Innovator ETFs has come out with a line of Defined Outcome ETF strategies to help investors capture market gains but better manage downside risk exposure in case of potential volatile swings.
“What they do is give you exposure to an index, whether that be the S&P, the Russell 2000, Nasdaq-100, or even internationally with the MSCI Index; it has a built-in buffer associated with it,” Trevor Terrell, Vice President of Sales, Innovator ETFs, said at the Inside ETFs conference.
For example, its 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.
The April series joins Innovator’s other Defined Outcome ETFs, including the October series of Innovator S&P 500 Buffer ETF (Cboe: BOCT), Innovator S&P 500 Power Buffer ETF (Cboe: POCT) and Innovator S&P 500 Ultra Buffer ETF (Cboe: UOCT).
The July series includes Innovator S&P 500 Buffer ETF (CBOE: BJUL), Innovator S&P 500 Power Buffer ETF (CBOE: PJUL), and Innovator S&P 500 Ultra Buffer ETF (CBOE: UJUL).
The January series includes the Innovator S&P 500 Buffer ETF (BJAN), Innovator S&P 500 Power Buffer ETF (PJAN), and Innovator S&P 500 Ultra Buffer ETF (UJAN).
Finally, the June series includes 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).
Additionally, the Innovator MSCI Emerging Markets Power Buffer ETF (EJUL) and Innovator MSCI EAFE Power Buffer ETF (IJUL) provide exposure to international emerging and developed markets up to a cap with downside buffer levels of 15% over a one-year outcome period.
The 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.
“It’s market exposure with a built-in buffer,” Terrell added.
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.
Watch Trevor Terrell Discuss The Capture Of Market Gains:
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