Innovator Capital Management, LLC (Innovator) today announced the
anticipated upside cap ranges and return profiles for the 14 ETFs
in the October series of the sponsors’ Defined Outcome ETFs™
lineup, as well as the five quarterly resetting ETFs that will also
rebalance at the end of the month. The resetting ETFs span
Innovator’s Defined Outcome ETF™ lineup, including Buffer ETFs™,
Accelerated ETFs™ and Floor ETFs™. With resets across 19 ETFs in
total, this rebalance will be the Defined Outcome ETF™ pioneer’s
largest to date across its industry-leading lineup.
Anticipated return profiles for the Defined Outcome
ETFs™ – October Series with
annual outcome periods as of 9/22/22
Ticker |
Name |
Reference Asset(s) |
Buffer Level |
Cap Range* |
Outcome Period |
NOCT |
Innovator Growth-100 Power Buffer ETF™ - October |
QQQ |
15.00% |
19.33 – 22.96% |
12 months 10/01/22 – 9/30/23 |
KOCT |
Innovator U.S. Small CapPower Buffer ETF™ - October |
IWM |
15.00% |
19.40 – 22.41% |
12 months 10/01/22 – 9/30/23 |
IOCT |
Innovator International DevelopedPower Buffer ETF™ - October |
EFA |
15.00% |
19.35 – 23.80% |
12 months 10/01/22 – 9/30/23 |
EOCT |
Innovator Emerging MarketsPower Buffer ETF™ - October |
EEM |
15.00% |
13.79 – 21.79% |
12 months 10/01/22 – 9/30/23 |
BOCT |
Innovator U.S. Equity Buffer ETF™ - October |
SPY |
9.00% |
21.85 – 27.50% |
12 months 10/01/22 – 9/30/23 |
POCT |
Innovator U.S. Equity Power Buffer ETF™ - October |
SPY |
15.00% |
15.80 – 19.06% |
12 months 10/01/22 – 9/30/23 |
UOCT |
Innovator U.S. EquityUltra Buffer ETF™ - October |
SPY |
30.00% (-5% to -35%) |
12.96 – 16.35% |
12 months 10/01/22 – 9/30/23 |
DSOC |
Innovator Double Stacker ETF™ - October |
SPY, QQQ |
NA |
SPY Upside Cap Range: 10.97 – 12.99%QQQ Upside Cap Range: 10.97 –
12.99%Total Upside Cap Range: 21.93 – 25.98% |
12 months 10/01/22 – 9/30/23 |
DBOC |
Innovator Double Stacker 9 Buffer ETF™ - October |
SPY, QQQ |
9.00% |
SPY Upside Cap Range: 7.76 – 9.09%QQQ Upside Cap Range: 7.76 –
9.09%Total Upside Cap Range: 15.51 – 18.18% |
12 months 10/01/22 – 9/30/23 |
TSOC |
Innovator Triple Stacker ETF™ - October |
SPY, QQQ, IWM |
NA |
SPY Upside Cap Range: 6.58 – 7.88%QQQ Upside Cap Range: 5.36 –
6.00%IWM Upside Cap Range: 5.36 – 6.00%Total Upside Cap
Range: 19.78 – 23.64% |
12 months 10/01/22 – 9/30/23 |
* The Cap Ranges above are based on the highest
and lowest Cap as illustrated by the Funds’ strategy from
8/24/22-9/22/22 and are shown gross of each fund’s management fee
(.79% for all funds in the table above, except for IOCT (.85%) and
EOCT (.89%)). 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
The average upside caps of the October
series of the Innovator Accelerated ETFs™, as of
9/22/2022, are as follows in the table below:
Ticker |
Reference Asset |
Upside to Cap |
Downside |
Average Cap** |
Outcome Period |
XDOC |
SPY |
2X |
1X |
25.25% |
Annual 10/01/22 – 9/30/23 |
XBOC |
SPY |
2X |
1X, 9% Buffer |
17.69% |
Annual 10/01/22 – 9/30/23 |
XTOC |
SPY |
3X |
1X |
22.70% |
Annual 10/01/22 – 9/30/23 |
QTOC |
QQQ |
3X |
1X |
25.74% |
Annual 10/01/22 – 9/30/23 |
** The Average Cap listed above represents an average of
estimated caps, as illustrated by the fund’s strategy, based upon
10 previous trading days, from 9/09/2022 to 9/22/2022, and are
shown gross of the 0.79% management fee. It does not represent the
actual cap that will be set at the beginning of the Outcome Period,
which will be 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 Average Cap
displayed above. The Cap Ranges based on the highest and lowest Cap
as illustrated by the Funds’ strategy from 8/24/22-9/22/22 (gross
of the 0.79% management fee) are as follows: 22.00% to 26.34% for
XDOC; 15.60% to 18.52% for XBOC; 19.90% to 23.71% for XTOC; and
23.04% to 26.89% for QTOC. “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. Investors
who purchase shares after the start of an outcome period may be
exposed to enhanced risk.
