Today Innovator ETFs launched the final trio in its series of ETFs offering buffered exposure to the S&P 500 Index. The three funds provide limited exposure to the performance of the S&P 500 Price Index for one year before resetting again on April 1, 2020.
- Innovator S&P 500 Buffer ETF – April (BAPR)
- Innovator S&P 500 Power Buffer ETF – April (PAPR)
- Innovator S&P 500 Ultra Buffer ETF – April (UAPR)
Each of the three funds comes with an expense ratio of 0.79% and lists on Cboe Global Markets, the parent company of ETF.com.
How They Work
With the inclusion of this most recent rollout, Innovator’s Defined Outcome ETF family provides quarterly versions of three strategies. The “Buffer” strategy provides limited upside, but protects against the first 9% of losses, so that investors do not lose any money unless the index declines more than 9%. The “Power Buffer” strategy provides protection against losses in the index up to 15%, while the “Ultra Buffer” strategy protects against losses greater than 5% but less than 35%.
The funds hold actively managed portfolios of FLexible EXchange Options (FLEX) on the S&P 500 Price Index. The upside cap for each fund is determined at the start of each outcome period based on market conditions at the time. Investors buying a fund after its reset date will experience returns different from what they would if they purchased it on the reset date, and Innovator provides a tool on its website so investors can see each fund’s performance relative to its cap and buffer.
BAPR has an upside cap of 16.45% net of management and other fees. Similarly, PAPR’s upside cap after fees is 9.82%, and UAPR’s is 9.78%.
The three funds complete Innovator’s offering tied to the S&P 500, but the firm has filed with the SEC to launch similar products tied to the MSCI Emerging Markets Investable Market Index, the MSCI EAFE Investable Market Index, the Nasdaq-100 Index and the Russell 2000 Index.
The other ETFs in Innovator’s Defined Outcome lineup include three other trios of funds offering the exact same downside protection, but resetting their “Outcome Period” on different dates—Jan. 1, July 1 and Oct. 1.
Contact Heather Bell at [email protected]