Innovator adds MSCI EAFE and EM ‘defined outcome’ ETFs

Jul 2nd, 2019 | By | Category: Alternatives / Multi-Asset

Innovator Capital Management has launched two new ETFs in the US, expanding the firm’s range of ‘defined outcome’ ETFs.

Bruce Bond, Chief Executive Officer of Innovator Capital Management

Bruce Bond, Chief Executive Officer of Innovator Capital Management.

Innovator’s defined outcome ETFs provide exposure to a mainstream equity index while protecting or ‘buffering’ the fund against a pre-determined amount of potential losses.

The ETFs are linked to indices developed by risk management firm Milliman which consists of FLexible EXchange (FLEX) Options – customizable exchange-traded option contracts guaranteed for settlement by the Options Clearing Corporation.

Each fund’s downside protection comes at the expense of a cap on its potential upside over a specified outcome period. The cap for each fund is set at the beginning of the outcome period and is dependent upon market conditions at that time.

The new funds are the Innovator MSCI EAFE Power Buffer ETF (IJUL US) and the Innovator MSCI Emerging Markets Power Buffer ETF (EJUL US). They provide exposure to international developed and emerging market equities, respectively, via exposure to FLEX Options based on the MSCI EAFE and MSCI Emerging Markets indices. Each fund buffers against the first 15% of potential losses.

“Based on advisor feedback, we are moving forward to provide Buffer ETFs with MSCI EAFE and Emerging Markets exposures,” said Bruce Bond, CEO of Innovator ETFs. “We believe the availability of defined outcome ETFs based on these broad benchmark indexes will provide the investment community with better tools to manage international equity risk, and may be particularly useful for investors looking to reduce the home equity bias that exists in many portfolios today.”

Innovator currently offers a series of S&P 500 Buffer funds which the firm plans on expanding to include starting periods relative to each month of the year.

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