3rd Buffered ETF Trio Debuts

Today Innovator ETFs rolled out another trio of defined-outcome funds that investors can use in risk management strategies. The three new funds offer returns within a set range tied to the return of the S&P 500 Price Return Index (rather than the total return version), and will reset every January. They are as follows:

• Innovator S&P 500 Power Buffer ETF - January (PJAN)
• Innovator S&P 500 Buffer ETF - January   (BJAN)
• Innovator S&P 500 Ultra Buffer ETF - January (UJAN)

Each ETF lists on Cboe Global Markets, the parent company of ETF.com, and comes with an expense ratio of 0.79%.

All three funds are tied to the return of the S&P 500 Index, but with limitations. PJAN offers protection against the first 15% of losses in the index starting Jan. 1, but caps the returns realized by investors at 13.11% after expenses. 

Similarly, BJAN protects against the first 9% of losses in the S&P 500, with an upside cap of 21.51% after expenses. 

Finally, UJAN protects against losses of 5% or more, up to 35%, with an upside cap of 11.21% after expenses. Each of the three ETFs will cover the period Jan. 1, 2019 through Dec. 31, 2019 before resetting. 

Investors not purchasing the funds on day one of their covered time period can expect a different outcome, and the Innovator website provides a chart showing what that altered expected outcome is based on the purchase price.

Details

The ETFs primarily hold S&P 500 FLexible EXchange Options (FLEX Options), and while they are actively managed, they are benchmarked against the CBOE S&P 500 Defined Outcome Index Series.

The trio of new ETFs is part of a series in which three ETFs are expected to be launched each quarter until all four quarters are covered.

Innovator has previously rolled out two sets of funds, one that launched in the summer, and includes the following:

• Innovator S&P 500 Power Buffer ETF – July (PJUL)
• Innovator S&P 500 Buffer ETF – July (BJUL)
• Innovator S&P 500 Ultra Buffer ETF – July (UJUL)

The firm also rolled out a trio of funds in the fall that included the following:

• Innovator S&P 500 Power Buffer ETF - October (POCT)
• Innovator S&P 500 Buffer ETF - October (BOCT)
• Innovator S&P 500 Ultra Buffer ETF - October (UOCT)

The final three funds in the Innovators Buffer family can likely be expected to launch on or around April 1.

Contact Heather Bell at [email protected]