The only ETFs with built-in buffers on the S&P 500, MSCI EAFE and MSCI Emerging Markets Indexes
CHICAGO, IL / ACCESSWIRE / June 25, 2019 /
Innovator Capital Management, LLC (Innovator) announced today the anticipated upside cap ranges and return profiles for the July Series of Innovator S&P 500, MSCI EAFE and MSCI Emerging Markets Buffer ETFs, which will go into effect July 1, 2019 for the next one year outcome period.
The Innovator S&P 500 Buffer ETFsm suite seeks to provide investors with exposure to the S&P 500 Price Return Index (S&P 500) up to a Cap, with downside buffer levels of 9%, 15%, or 30% over an Outcome Period of approximately one year. The ETFs reset annually and can be held indefinitely. Innovator S&P 500 Buffer ETFs, with over $931 million in AUM as of June 24, 2019, are among the fastest growing new category of ETFs in the market today.
Anticipated return profiles for the July Series of Innovator S&P 500,
MSCI EAFE and MSCI Emerging Markets Buffer ETFs, as of
6/24/19
Ticker
Name
Buffer Level
Cap range*
Outcome Period
BJUL
Innovator S&P 500
Buffer ETF
9.00%
12.65 – 15.90% (gross)
11.86 – 15.11% (net of management fee)
12 months
7/1/19 – 6/30/20
PJUL
Innovator S&P 500
Power Buffer ETF
15.00%
7.60 – 10.15% (gross)
6.81 – 9.36% (net of management fee)
12 months
7/1/19 – 6/30/20
UJUL
Innovator S&P 500
Ultra Buffer ETF
30.00%
(-5% to -35%)
7.38 – 9.39% (gross)
6.59 – 8.60% (net of management fee)
12 months
7/1/19 – 6/30/20
EJUL
Innovator MSCI Emerging Markets
Power Buffer ETF
15.00%
8.10 – 14.59% (gross)
7.21 – 13.70% (net of management fee)
12 months
7/1/19 – 6/30/20
IJUL
Innovator MSCI EAFE Power Buffer ETF
15.00%
7.33 – 12.00% (gross)
6.48 – 11.15% (net of management fee)
12 months
7/1/19 – 6/30/20
* The Cap Ranges above are based on the highest and lowest Cap as illustrated by the Funds’ strategy from 5/23/19 – 6/21/19 and are shown gross and net of the S&P 500 Buffer ETFs’ 0.79% management fee, EJUL’s 0.89% management fee, and IJUL’s 0.85% 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. Periods of high market volatility could result in higher caps, and lower volatility could result in lower caps. As a result, the Cap set by each Fund may be higher or lower than the Cap Range. “Cap” refers to the maximum potential return, before fees and expenses and any shareholder transaction fees and any extraordinary expenses, if held over the full Outcome Period. “Buffer” refers to the amount of downside protection the fund seeks to provide, before fees and expenses, over the full Outcome Period. Outcome Period is the intended length of time over which the defined outcomes are sought.Upon fund launch, the Caps can be found on a daily basis via www.innovatoretfs.com. EJUL and IJUL are not yet available for investment.
The Innovator MSCI Emerging Markets Power Buffer and Innovator MSCI EAFE Power Buffer ETFs seek to provide exposure to the price return of their respective indexes up to a Cap, with a downside buffer level of 15% over an Outcome Period of approximately one year. The ETFs reset annually and can be held indefinitely.
Upcoming Webinars
Continuing educational efforts around Defined Outcome ETF investing, Innovator will be hosting its next webinar, titled, MSCI Emerging Markets and MSCI EAFE ETFs with Built-In Downside Buffers and Upside, to a Cap, on June 25, 2019 at 1pm ET. Additional information including event registration is available using the following link: http://www.innovatoretfs.com/webinars.
The
Funds have characteristics unlike many other traditional investment products
and may not be suitable for all investors. For more information regarding
whether an investment in the Fund is right for you, please see “Investor
Suitability” in the prospectus.
The Innovator
Defined Outcome Suite of ETFs
MSCI Emerging Markets:
Innovator
MSCI Emerging Markets Power Buffer ETF (NYSE: EJUL): Designed to track the price returns of the MSCI Emerging Markets Index (up to a predetermined Cap) while buffering investors against the first 15% of losses over the Outcome Period, before fees and expenses.
MSCI EAFE:
Innovator
MSCI EAFE Power Buffer ETF (NYSE: IJUL): Designed to track the price returns of the MSCI EAFE Index (up to a predetermined Cap) while buffering investors against the first 15% of losses over the Outcome Period, before fees and expenses.
S&P 500 Buffer ETFs:
Innovator S&P 500 Buffer ETFs (Cboe: BJUN, BAPR, BJUL, BOCT, BJAN): Designed to track the return of the S&P 500 (up to a predetermined Cap) while buffering investors against the first 9% of losses over the Outcome Period, before fees and expenses.
