“Boomer candy” is an industry term for defensive ETFs built with older investors in mind. These funds prioritize capital preservation, lower volatility, and steady income over high-octane growth. They cater to those with lower risk tolerance who still want their money working for them without the wild swings of the stock market.
This isn’t your classic 60% stocks and 40% bonds portfolio, which got hit almost as hard as all-equity portfolios in 2022. Both stocks and bonds fell together as inflation and rising interest rates wrecked the usual diversification play. Boomer candy ETFs are more sophisticated…and pricier.
Now, I’m not including defined outcome or buffer ETFs here. These products tend to be advisor-focused tools, not DIY-friendly solutions. There’s a heavy behavioural component involved, and many retail investors struggle to grasp how the holding period affects the downside protection. The mechanics are often misunderstood.
Instead, I’m focusing on more evergreen strategies. These ETFs don’t promise a set level of downside protection at a specific date. They typically use ongoing hedging techniques, often involving options or other derivatives, to manage risk dynamically and keep volatility in check. Here are two that don’t suck or cost you an arm and a leg.
1. JPMorgan Hedged Equity Laddered Overlay ETF (HELO)
JPMorgan Hedged Equity Laddered Overlay ETF (NYSE:) is what happens when you take the long-running (JHEQX) mutual fund, remove the $1 million minimum, drop the fees a bit, and wrap it in an ETF. Same team, same strategy.
You’re starting with an portfolio and layering on a series of protective put spreads. That means buying puts about 5% out of the money and selling puts 20% out. The goal is to give you a soft cushion during moderate drawdowns, roughly between 5% and 20%. You’ll still feel the first 5%of pain, and you’re on your own after 20%, but anything in between is where the hedge kicks in.
Problem is, buying protection costs money. And selling the 20% out of the money puts doesn’t fully cover the cost of the hedge. So, the portfolio also sells calls to bring in some premium. Those calls are usually 3% to 6% above the market, which caps your upside a bit.
That combination of downside hedge plus capped upside is what makes this work as a risk-adjusted return play, not a growth-at-all-costs strategy. Historical performance lines up with that goal.
Compared to , HELO lagged on returns but had less than half the volatility and a smaller drawdown. It even outperformed a traditional 60/40 portfolio on drawdown and volatility while giving up a bit on total return. The Sharpe ratios are nearly identical, and the beta is way lower at just 0.47.
That means fewer big swings and less stomach-churning during market drops. April 2025’s tariff tantrum was a good stress test across the board, and HELO held up better than both SPY and on the downside capture.
It’s also cheaper and more accessible than JHEQX. HELO charges 0.50% compared to 0.57% for the mutual fund and trades around $63 a share with decent volume. No confusing resets or buffers, just a rules-based options overlay you can stick with. This is boomer candy done right.
2. Simplify Hedged Equity ETF (HEQT)
Simplify Hedged Equity ETF (NYSE:) follows the same basic hedged equity playbook as HELO, but with a few key differences. It starts with a broad S&P 500 exposure, delivered through an iShares ETF, and layers on a put spread collar to manage risk.
That means a slightly out-of-the-money long put, a deeper out-of-the-money short put, and a short call that caps some of the upside. All of this is done using a laddered structure, with options staggered to expire across three consecutive months.
The ladder is what separates this from defined outcome funds. Those products require you to enter at a specific date and hold to maturity. Miss your entry window and the whole structure can break down.
HEQT’s laddered approach smooths that timing risk. You don’t have to worry about rebalancing luck or whether your protection is active when markets drop. It’s always rolling, always live.
Compared to SPY, HEQT underperformed by a couple of points annualized since 2022. But the ride was smoother. Max drawdown was less than half, volatility was under 9%, and the beta came in at just 0.43. HEQT also posted a much better outcome than a 60/40 blend, which saw a –21.5% drawdown and had the lowest risk-adjusted returns of the group.
HEQT is also slightly cheaper than HELO. The gross expense ratio is 0.54%, but the net is 0.44% after waivers. For a fully active options-based hedged equity strategy, that’s solid value.
This isn’t a case of picking a winner though. There’s no reason you can’t hold both HEQT and HELO. You can diversify by process and by team. Even the same strategy, applied slightly differently, can improve outcomes when used together.