CHICAGO, Oct. 02, 2023 (GLOBE NEWSWIRE) -- Innovator Capital Management, LLC (Innovator), pioneer and provider of the largest lineup of Defined Outcome ETFs, today announced the launch of eight Defined Outcome ETFs, expanding the firm’s existing suite of ETFs. The strategies include two Premium Income Buffer ETFs, four Premium Income Barrier ETFs, and two Quarterly Buffer ETFs.
Launching in a quarter marked by equity market uncertainty and elevated bond market volatility, the newly launched ETFs are designed to provide investors with greater customization in pursuing yield and mitigating downside risks.
New Quarterly Buffer ETFs
The two newly-launched Quarterly Buffer ETFs, the Innovator U.S. Equity 5 to 15 Buffer ETF (EALT) and the Innovator U.S. Equity 10 Buffer ETF (ZALT), build upon Innovator’s Defined Wealth Shield ETF (BALT), launched in 2021, to offer a full suite of U.S. equity strategies with a quarterly outcome period. Every quarter, ZALT is engineered to offer a 10% buffer against market losses with an initial upside cap of 3.81%, and EALT offers a 10% buffer against market losses after a 5% downturn, allowing for a higher initial upside cap of 6.80%.
New Premium Income Buffer ETFs
Innovator’s suite of Defined Income ETFs, which launched with the Premium Income Barrier ETFs in April, has amassed $192 million in AUM. The strategies have outperformed the broad bond market since inception.1 The two new Premium Income Buffer ETFs, the Innovator Premium Income 9 Buffer ETF (HOCT) and the Innovator Premium Income 15 Buffer ETF (LOCT), are designed to provide high rates of income with built-in buffers against losses. HOCT and LOCT are engineered to mitigate losses up to 9% and 15%, respectively, with a 12-month defined distribution rate of 8.43%, and 7.46%, respectively.
Per the funds’ objective, the Defined Distribution Rate is not guaranteed and is shown before fees, which have the result of a lower distribution. Performance quoted represents past performance, which is no guarantee of future results. Investment returns and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than quoted. Visit innovatoretfs.com/define for current month-end performance.
Premium Income Barrier ETFs Lineup Expands
Innovator is also expanding the firm’s Premium Income Barrier ETFs with the launch of its October series. OCTD, OCTH, OCTJ, and OCTQ are designed to generate high rates of income while providing barriers against losses of 10%, 20%, 30%, or 40%, respectively. Innovator plans to launch its fourth series of Income Barrier ETFs in January, enabling investors to pursue fresh 12-month distribution rates at the start of any calendar quarter.
“From day one, we’ve been dedicated to bringing investment tools to market that have historically been locked behind high fees and obscure market structures,” said Graham Day, CIO at Innovator ETFs. “These new launches are a continuation of that effort, giving investors an even-greater variety of strategies for their portfolios. We’re excited to continue to work directly with advisors and investors to deliver innovative investment solutions that address their unique investment challenges and needs.”
Innovator additionally announced today the resetting of 16 ETFs across its Buffer, Barrier, and Accelerated lineup. The full list of ETFs listing and resetting on October 2 is below:
| New ETFs | |||||
| Ticker | Name | Ref. Asset | Downside | Outcome Period | Cap or Defined Dist. Rate* |
| EALT | U.S. Equity 5 to 15 Buffer | SPY | 10% (-5% to -15%) Buffer | 3 months | 6.80% |
| ZALT | U.S. Equity 10 Buffer | SPY | 10% Buffer | 3 months | 3.81% |
| HOCT | Premium Income 9 Buffer | SPY | 9% Buffer | 12 months | 8.43% |
| LOCT | Premium Income 15 Buffer | SPY | 15% Buffer | 12 months | 7.46% |
| OCTD | Premium Income 10 Barrier | SPX | 10% Barrier | 12 months | 9.96% |
| OCTH | Premium Income 20 Barrier | SPX | 20% Barrier | 12 months | 8.65% |
| OCTJ | Premium Income 30 Barrier | SPX | 30% Barrier | 12 months | 7.43% |
| OCTQ | Premium Income 40 Barrier | SPX | 40% Barrier | 12 months | 6.56% |
| Rebalancing ETFs | |||||
| Ticker | Name | Ref. Asset | Profile | Outcome Period | Cap |
| BALT | Defined Wealth Shield | SPY | 20% Buffer | 3 months | 2.80% |
| BOCT | U.S. Equity Buffer | SPY | 9% Buffer | 12 months | 20.31% |
| POCT | U.S. Equity Power Buffer | SPY | 15% Buffer | 12 months | 15.50% |
| UOCT | U.S. Equity Ultra Buffer | SPY | 30% (-5% to -35%) Buffer | 12 months | 15.02% |
| KOCT | U.S. Small Cap Power Buffer | IWM | 15% Buffer | 12 months | 19.10% |
| NOCT | Growth-100 Power Buffer | QQQ | 15% Buffer | 12 months | 18.19% |
| EOCT | Emerging Markets Power Buffer | EEM | 15% Buffer | 12 months | 20.57% |
| IOCT | Intl Developed Power Buffer | EFA | 15% Buffer | 12 months | 18.29% |
| TFJL | 20+ Year Treasury Bond 5 Floor | TLT | 5% Floor | 3 months | 11.28% |
| TSLH | Hedged TSLA Strategy | Tesla, Inc | 10% Floor | 3 months | 9.00% |
| XBOC | U.S. Equity Accelerated 9 Buffer | SPY | 2x/1x + 9% Buffer | 12 months | 14.20% |
| XDOC | U.S. Equity Accelerated | SPY | 2x/1x | 12 months | 18.78% |
| XTOC | U.S. Equity Accelerated Plus | SPY | 3x/1x | 12 months | 17.52% |
| QTOC | Growth Accelerated Plus | QQQ | 3x/1x | 12 months | 21.75% |
| XDSQ | U.S. Equity Accelerated | SPY | 2x/1x | 3 months | 7.36% |
| XDQQ | Growth Accelerated | QQQ | 2x/1x | 3 months | 9.30% |
*Per the funds’ objective, the Defined Distribution Rate is not guaranteed and is shown before fees, which have the result of a lower distribution.