Anticipated return profiles for the Defined Outcome
ETFs™ – Quarterly resetting
series, as of 9/22/22
Ticker |
Name |
Reference Asset |
Buffer or Floor Level |
Cap Range**** |
Outcome Period |
BALT |
Innovator Defined Wealth Shield ETF |
SPY |
**20.00% Buffer |
2.06 – 2.76% |
Quarterly; 3 months 10/01/22 – 12/1/22 |
TFJL |
Innovator 20+ Year Treasury Bond 5 FloorETF™ |
TLT |
5.00% Floor*** |
4.94 – 7.39% |
Quarterly; 3 months 10/01/22 – 12/1/22 |
TSLH |
Innovator Hedged TSLA Strategy ETF |
TSLA |
10% Floor |
9.86 – 11.13% |
Quarterly; 3 months 10/01/22 – 12/1/22 |
** Although BALT targets a 20% buffer, the
buffer may fall into a range of 15% to 20%; there is no guarantee
that the buffer will be within this range or that the Fund will
provide the buffer. The Upside Cap above is shown gross of the
.175% quarterly (0.69% annual) management fee for BALT. “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 commencement of the Outcome Period, the remaining Cap
and/or Buffer can be found on a daily basis via
www.innovatoretfs.com***“Floor” refers to the projected maximum
amount of loss an investor can expect to incur prior to the
downside protection the fund seeks to provide, before fees and
expenses, over the full Outcome Period. The Floor is only operative
against Underlying share price losses exceeding approximately 5%
for TFJL and 10% for TSLH over the duration of the Outcome Period.
There is no guarantee that the Fund will be successful in its
attempt to provide the Floor. If an investor is considering
purchasing Shares during the Outcome Period, and the Fund has
already increased in value, then a shareholder may experience
losses prior to gaining the protection offered by the Floor, which
is not guaranteed. ****The Cap Ranges above are based on the
highest and lowest Cap as illustrated by the Funds’ strategy from
8/24/22-9/22/22 and are shown gross of each fund’s management fee
(.175% quarterly and .69% annual for BALT; .2% quarterly and .79%
annually for TFJL and TSLH). 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 commencement of the
Outcome Period, the remaining Cap and/or Buffer can be found on a
daily basis via www.innovatoretfs.com .
Ticker |
Reference Asset |
Upside to Cap |
Downside |
Average Cap**** |
Outcome Period |
Rebalancing |
XDSQ |
SPY |
2X |
1X |
10.85 |
% |
Quarterly |
10/01/22 |
XDQQ |
QQQ |
2X |
1X |
12.84 |
% |
Quarterly |
10/01/22 |
**** The Average Cap listed above represents an average of
estimated caps, as illustrated by the fund’s strategy, based upon
10 previous trading days, from 9/09/2022 to 9/22/2022, and are
shown gross of the 0.79% management fee. It does not represent the
actual cap that will be set at the beginning of the Outcome Period,
which will be 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 Average Cap
displayed above. The Cap Ranges based on the lowest and highest Cap
as illustrated by the Funds’ strategy from 8/24/22-9/22/22 (gross
of the 0.79% management fee) are as follows: 8.97% to 11.94% for
XDSQ; 10.88% to 13.87% for XDQQ. “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. Investors who purchase shares after the
start of an outcome period may be exposed to enhanced risk.
