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Innovator Set to Sell ETFs that Protect Against Losses

Traders Magazine Online News, August 10, 2018

John D'Antona Jr.

Innovator Capital Management, LLC (Innovator) today announced the anticipated listing of the Innovator S&P 500 Defined Outcome ETFs – July Series on Cboe on August 8, 2018. The Innovator Defined Outcome ETFs will seek to offer investors exposure to the S&P 500 Price Return Index (S&P 500) to a Cap, with downside protection levels (or “buffers”) of 10%, 15%, or 30% over an Outcome Period of approximately one year, at which point each ETF will reset. This is the first time investors will be able to access structured outcomes through the ETF vehicle. The result is an efficient product suite that seeks the following benefits:

  • Defined downside protection levels
  • Exposures to S&P 500 upside performance
  • Low cost, flexible, liquid, and transparent
  • No credit risk
  • Resets annually and can be held indefinitely

“Every once in a while a product comes along with the potential to change the way we invest. Today we are pleased to announce the arrival of one of those products,” said Bruce Bond, CEO of Innovator ETFs. “Through the Defined Outcome ETFs, we believe that we have solved a key challenge for millions of Americans by providing the ability for people to stay invested in the market, knowing they have upside growth potential and downside protection levels. This is truly innovative, and another first for the ETF industry.”

Innovator S&P 500 Defined Outcome ETFs

Each Innovator S&P 500 Defined Outcome ETF seeks to provide investors defined exposure to the S&P 500, where the downside protection level, upside growth potential to a Cap, and Outcome Period are all known, prior to investing. The Fund will invest substantially all of its assets in FLexible EXchange® (FLEX®) Options on the S&P 500. FLEX Options are customizable exchange-traded option contracts guaranteed for settlement by the Options Clearing Corporation.

The anticipated return profiles for the July Series of Innovator Defined Outcome ETFs are listed below:

* The Cap Range is based on the highest and lowest Cap as illustrated by each Fund’s strategy over the past 10 trading days and is shown gross and net of the 0.79% management fee. The actual Cap for each Fund will be set at the beginning of the Outcome Period, and is dependent upon market conditions at that time. As a result, the Cap set by each Fund may be higher or lower than the Cap Range. Upon Fund launch, Innovator will provide important Fund information related to the potential outcomes of an investment in a Fund (including the Cap) on a daily basis via its website ( “Cap” refers to the maximum potential return, before fees and expenses, if held over the full Outcome Period. “Buffer” refers to the amount of downside protection, before fees and expenses, over the full Outcome Period. Outcome Periodis the intended length of time over which the defined outcomes are sought.

** The initial Outcome Period for the Innovator Defined Outcome July Series ETFs is less than 12 months to allow the period to conclude on June 30, 2019, at which point the Funds will resume their respective anticipated 12-month Outcome Periods, each beginning on July 1st.

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 10% of losses over the Outcome Period, before fees and expenses.

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