Innovator S&P 500 Power Buffer ETFs
(Cboe: PJUN, PAPR, PJUL, POCT, PJAN): Designed to track the return of the S&P 500 (up to a predetermined Cap) while buffering investors against the first 15% of losses over the Outcome Period, before fees and expenses.
Innovator S&P 500 Ultra Buffer ETFs
(Cboe: UJUN, UAPR, UJUL, UOCT, UJAN): Designed to track the return of the S&P 500 (up to a predetermined Cap) while buffering investors against a decline of 30% of losses over the Outcome Period, from -5% to -35%, before fees and expenses. Investors are exposed to loss between 0% and 5% and over 35% over the Outcome Period, before fees and expenses.
About Innovator Defined Outcome ETFs
Each Innovator Defined Outcome ETFSM seeks to provide a defined exposure to a broad market index (such as the S&P 500, MSCI EAFE or MSCI EM) where the downside buffer level, upside growth potential to a Cap, and Outcome Period are all known, prior to investing.
Innovator recently began expanding its suite of S&P 500 Buffer ETFs into a monthly series to provide investors more opportunities to purchase shares as close to the beginning of their respective Outcome Periods as possible. Investors can purchase shares of a previously listed Defined Outcome Buffer ETF throughout the entire Outcome Period, obtaining a current set of defined outcome parameters, which are disclosed daily through a web tool available at: http://innovatoretfs.com/define/.
Innovator is focused on delivering defined outcome based solutions inside the benefit-rich ETF wrapper, retaining many of the features that have contributed to the success of structured products
1 (e.g., downside buffer levels, upside participation, defined outcome parameters), but with the added benefits of transparency, liquidity and lower costs afforded by the ETF structure.
Interim Period Shareholders
Unlike structured notes, which offer limited liquidity, Innovator Defined Outcome ETFs trade throughout the day on an exchange, like a stock. As a result, investors purchasing shares of a Fund after its launch date may achieve a different payoff profile than those who entered the Fund on day one. Innovator recognizes this as a benefit of the Funds and provides a web-based tool that allows investors to know, in real-time throughout the trading day, their potential defined outcome return profile before they invest, based on the current ETF price and the Outcome Period remaining. Innovator’s web tool can be accessed at http://www.innovatoretfs.com/define.
ETF
Construction
Each Fund will hold a portfolio of custom exchange-traded FLEX Options that have varying strike prices (the price at which the option purchaser may buy or sell the security, at the expiration date), and the same expiration date (approximately one year). The layering of these FLEX Options with varying strike prices provides the mechanism for producing a Fund’s desired outcome (i.e. Cap or buffer). Each Fund intends to roll options components annually, on the last business day of the month associated with each Fund.
The ETFs are subadvised by Milliman Financial Risk Management LLC (Milliman FRM), a global leader in financial risk management. Milliman FRM was also instrumental in the design of the Cboe S&P 500 Target Outcome Indexes, which the Innovator Defined Outcome ETFs are benchmarked against.
Although
each Fund seeks to achieve the defined outcomes stated in its investment
objective, there is no guarantee that it will do so. The returns that the Funds
seek to provide do not include the costs associated with purchasing shares of
the Fund and certain expenses incurred by the Fund.
About Innovator Capital Management, LLC
Innovator Capital Management, LLC is an SEC registered investment advisor (RIA) based in Wheaton, IL. Formed in 2014, the firm is currently headed by ETF visionaries Bruce Bond and John Southard, founders of one of the largest ETF providers in the world. Innovation is our hallmark and acts as a guide to our company principles. Innovator is committed to helping investors better control their financial outcomes by providing investment opportunities they never considered or thought possible. For additional information, visit www.innovatoretfs.com.
About Milliman Financial Risk Management LLC
Milliman Financial Risk Management LLC (Milliman FRM) is a global leader in financial risk management to the retirement industry, providing investment advisory, hedging, and consulting services on over $147.6 billion in global assets as of March 31, 2019. For more information about Milliman FRM, visit www.Milliman.com/FRM.
Media
Contact
Bill Conboy
+1 (303) 415-2290
bill@bccapitalpartners.com
1 Structured notes and structured annuities are financial instruments designed and created to afford investors exposure to an underlying asset through a derivative contract. It is important to note that these ETFs are not structured notes or structured annuities.
Investing
involves risks. The Funds face numerous market trading risks, including active markets risk, authorized participation concentration risk, buffered loss risk, Cap change risk, capped upside return risk, correlation risk, FLEX Option counterparty risk, cyber security risk, fluctuation of net asset value risk, investment objective risk, limitations of intraday indicative value risk, liquidity risk, management risk, market maker risk, market risk, non-diversification risk, operation risk, options risk, Outcome Period risk, tax risk, trading issues risk, upside participation risk and valuation risk. Unlike mutual funds, the Funds may trade at a premium or discount to their net asset value. ETFs are bought and sold at market price and not individually redeemed from the Fund. Brokerage commissions will reduce returns.
