ProfitShield

About the system

Performance:

Description

ProfitShield – Key Features

ProfitShield is a system built entirely with Buffer ETFs. These instruments combine the benefits of stock market investing with built-in risk mitigation. They track an underlying index up to a predefined maximum return (cap), allowing investors to participate in rising markets. At the same time, they offer a protection mechanism against losses, which helps limit downside risk in falling markets.

Buffer ETFs come in various forms, each with its own characteristics. Some provide protection against the first 10% to 15% of annual losses, with a maximum annual return of around 12%. Other variants offer 100% annual downside protection, but with a lower return of approximately 7%. There are also quarterly variants that buffer smaller losses per quarter, with an adjusted maximum return.

How does ProfitShield work?

The system is based on the S&P 500 and Nasdaq 100 indices. The portfolio is constructed using a combination of different Buffer ETFs — for example, 100% Buffer ETFs (100% protection), 15% Buffer ETFs, and other variants. The maximum possible annual return with ProfitShield is approximately 12%.

Every month, we review how to optimize risk and return. In expected bear markets, we emphasize 100% Buffer ETFs combined with ETFs that can absorb the first 30% of a decline, for example. In neutral markets, we use more 15% Buffer ETFs. In bull markets, we focus on variants that offer 5% quarterly protection with a maximum possible return of 4% per quarter.

Why ProfitShield with Buffer ETFs?

Buffer ETFs are excellent for portfolio diversification and add extra value, which is essential for a balanced investment strategy. They not only protect against market losses but also reduce overall portfolio volatility. This makes them valuable when used with different protection levels, allowing ProfitShield to be flexibly adjusted.

Although Buffer ETFs sometimes have higher costs, they are often more cost-effective than actively managed funds.

ProfitShield can also serve as an alternative to bonds, especially in a low-interest-rate environment where bond yields remain limited.

Furthermore, Buffer ETFs offer an attractive solution for investors with excess cash that they don’t need in the short or medium term. Instead of leaving money on a savings account with minimal return, ProfitShield provides the opportunity to generate potential returns with built-in protection against market declines.

In short, ProfitShield offers many advantages:

1. Protection – Always a significant buffer against market downturns.
2. Return potential – The ability to roll certain Buffer ETFs periodically and benefit from rising markets with a new cap.
3. Diversification – A valuable addition to any portfolio thanks to its different dynamics of lower volatility and profit potential.
4. Ease of use – Investors do not need to implement complex strategies themselves, as all necessary transactions are executed automatically within the ETF. This makes Buffer ETFs accessible for both beginners and experienced investors.
5. Above all: Peace of mind – No need to panic during market corrections.

Considerations and Risks

While Buffer ETFs offer many benefits, there are also some important points to note:

• Currency risk: ProfitShield is offered in euros, but has underlying exposure to the US dollar.
• Return cap: Investors do not benefit from price increases above the predefined cap.
• Higher costs: Buffer ETFs have higher average expense ratios (0.8%) compared to traditional ETFs (average 0.5%).
• Periodic issuances: New buffer levels and caps are set every year or quarter, depending on market conditions such as volatility and interest rates. When volatility is low, both buffers and caps are usually lower, and vice versa.

In conclusion

The ProfitShield system, introduced at the beginning of 2024, delivered strong results in its first year. In 2024, the portfolio achieved a gross return of 12.2%. This result is even more impressive because it does not include the favorable dollar exchange rate movement, which added an extra 6% gain in the same period.

ProfitShield therefore offers a balanced solution for investors who seek capital preservation without sacrificing growth potential. After one year in operation, the concept has proven its value by combining stability and upside potential in one streamlined investment strategy.