Lineup Overview of Resetting Defined
Outcome ETFs™Buffer
ETFs™ seek to participate in the upside
of a reference asset, to a cap, while buffering a set level of loss
over an outcome period of one quarter or one year. The ETFs simply
reset at the end of their designated outcome period and can be held
indefinitely.
All of the reference assets for each of the
October Equity Buffer ETFs™ are currently trading below their
starting values at the beginning of the current annual outcome
period. This means that investors who have held shares in a given
October Buffer ETF™ have been buffered against a certain amount of
loss relative to their respective benchmark asset, such as SPY for
BOCT, POCT and UOCT; QQQ for NOCT; and IWM for KOCT.
The October series of Innovator’s International
Equity Power Buffer ETFs™ -- the Innovator International Developed
Power Buffer ETF – October (IOCT) and the Innovator Emerging
Markets Power Buffer ETF – October (EOCT) – will complete their
first outcome period since their 2021 launch. Volatility continues
to be elevated in foreign stock benchmarks as investors assess the
outlook for international equities with the Russia-Ukraine war
creating geopolitical turmoil and global monetary policy tightening
addressing heightened inflation.
Accelerated
ETFs™ are the world’s first ETFs that
seek to offer approximately 2 or 3 times the upside return of the
SPDR S&P 500 ETF (SPY) or Invesco QQQ Trust (QQQ), to a cap,
with approximately single exposure to the downside, over a
quarterly or annual outcome period. The wealth
accumulation-oriented Accelerated ETFs™ premiered April 1st, 2021,
and the October Accelerated ETFs™ with an annual outcome period
will complete their first outcome period at the end of the month.
As well, the quarterly resetting XDSQ and XDQQ will complete their
sixth full outcome period and reset for the fifth time at the end
of the month.
Defined Outcome Bond
ETFs™ seek to maximize the
diversification benefits of bonds with a built-in floor or buffer
against loss over one quarter or one year. TFJL seeks to provide
investors the upside performance of long-dated 20+ year U.S.
Treasuries, to a cap, with a floor against loss greater than 5%
over a quarterly outcome period via options on iShares 20+ Year
Treasury ETF (TLT). As investors have sold long-dated U.S.
government bonds in response to historically high inflation prints
and rapid monetary policy tightening over recent quarters, TFJL has
provided a buffer against the full brunt of losses in TLT for
investors who have held shares for a given outcome period when TLT
losses exceed the floor.
BALT: The Innovator Defined Wealth
Shield ETF seeks to provide investors with a conservative
investment strategy that offers upside exposure to Large-Cap U.S.
equities, to a cap, with a targeted buffer against the first 20% of
quarterly losses in SPY (SPDR S&P 500 Trust) over each
three-month period. BALT was launched July 1st, 2021 and will reset
for the fifth time at the end of the quarter. Investors in BALT
since inception have avoided the selloff in domestic Large-cap
stocks and have actually seen price appreciation in their shares,
relative to losses for SPY.
Innovator’s research shows that for the 761
3-month rolling periods between 1958 and May 2021, with a 20%
buffer, you would have been positive or neutral in 98.8% of those
periods. In the periods exceeding 20%, the average loss was
approximately 4%.
Investing in BALT involves risk, and
does not provide investment income. The BALT ETF seeks to provide a
large buffer (15-20% on a quarterly basis) against loss, with a
defined upside cap before fees and expenses, benchmarked to the
price return of SPY. As a result, the fund does not provide
investment income. A money market fund is a kind of mutual fund
that invests in highly liquid, near-term instruments. These
instruments include cash, cash equivalent securities, and
high-credit-rating, debt-based securities with a short-term
maturity (such as U.S. Treasuries).
Accelerated
ETFs™The Accelerated ETFs™ are
not like leveraged ETFs, which typically seek to provide a
magnified exposure on both the upside and the downside on a daily
basis and can compound risk with higher volatility when held
long-term due to their frequent, often daily, rebalancing. Instead,
the Accelerated ETFs™ seek to provide asymmetrical returns over
either a typically annual or quarterly outcome period that are
magnified on the upside only, to a cap. Innovator’s Accelerated
ETFs™ will rebalance annually or quarterly, making the funds more
suited for asset allocation and longer-term investors rather than
tools for ultra-tactical trading. In the Accelerated ETFs™ case, it
is important to note that investors must hold shares for an entire
outcome period to achieve the enhanced returns that a fund seeks to
provide.
