Innovator Capital Management, the creator of the Defined Outcome ETFs, announced the listing of the Innovator Equity Managed Floor ETF (NYSE Arca: SFLR) on the New York Stock Exchange. SFLR seeks to deliver to investors U.S. equity upside and income potential while limiting a shareholder’s potential for maximum loss through a sophisticated options overlay.
SFLR’s portfolio will consist predominantly of S&P 500 Index stocks, with the subadvisor implementing a representative sampling strategy to efficiently gain exposure to returns of the referenced index. As part of the equity sampling methodology, SFLR will seek to provide investment income, distributing dividends from the portfolio’s stock holdings back to fund shareholders.
Through a custom-developed, laddered options strategy, SFLR will target a maximum loss of roughly 10% on a rolling 12-month basis. The laddered options strategy employed by SFLR seeks to maximize upside potential. This should allow investors to participate in high-returning environments more fully for the fund’s large-cap domestic stock benchmark.
Parametric Portfolio Associates will subadvise the fund.
“We’re very excited to be working with Parametric to list the Innovator Equity Managed Floor ETF, a core portfolio product that we’ve been brainstorming for some time,” said Bruce Bond, co-founder and CEO of Innovator ETFs, in a news release. “SFLR is constructed with stocks and an intelligent options overlay to help investors limit equity market drawdowns while gaining exposure to equities’ dividend income streams as well as their upside potential during strong positive market environments.”
SFLR will not offer a defined outcome with an exact level of downside protection or a cap or limit on the upside over a specific amount of time. Its prospectus can be found online.
“Innovator has been a pioneer in the ETF industry providing easy-to-use tools for advisors to support clients with risk aversion preferences,” said Todd Rosenbluth, head of research at VettaFi. “Their ETFs have quickly gathered assets early in the product’s trading history.”
SFLR will carry an annual expense ratio of 0.89%.
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