After getting burned over 2018, more cautious investors may be looking for a defensive investment strategy that could help provide a buffer in case of another sudden pullback ahead, especially with the economy heading toward the late business cycle.
On the upcoming webcast, How to Own the S&P 500 with Built-In Buffers, Bruce Bond, Co-Founder and CEO, Innovator ETFs; Graham Day, Vice President of Product and Research, Innovator ETFs; and Matt Kaufman, Principal, Milliman Financial Risk Management, will discuss one of the fastest growing segments of the ETF world and consider a revolutionary alternative strategy that could help investors keep exposure to the growth potential of U.S. equities.
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.
Lastly, the more recently launched 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 ETF is set to launch its April series on April 1.
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 strategies to better manage market risks can register for the Monday, April 1 webcast here.