While the Funds are designed to participate in
the reference ETF (SPY or QQQ) losses on a one-to-one basis over
the duration of the outcome period as a whole, a decrease in the
value of the reference asset’s share price may cause a decrease in
the Fund’s NAV while an outcome period is ongoing. Therefore an
investor that purchases Shares after an outcome period has begun
may be exposed to incremental downside risk if the reference asset
has increased in value.
The shorter outcome period of the Quarterly
outcome period Accelerated ETFs™ (XDSQ, XDQQ) means they will
follow the reference asset (SPY or QQQ) more closely, but have
lower starting caps than Accelerated ETFs™ with an annual outcome
period. Investors can use both outcome periods to tactically
respond to changing market conditions should they wish to do
so.
At the end of each Accelerated ETF™’s outcome
period, the ETF will simply rebalance and reset, providing
investors with new upside caps and a fresh 9% Buffer in the case of
XBAP, over the next outcome period. The Accelerated ETFs™ do not
expire and can be long-term core equity holdings in a portfolio.
The options-based ETFs are anticipated to be as tax-efficient as
traditional equity ETFs, with no planned cap gains distributions to
shareholders and investors being able to defer taxes until
selling.
Investors in the Innovator Accelerated ETFs™
will not receive dividend yield from their holdings; the ETFs will
be based on the price returns of the reference ETF (SPY or QQQ)
over the length of the outcome period. The Innovator Accelerated
ETFs™ will charge a 0.79% management fee.
The Accelerated ETFs™ are constructed using Cboe
FLEX Options, offering exposure to equity markets rather than
investing in them directly. The FLEX Options forming the underlying
positions of the first three Innovator Accelerated ETFs™ are based
on SPY or QQQ (the reference asset).
The Accelerated ETFs™ provide defined returns
over the entire Outcome Period, not on a daily basis. As a result,
interim returns may lag the reference benchmark ETFs. This is due
to the time-value nature of the underlying options held by the
fund; as such, the Accelerated ETFs™ won’t maintain proportional
betas of 1.0 to the reference ETF in instances of positive returns
for the associated equity benchmark. Though they provide
simultaneous multiple exposure to the upside of the benchmark, the
Accelerated ETFs™ only seek to provide the positive performance of
the reference ETF over the full Outcome Period, up to a cap, and
1:1 downside to the reference asset over the Outcome Period. In the
interim, or intra-Outcome Period, investors can expect the
Accelerated ETFs™ to exhibit lower beta than traditional passive
index-tracking ETFs. An investor that purchases Shares after an
Outcome Period has begun may be exposed to downside from that point
forward if the reference asset has appreciated in value since the
period began.
TFJL Investors in the
Innovator 20+ Yr Treasury Bond 5 Floor
ETF™ (TFJL) will not receive yield from
their holdings in TFJL; the ETF is based on the price returns of
TLT over the length of the quarterly outcome period.
TSLHThe Innovator
Hedged TSLA Strategy ETF (TSLH), TSLH seeks to provide
upside participation in TSLA, subject to a limit on investment
gains, while aiming to protect against losses of greater than 10%,
each calendar quarter. With TSLH, Innovator seeks to provide a
risk-managed approach to investing in Tesla (TSLA), which has been
one of the most popular and best performing large-cap stocks in the
market, but also one of the most volatile1.
The ETF’s strategy will seek to solve for the
large historical drawdowns in shares of the electric vehicle
leader, offering potentially substantial upside exposure to TSLA
during periods when the stock rises while attempting to limit
downside risk by targeting a protective floor against TSLA losses
greater than approximately 10% per quarter. TSLH was launched July
26th and will complete its first outcome period, an abbreviated
quarter, and reset at the end of the month for the fourth
quarter.
There is no guarantee that the fund will
be successful in implementing the strategy. The ETF will not invest
directly in TSLA, but rather in options tied to the company. An
investor's possible return profile in TSLH will also depend on the
time at which such investor purchases and sells shares of the
ETF.
