How to Potentially Accelerate Your Equity Gains
Faced with the prospect of lower returns, many investors could be looking for ways to enhance their upside, but some traditional leveraged funds can mean shouldering added risk. However, a new class of ETFs offers investors the potential to magnify equity gains 2x or 3x, up to a cap, without magnifying their downside exposure at the same time, although investors will experience the same loss as the reference asset.
In this upcoming webcast, Innovator ETFs and ETF Trends will look under the hood of the new Accelerated ETFs strategy, which can help investors bolster their equity upside potential without relying on leverage.
Lara Crigger, Managing Editor of ETF Trends and ETF Database, will moderate a discussion on:
- An overview of where the current bull market heads next
- Steps investors can take to prepare for a future of potentially low to moderate returns
- A look at how the Accelerated ETFs are different than traditional leveraged funds
- How the Accelerated ETF strategy can fit into a diversified portfolio
NOT accepted for one hour of CFP/CIMA CE credit for live and on-demand attendees
CFA Institute members are encouraged to self-document their continuing professional development activities in their online CE tracker.
Wes Matthews, CFADirector of Portfolio Solutions
Milliman Financial Risk Management
Graham Day, CFAVice President of Product and Research
Lara CriggerManaging Editor
ETF Trends and ETF Database
For financial professional use only.
If the Outcome Period has begun and the Fund has experienced a positive return, an investor purchasing shares may be subject to losses that exceed any losses of the Underlying ETF for the remainder of the Outcome Period and may have diminished or no ability to experience further Accelerated Return, therefore exposing the investor to greater downside risks.
The funds only seek to provide their investment objective, which is not guaranteed, over the course of an entire outcome period. Investors who purchase shares after or sell shares before the end of an outcome period will experience very different outcomes than the funds seek to provide.
The Funds are designed to provide point-to-point exposure to the price return of a reference asset via a basket of Flex Options. As a result, the ETFs are not expected to move directly in line with the reference asset during the interim period. Additionally, FLEX Options may be less liquid than standard options. In a less liquid market for the FLEX Options, the Fund may have difficulty closing out certain FLEX Options positions at desired times and prices.
Fund shareholders are subject to an upside return cap (the Cap) that represents the maximum percentage return an investor can achieve from an investment in the funds’ for the Outcome Period, before fees and expenses. If the Outcome Period has begun and the Fund has increased in value to a level near to the Cap, an investor purchasing at that price has little or no ability to achieve gains but remains vulnerable to downside risks. Additionally, the Cap may rise or fall from one Outcome Period to the next. The Cap, and the Fund’s position relative to it, should be considered before investing in the Fund. The Funds’ website, www.innovatoretfs.com, provides important Fund information as well information relating to the potential outcomes of an investment in a Fund on a daily basis.
The Funds only seek to provide shareholders that hold shares for the entire Outcome Period with their respective buffer level against reference asset losses during the Outcome Period. With XBJL, you will bear all reference asset losses exceeding 9%. Depending upon market conditions at the time of purchase, a shareholder that purchases shares after the Outcome Period has begun may also lose their entire investment. For instance, if the Outcome Period has begun and the Fund has decreased in value beyond the pre-determined buffer, an investor purchasing shares at that price may not benefit from the buffer. Similarly, if the Outcome Period has begun and the Fund has increased in value, an investor purchasing shares at that price may not benefit from the buffer until the Fund’s value has decreased to its value at the commencement of the Outcome Period.
The Funds’ investment objectives, risks, charges and expenses should be considered carefully before investing. The prospectus contains this and other important information, and it may be obtained at innovatoretfs.com. Read it carefully before investing.
Innovator ETFs are distributed by Foreside Fund Services, LLC.