The outcomes that a Fund seeks to provide may only be realized if you are holding shares on the first day of the Outcome Period and continue to hold them on the last day of the Outcome Period, approximately one year. If you purchase shares after the Outcome Period has begun or sell shares prior to the Outcome Period’s conclusion, you may experience very different investment returns from those that a Fund seeks to provide.
These Funds are designed to provide point-to-point exposure to the price return of the S&P 500, MSCI Emerging Markets and MSCI EAFE indexes via a basket of FLEX Options. As a result, the ETFs are not expected to move directly in line with the indexes during the interim period.
FLEX
Options Risk. The Fund will utilize FLEX Options issued and guaranteed for settlement by the Options Clearing Corporation (OCC). FLEX options, are non-standard options that allow both the writer and purchaser to negotiate various terms. Terms that are negotiable include the exercise style, strike price, expiration date, as well as other feature. The Fund bears the risk that the OCC will be unable or unwilling to perform its obligations under the FLEX Options contracts. In the unlikely event that the OCC becomes insolvent or is otherwise unable to meet its settlement obligations, the Fund could suffer significant losses. Additionally, FLEX Options may be less liquid than certain other securities such as standardized options. In less liquid market for the FLEX Options, the Fund may have difficulty closing out certain FLEX Options positions at desired times and prices. The values of FLEX Options do not increase or decrease at the same rate as the reference asset and may vary due to factors other than the price of reference asset.
Fund
shareholders are subject to an upside return cap (the “Cap”) that
represents the maximum percentage return an investor can achieve from an
investment in the funds’ for the Outcome Period, before fees and expenses. If
the Outcome Period has begun and the Fund has increased in value to a level
near to the Cap, an investor purchasing at that price has little or no ability
to achieve gains but remains vulnerable to downside risks. Additionally, the
Cap may rise or fall from one Outcome Period to the next. The Cap, and the
Fund’s position relative to it, should be considered before investing in the
Fund. The Funds’ website, www.innovatoretfs.com, provides important Fund
information as well information relating to the potential outcomes of an
investment in a Fund on a daily basis.
The
Funds only seek to provide shareholders that hold shares for the entire Outcome
Period with their respective buffer level against S&P 500, MSCI Emerging Markets and MSCI EAFE Price Index
losses during the Outcome Period. You will bear all S&P 500 Price
Index losses exceeding 9%, 15%, and 30%,
respectively, and bear all MSCI Emerging Markets and MSCI EAFE Price Index losses exceeding 15% respectively. Depending
upon market conditions at the time of purchase, a shareholder that purchases
shares after the Outcome Period has begun may also lose their entire
investment. For instance, if the Outcome Period has begun and the Fund has
decreased in value beyond the pre-determined 9% buffer, an investor purchasing
shares at that price may not benefit from the buffer. Similarly, if the Outcome
Period has begun and the Fund has increased in value, an investor purchasing
shares at that price may not benefit from the buffer until the Fund’s value has
decreased to its value at the commencement of the Outcome Period.
The
ETFs referred to herein is not sponsored, endorsed, or promoted by MSCI Inc. or
based upon the MSCI EAFE and MSCI Emerging Markets Indexes. MSCI Inc. bears no
liability with respect to the ETFs.
MSCI, MSCI EAFE, and MSCI Emerging Markets are trademarks or service marks of MSCI Inc. or its affiliates (“Marks”) and are used hereto subject to license from MSCI. All goodwill and use of Marks inures to the benefit of MSCI and its affiliates. No other use of the Marks is permitted without a license from MSCI.
Cboe Global Markets, Inc., and its affiliates do not recommend or make any representation as to possible Benefits from any securities, futures or investments, or third-party products or services. Cboe Global Markets, Inc., is not affiliated with S&P DJI, Milliman, or Innovator Capital Management. Investors should undertake their own due diligence regarding their securities, futures and investment practices.
Cboe Global Markets, Inc., and its affiliates make no warranty, expressed or implied, including, without limitation, any warranties as of merchantability, fitness for a particular purpose, accuracy, completeness or timeliness, or as to the results to be obtained by recipients of the products.
Each Fund’s investment objectives, risks, charges and expenses should be considered before investing. The prospectus contains this and other important information, and may be obtained at www.innovatoretfs.com or 800.208.5212. Read it carefully before investing.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS COMMUNICATION SHALL NOT CONSTITUTE AN OFFER TO BUY OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER SECURITIES LAWS OF ANY SUCH STATE.
AN INDICATION OF INTEREST IN RESPONSE TO THIS ADVERTISEMENT WILL INVOLVE NO OBLIGATION OR COMMITMENT OF ANY KIND.
Innovator ETFs are distributed by Foreside Fund Services, LLC.
Copyright © 2019 Innovator Capital Management, LLC.
800.208.5212
SOURCE: Innovator
ReleaseID: 549559
