from a more flexible, tailored, and opportunistic approach.

Please see our Halo Disclosure Page for important disclosures

An investment in Structured Notes may not be suitable for all investors. These investments involve substantial risks. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Content and any tools discussed are provided for educational and informational purposes only. Halo Investing makes no investment recommendations and does not provide financial, tax, or legal advice. Any structured product or financial security discussed is for illustrative purposes only and is not intended to portray a recommendation to buy or sell a particular product or service.

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