Managing volatility

1. 2025 has been off to a volatile start with the VIX elevated amid market uncertainty
2. There is also uncertainty about what the Fed will do with interest rates, and the market is projecting a higher likelihood of cuts through the end of the year
3. iShares Max Buffer ETFs are designed to help investors who are seeking to reduce the impact of volatility, while staying invested in the equity market

On the back of market uncertainty, the market dropped 10% from its peak on February 19^th to its trough on March 13^th.¹ We have also seen volatility trend upward, as measured by the VIX, cracking above 20 and remaining elevated since the end of February.²

1-year treasury rates have remained above 4% since the start of 2025,³ and there is still $6.8 trillion of cash on the sidelines.⁴ Although the Fed held off on cutting rates in the most recent FOMC meeting on March 19, 2025, the market has projected an increased likelihood of the Fed cutting 3 or more times from 23% to 53% by the end of 2025.⁵

Rather than moving into – or staying in – cash, investors may consider Max Buffer ETF strategies, which seek to track the share price return of the iShares Core S&P 500 ETF (IVV), up to an approximate upside cap, while seeking to provide 100% downside protection (minus fees) for a 12-month hedge period.

Max Buffer ETFs can be used strategically for risk-aware investors to gain equity exposure, or as a tactical trade for investors that may want to mitigate risk. The purpose of the chart below is to hypothetically illustrate how the cap and buffer are designed to work over the course of the full hedge period.

This information is strictly for illustrative and educational purposes and is subject to change. This is not meant as a guarantee of any future result or experience. This information does not represent the actual performance of any iShares or BlackRock fund or strategy. The information presented does not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy or investment decision. The funds aim to provide their respective approximate downside buffer against price declines of the Underlying ETF (IVV) over the hedge period, before fees and expenses if held for the entire hedge period. The illustration shows starting caps as of each funds starting hedge period. To see each funds remaining cap please refer to the Buffer Comparison Tool.

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