As investors look to reduce volatility in their portfolio, the demand for true risk mitigation is growing. Prior to the Innovator Defined Outcome ETFs, investing with downside buffers was only available through bank structured notes or indexed variable annuities.
On the upcoming webcast, Implementing the Only ETFs with Built-In Buffers, Bruce Bond, Co-Founder and CEO, Innovator ETFs; Graham Day, Vice President of Product and Research, Innovator ETFs; and Rusty Vanneman, Chief Investment Officer, CLS Investments, will discuss how the Defined Outcome ETFs work, how they solve many of the problems with existing buffered structures, and how they can be utilized to build better portfolios.
Specifically, Innovator ETFs has come out with a suite of Defined Outcome ETF strategies with a build-in buffer to help investors hedge against risks ahead, depending on one’s level of risk aversion. The Innovator S&P 500 Buffer ETF (Cboe: BOCT) is designed to track the return of the S&P 500 (up to a predetermined Cap) while buffering investors against the first 9% of losses over the Outcome Period, before fees and expenses. The Innovator S&P 500 Power Buffer ETF (Cboe: POCT) is designed to track the return of the S&P 500 (up to a predetermined Cap) while buffering investors against the first 15% of losses over the Outcome Period, before fees and expenses. The Innovator S&P 500 Ultra Buffer ETF (Cboe: UOCT) is designed to track the return of the S&P 500 (up to a predetermined Cap) while buffering investors against a decline of 30% of losses over the Outcome Period, from -5% to -35%, before fees and expenses. Investors are exposed to loss between 0% and 5% and over 35% over the Outcome Period, before fees and expenses.
The July series includes Innovator S&P 500 Buffer ETF (CBOE: BJUL): Designed to track the return of the S&P 500 (up to a predetermined Cap) while buffering investors against the first 9% of losses over the Outcome Period, before fees and expenses. Innovator S&P 500 Power Buffer ETF (CBOE: PJUL): Designed to track the return of the S&P 500 (up to a predetermined Cap) while buffering investors against the first 15% of losses over the Outcome Period, before fees and expenses. Innovator S&P 500 Ultra Buffer ETF (CBOE: UJUL): Designed to track the return of the S&P 500 (up to a predetermined Cap) while buffering investors against a decline of 30% of losses over the Outcome Period, from -5% to -35%, before fees and expenses. Investors are exposed to loss between 0% and 5% and over 35% over the Outcome Period, before fees and expenses.
The January series includes the Innovator S&P 500 Buffer ETF (BJAN), which has a 9% buffer, the Innovator S&P 500 Power Buffer ETF (PJAN), which has a 15% buffer and Innovator S&P 500 Ultra Buffer ETF (UJAN), which has a 30% buffer.
Innovator’s April series includes the Innovator S&P 500 BUFFER ETF (BAPR), Innovator S&P 500 POWER BUFFER ETF (PAPR) and Innovator S&P 500 ULTRA BUFFER ETF (UAPR), which have a 9%, 15% and 30% buffer, respectively.
Lastly, the Innovator S&P 500 Buffer ETF (BJUN), Innovator S&P 500 Power Buffer ETF (PJUN) and Innovator S&P 500 Power Buffer ETF (UJUN) come with a a 9%, 15% and 30% buffer, respectively.
The quarterly series of Defined Outcome ETFs are designed to provide investors an opportunity to purchase shares as close to the beginning of their respective Outcome Periods as possible. Investors can also purchase shares of a previously listed Defined Outcome ETF throughout the entire Outcome Period and obtain a current set of defined outcome parameters.
Knowing the return profile before investing can significantly reduce the uncertainty involved in buying equities, which typically are among the most volatile asset classes in many investors’ portfolios. Innovator Defined Outcome ETFs represent a new type of strategy that can be effective tools for investors to strike a balance between growth and risk mitigation in portfolios, in a systematic and disciplined manner.
Financial advisors who are interested in learning more about alternative investment strategies can register for the Tuesday, July 9 webcast here.