Sept. Defined Outcome ETFs Debut

Today Innovator ETFs rolled out another trio of defined outcome funds. The three new funds offer returns within a set range tied to the S&P 500 Index, and will reset every September. They are as follows:

• Innovator S&P 500 Power Buffer ETF - September (PSEP)
• Innovator S&P 500 Buffer ETF - September (BSEP)
• Innovator S&P 500 Ultra Buffer ETF - September (USEP)

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

Caps & Buffers

All three funds are tied to the return of the S&P 500 Index, but with limitations. BSEP offers protection against the first 9% of losses in the index starting Sept. 3, but caps the returns realized by investors at 14.07% before expenses and 13.28% after expenses.

Similarly, PSEP protects against the first 15% of losses in the S&P 500, capping positive returns at 9.39% before expenses and 8.60% after expenses.

Finally, USEP protects against losses of 5% or more, up to 35%. It caps returns at 8.06% before expenses and 7.27% after expenses.

Each of the three ETFs will cover the period Sept. 3, 2019 through Oct. 31, 2020 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 that shows what that altered expected outcome is based on the purchase price.

Innovator has been expanding its family of defined outcome ETFs at a rapid pace. Initially, there had been a trio for each quarter, but demand caused the firm to begin launching a trio for each month. In addition, the firm has begun to roll out similar funds covering the non-U.S. developed and emerging markets.

Contact Heather Bell at [email protected]