On Monday, Innovator Capital Management, LLC (Innovator) announced the anticipated upside cap ranges and return profiles for the June series of the S&P 500 Buffer ETFs – Innovator S&P 500 Buffer ETF – June (BJUN), Innovator S&P 500 Power Buffer ETF – June (PJUN), and Innovator S&P 500 Ultra Buffer ETF – June (UJUN) – which are scheduled to complete their second outcome period and reset at the end of the month.
The 36 total ETFs in the flagship S&P 500 Buffer ETF lineup seek to provide investors with upside participation, to a cap, in large cap U.S. stocks via options on the S&P 500 with buffers against market losses of 9%, 15%, or 30% over one-year periods.
Anticipated return profiles for the Innovator S&P 500 Buffer ETFs™ – June Series, as of 5/20/2021
|Ticker||Name||Buffer Level||Est. Cap Range*||Outcome Period|
|BJUN||Innovator S&P 500|
Buffer ETF™ – June
|9.00%||12.82 – 14.87%||12 months|
6/01/21 – 5/31/22
|PJUN||Innovator S&P 500|
Power Buffer ETF™ – June
|15.00%||7.94 – 9.29%||12 months|
6/01/21 – 5/31/22
|UJUN||Innovator S&P 500|
Ultra Buffer ETF™ – June
(-5% to -35%)
|6.42 – 6.84%||12 months|
6/01/21 – 5/31/22
* The Estimated Cap Ranges above are based on the highest and lowest Cap as illustrated by the Funds’ strategy from 4/22/2021-5/20/2021 and are shown gross of the 0.79% management fee. The actual Cap for each Fund will be set at the beginning of the Outcome Period and is dependent upon market conditions at that time. Periods of high market volatility could result in higher caps, and lower volatility could result in lower caps. As a result, the Cap set by each Fund may be higher or lower than the Estimated Cap Range. “Cap” refers to the maximum potential return, before fees and expenses and any shareholder transaction fees and any extraordinary expenses, if held over the full Outcome Period. “Buffer” refers to the amount of downside protection the fund seeks to provide, before fees and expenses, over the full Outcome Period. Outcome Period is the intended length of time over which the defined outcomes are sought. Upon commencement of the Outcome Period, the Caps can be found daily via www.innovatoretfs.com.
The June series of Innovator S&P 500 Buffer ETFs (BJUN; PJUN; UJUN) currently have a remaining outcome period of one week. Investors who purchase before the rebalance will be fully invested for the next outcome period, obtaining new upside caps and downside buffers for the year commencing June 1, 2021. The ETFs reset annually and can be held indefinitely.
Innovator Defined Outcome ETFs – Benefits to Advisors
- Pioneer and creator of Defined Outcome ETFs, with 65 ETFs and over $4.4 billion AUM across the fund family.
- Tax-efficient exposure to five broad equity benchmarks (S&P 500, NASDAQ-100, Russell 2000, MSCI EAFE, MSCI EM); the 20+ Year U.S. Treasury Market; Stacker ETFs, the world’s first ETFs to offer a “stacked” exposure to two or three benchmark equity index ETFs on the upside, to a cap, with downside exposure to the S&P 500 only; and Accelerated ETFs, the world’s first ETFs to seek to offer a multiple of the upside return of a reference asset, up to a cap, with approximately single exposure on the downside.
- Monthly issuance on the S&P 500 with three buffer levels (9,15, or 30%)
Innovator’s Defined Outcome ETFs are the subject of a patent application filed with the U.S. Patent and Trademark Office.
In 2021, starting with the January series, Innovator will be transitioning reference assets of the underlying options within its Defined Outcome Equity Buffer ETFs to achieve the stated outcomes with ETF-based or fund-based options rather than index-based options. Innovator’s Equity Buffer ETFs have traditionally used index-based options, while the Defined Outcome Bond ETFs and Stacker ETFs have been constructed using fund-based options.
This change is intended to streamline market-making and increase the operational efficiencies of the tax-efficient Buffer ETFs and will not materially impact shareholders. The Buffer ETFs will continue to draw from the same deeply liquid options markets pools that underpin the strategies, the level of the upside caps achieved should be unaffected, and no tax event will be triggered given the options can be transferred in-kind.
“These operational changes are intended to harness the power and efficiencies of the ETF wrapper even further for the benefit of our Defined Outcome Buffer ETF investors,” stated Bruce Bond, CEO of Innovator ETFs.
For more information, visit innovatoretfs.com.