Shareholders in the Fund will not be
entitled to receive dividends, if any, that may be payable on TSLA.
The Options Portfolio will consist of exchange listed options
contracts on TSLA, including FLexible EXchange® Options (“FLEX
Options”).
Innovator Defined Outcome ETFs - Benefits to
Advisors
- Pioneer and creator
of Defined Outcome ETFs™ with 80 ETFs and over $8 billion AUM
across family2, as well as 5 Managed Outcome ETFs™ with over $200
million in AUM
- Tax-efficient
exposure3 to five broad equity benchmarks with buffers against loss
(Large-cap U.S. Equity (SPY), Growth (QQQ), Small-Cap U.S. Equity
(IWM), International Developed (EFA), Emerging Markets (EEM)) the
20+ Year U.S. Treasury Market (TLT); the Stacker ETFs, the world’s
first ETFs to offer a “stacked” exposure to two or three benchmark
equity index ETFs on the upside, to a cap, with downside exposure
to the SPY only; and the Accelerated ETFs™, the world’s first ETFs
to seek to offer a multiple of the upside return of a reference
asset, up to a cap, with approximately single exposure on the
downside
- Reset annually or
quarterly and can be held indefinitely as core holdings
- Innovator’s Defined
Outcome ETF™ lineup has amassed 159 outcome period completions with
the ETFs successfully resetting for the coming outcome period4
- Monthly issuance on
SPY with three buffer levels (9,15, or 30%)
Innovator's Defined Outcome ETFs™ are the
subject of a patent application filed with the U.S. Patent and
Trademark Office.
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.
About Innovator Defined Outcome
ETFs™ Defined Outcome ETFs™ are the world’s first ETFs
that seek to provide investors with known ranges of future
investment outcomes prior to investing. These outcome ranges
include multiple and single upside exposure, to a cap, with defined
levels of downside risk with buffers and floors over a set amount
of time. The Innovator Defined Outcome ETFs™ cover a large spectrum
of domestic and international equities and bonds. Innovator’s
category-creating Defined Outcome ETF™ family includes Buffer
ETFs™, Stacker ETFs™ and Floor ETFs™.
The Buffer ETFs™ seek to provide the upside
performance of broadly recognized benchmarks (e.g., SPY, QQQ, IWM,
EFA, and EEM, as well as TLT) to a cap, with built-in buffers, over
an outcome period of one year. The ETFs reset annually and can be
held indefinitely.
Each Buffer ETF™ in Innovator’s Defined Outcome
ETF™ suite seeks to provide a defined exposure to a broad market
benchmark where the downside buffer level, upside growth potential
to a cap, and Outcome Period are all known, prior to investing. In
2019, Innovator began expanding its suite of U.S. Equity 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 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 products5 (e.g., downside buffer levels, upside
participation, defined outcome parameters), but with the added
benefits of transparency, liquidity, the elimination of credit
risk6 and lower costs afforded by the ETF structure.
About Innovator Capital Management,
LLCAwarded ETF.com's "ETF Issuer of the Year - 2019"*,
Innovator Capital Management LLC (Innovator) is an SEC-registered
investment advisor (RIA) based in Wheaton, IL. Formed in 2017,
the firm is headed by ETF visionaries Bruce Bond and John Southard,
founders of one of the largest ETF providers in the world. Bond and
Southard reentered the asset management industry to bring to market
the Defined Outcome ETFs™, first-of-their-kind investment
products that they felt would change the investing
landscape and bring more certainty to the financial planning
process. Innovator’s category-creating Defined Outcome ETF™ family
includes Buffer ETFs™, Floor ETFs, Accelerated ETFs™ and Managed
Outcome ETFs™. Since the 2018 launch of their flagship Innovator
U.S. Equity Buffer ETF™ suite, Innovator’s solutions have helped
advisors construct portfolios and manage risk to fit their client’s
unique financial needs. Built on a foundation of innovation and
driven by a commitment to help investors better control their
financial outcomes, Innovator is leading the Defined Outcome ETF
Revolution™. For additional information, visit
www.innovatoretfs.com.