Standardized Returns as of 9/30/2023:
| 1. 3/31/23 – 9/30/23 | APRD | APRH | APRJ | APRQ | Bloomberg U.S. Agg Bond Index | |
| ETF NAV | 5.19% | 4.56% | 3.69% | 2.97% | -4.05% | |
| ETF Price | 5.03% | 4.37% | 3.56% | 2.82% | -4.05% | |
Source: Bloomberg, 3/31/23 – 9/30/23. The ETFs were incepted on 3/31/2023. The Bloomberg U.S. Agg Bond Index is a broad measure of the performance of the U.S. investment grade bond market. You cannot invest directly in an index. There are material differences between traditional fixed income asset classes and the Innovator Income ETFs, which seek to provide a high level of income. The NAV of Income ETFs is tied to the underlying options on the S&P 500, a broad-based measure of the large cap U.S. equity market. The value of fixed income products is tied to the value of the fixed income instruments the products hold. Within a corporate capital structure, equity is generally subordinate to fixed income assets and, as such, carries a higher level of risk than fixed income assets.
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 Funds is right for you, please see “Investor Suitability” in the prospectus.
The funds only seek to provide their investment objective, which is not guaranteed, over the course of an entire outcome period. Investors who purchase shares after or sell shares before the end of an outcome period will experience very different outcomes than the funds seek to provide.
Buffer ETFs
You will bear all reference asset losses exceeding the buffer. 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 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 Funds seek to provide shareholders that hold Shares for the entire Outcome Period with a Buffer against the first 9% or 15% of Underlying ETF losses during the Outcome Period. The Funds’ shareholders will bear all Underlying ETF losses exceeding the Buffer on a one-to-one basis. If the Outcome Period has begun and the Funds have decreased in value beyond the pre-determined Buffer, an investor purchasing Shares at that price may not benefit from the Buffer. Similarly, if the Outcome Period has begun and the Funds have increased in value, an investor purchasing Shares at that price may not benefit from the Buffer until the Funds’ values have decreased to their value at the commencement of the Outcome Period.
Income ETFs
The Funds seek to provide shareholders distribution payments (the “Defined Distributions”) that represent a U.S. dollar amount per Share payable by the Fund over an Outcome Period. Defined Distributions are comprised of (i) the income generated by the Fund’s investments in U.S. Treasuries with maturity dates on or about each Distribution Date, the majority with maturities on or about the final Distribution Date at the conclusion of the Outcome Period, and (ii) the premiums generated from the Fund’s FLEX Options positions that expire at the end of each Outcome Period. The Fund will establish an annualized payment rate (the “Defined Distribution Rate”) based upon the Fund’s net asset value (“NAV”) at the commencement of the Outcome Period, which is the percentage of Defined Distributions per Share over the Outcome Period.
These Funds are designed to provide point-to-point exposure to the price return of the Reference Asset via a basket of Flex Options. As a result, the ETFs are not expected to move directly in line with the Reference Asset during the interim period.
Investors purchasing shares after an outcome period has begun may experience very different results than funds’ investment objective. Following the initial outcome period, each subsequent outcome period will begin on the first day of the month the funds were incepted. After the conclusion of an outcome period, another will begin.
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, liquidity risk, management risk, market maker risk, market risk, non-diversification risk, operation risk, options risk, trading issues risk, upside participation risk and valuation risk. For a detail list of fund risks see the prospectus.
FLEX Options Risk The Fund will utilize FLEX Options issued and guaranteed for settlement by the Options Clearing Corporation (OCC). 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 standard options. In a 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.
Investing involves risk, including the possible loss of principal.
The Funds’ investment objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information, and it may be obtained at innovatoretfs.com. Read it carefully before investing.
Innovator ETFs are distributed by Foreside Fund Services, LLC.
Copyright © 2023 Innovator Capital Management, LLC
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