Specifically, the underlying index incorporates an algorithm that analyzes the following trends for each stock: 1. The length of time from the establishment of the base to the current date. 2. The difference in price between the base and the lowest subsequent price for the stock. 3. The percentage difference between the current price and the high at the start of the base. 4. The percentage difference in price from the stock’s lowest price subsequent to the establishment of the base and its current price. 5. The percentage change in the stock’s price in each of the last three weeks.
Furthermore, the index utilizes a Relative Price Strength Rating based on Earnings Per Share Rating, Relative Price Strength Rating, Industry Group Relative Strength Rating, Sales Margins Return on Equity (SMR) Rating, Accumulation Distribution Rating and Percentage Deviation from 52-week Price High.
“While many ETFs focus on stocks with established momentum, the Innovator IBD Breakout Opportunities ETF (BOUT) seeks to identify companies before they have established momentum, and may offer investors unique exposure that can be utilized as an alternative or complement to momentum ETFs,” Bruce Bond, Chief Executive Officer of Innovator Capital Management, said in a note. “Identifying stock breakouts from a sound chart pattern is a good way to improve the timing for investing in growth companies, and to participate in potential big stock market winners.”
For more information on new fund products, visit our new ETFs category.