PGIM Nasdaq-100 Buffer ETF October (PQOC)

Overview

PQOC is an investment fund that primarily focuses on using options to help mitigate potential losses on shares of the Invesco QQQ Trust (QQQ) over a one-year timeframe. Commencing every October, the fund is designed to protect against the first 12% of losses that QQQ may incur. While offering this protection, PQOC also forgoes any upside potential beyond a specified cap, which resets annually. This mechanism aims to stabilize returns while safeguarding investors from significant downturns in the underlying asset.

Investors are encouraged to maintain their investment until the conclusion of the defined outcome period to reap the intended benefits of loss moderation. It is crucial to note that purchasing shares outside of the established annual reset day may result in different levels of protection and buffer zones, which could alter the overall risk profile. The fund actively shares interim updates on cap levels through its website. Importantly, the stated targeted cap and buffer do not account for the fund's expense ratio, which affects the net returns of the investment. PQOC exclusively employs FLEX options in managing its portfolio, ensuring a tailored approach to risk management.

Products and Services

• Loss Mitigation Strategy

  PQOC utilizes a strategic approach to limit downside risk on Invesco QQQ Trust shares, specifically targeting the first 12% of potential losses. This proactive measure helps protect investor capital during market fluctuations.

• Cap on Upside Participation

  The fund establishes a predetermined cap, beyond which investors will not benefit from the price appreciation of QQQ. This feature is designed to facilitate downside protection while outlining the potential for limited upside returns.

• Annual Reset Mechanism

  Every October, PQOC resets its loss mitigation and upside cap parameters, allowing it to adapt to changing market conditions and investor needs effectively. This dynamic approach ensures that the protection strategies remain relevant and effective.

• Transparency and Updates

  The fund issuer commits to providing regular updates on cap levels through their website, enabling investors to be informed of current and interim positions. This transparency fosters trust and allows for better-informed decisions by investors.

• FLEX Options Management

  PQOC exclusively employs FLEX options in their investment strategy, which provides the flexibility to tailor options according to the specific needs and objectives of the fund. This dedicated method enhances the fund's ability to manage risk efficiently.