Innovator rolls out January series of defined outcome ETFs

Jan 2nd, 2020 | By | Category: Alternatives / Multi-Asset

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

Innovator rolls out January series of defined outcome ETFs

Defined outcome ETFs provide exposure to mainstream equity indices while protecting the funds against a pre-determined amount of potential losses.

Innovator’s defined outcome ETFs provide exposure to mainstream equity indices while protecting, or ‘buffering’, the funds against a pre-determined amount of potential losses over a specific outcome period.

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.

The downside protection comes at the expense of a cap on the potential upside of each ETF over the 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 funds

The new ETFs are all so-called “Power Buffer” funds which provide protection against the first 15% of losses over a period of approximately one year. They are based on US equity (Nasdaq 100 and Russell 2000), global developed (MSCI EAFE), and emerging markets (MSCI Emerging Markets) indices.

The Innovator Nasdaq-100 Power Buffer ETF — January (NJAN US) has an upside cap of 9.42% before expenses. The fund has been listed on Cboe BZX Exchange and comes with an expense ratio of 0.79%.

The Innovator Russell 2000 Power Buffer ETF — January (KJAN US) has an upside cap of 8.98% before expenses. The fund has also been listed on Cboe BZX and comes with an expense ratio of 0.79%.

The Innovator MSCI EAFE Power Buffer ETF — January (IJAN US) has an upside cap of 10.08% before expenses. The fund has been listed on NYSE Arca and comes with an expense ratio of 0.85%.

The Innovator MSCI Emerging Markets Power Buffer ETF — January (EJAN US) has an upside cap of 12.78% before expenses. The fund has also been listed on NYSE Arca and comes with an expense ratio of 0.89%.

Innovator also currently offers Nasdaq 100 and Russell 2000 Power Buffer ETFs with outcome periods ending in October 2020, as well as MSCI EAFE and MSCI Emerging Markets Power Buffer ETFs with outcome periods ending in July 2020.

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