UJUL uses options in an effort to moderate losses on the S&P 500 over a one-year period starting each July. The fund foregoes some upside return as well as the S&P 500s dividend component, because the options are written on the price (not total) return version of the index. In exchange for buffering losses between -5% and -30% of the S&P 500, investors forego upside participation above a certain threshold, which is reset annually.