About Cboe Global Markets,
Inc.Cboe Global Markets is one of the world’s largest
exchange-holding companies, offering cutting-edge trading and
investment solutions to investors around the world. For more
information, visit www.cboe.com.
About Milliman Financial Risk Management
LLCMilliman 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 approximately $173.5 billion in global assets as of
September 30, 2021. Milliman FRM is one of the largest and
fastest-growing subadvisors of ETFs. For more information about
Milliman FRM, visit www.Milliman.com/FRM.
Media ContactPaul Damon+1 (802)
999-5526paul@keramas.net
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.
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.
Investing involves risks. Loss of
principal is possible. 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.
Market Disruptions Resulting from
COVID-19. The outbreak of COVID-19 has negatively affected
the worldwide economy, individual countries, individual companies
and the market in general. The future impact of COVID-19 is
currently unknown, and it may exacerbate other risks that apply to
the Fund.
Foreign and Emerging Markets
Risk Non-U.S. securities and Emerging Markets are subject
to higher volatility than securities of domestic issuers due to
possible adverse political, social or economic developments,
restrictions on foreign investment or exchange of securities, lack
of liquidity, currency exchange rates, excessive taxation,
government seizure of assets, different legal or accounting
standards, and less government supervision and regulation of
securities exchanges in foreign countries.
Technology Sector Risk
Companies in the technology sector are often smaller and can be
characterized by relatively higher volatility in price performance
when compared to other economic sectors. They can face intense
competition, which may have an adverse effect on profit
margins.
Small-Cap Risk Small-cap
companies may be more volatile and susceptible to adverse
developments than their mid- and large-cap counterpart. In
addition, the small-cap companies may be less liquid than larger
companies.
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.
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. Initial outcome periods are approximately
1-year beginning on the funds' inception date. Following the
initial outcome period, each subsequent outcome period will begin
on the first day of the month the fund was incepted. After the
conclusion of an outcome period, another will begin.
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 with buffer mechanisms only
seek to provide shareholders that hold shares for the entire
Outcome Period with their respective buffer level against Reference
Asset losses during the Outcome Period. You will bear all Reference
Asset losses exceeding 9, 15 or 30%. 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.
TSLH Disclosures:
Shareholders in the Fund will not be entitled to receive
dividends, if any, that may be payable on TSLA. The Options
Portfolio will consist of exchange listed options contracts on
TSLA, including FLexible EXchange® Options (“FLEX
Options”).
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. Principal loss is possible. The Fund
is actively managed and seeks to provide risk-managed investment
exposure to the common share price of Tesla, Inc. (TSLA) through an
active hedging strategy.The Fund will seek to participate in the
price return TSLA, subject to a limit on investment gains and will
seek to provide a floor against TSLA losses, up to a limit through
the Sub-Adviser's investments in the Options Portfolio and Treasury
Portfolio. There is no guarantee the fund will be successful in its
attempt to protect against TSLA losses.
During periods in which TSLA appreciates, the
Fund seeks to participate in the price return experienced by TSLA.
However, if TSLA appreciates beyond the strike prices of the sold
call option, the Fund will not experience such increase to the same
extent and may underperform TSLA over certain periods of time.
Through the Options Portfolio, the Fund may
experience losses experienced by TSLA. However, the Fund will seek
to limit overall portfolio losses by virtue of the Fund’s Treasury
Portfolio. The Fund seeks to implement an investment strategy that
provides protection from significant declines in the price of TSLA,
such that losses will be limited to the amount of the Options
Portfolio and declines, if any, in the performance of the Fund’s
U.S. Treasury Bills over each successive period of approximately
three months. Additional funds utilized for investment into the
Fund will be invested proportionally to the Fund’s Treasury
Portfolio and Options Portfolio at the time of investment until the
expiration date of Options Portfolio held by the Fund. There is no
guarantee that the Fund, in the future, will provide upside
participation to the price exposure to TSLA within the range
currently estimated. The limits to the upside performance of the
Fund could fluctuate, depending on prevailing market conditions at
the time the Fund enters into the options contracts. The actual
caps may be lower or higher.Strategy Risk: The
Fund employs an active hedging strategy that seeks to provide
risk-managed investment exposure to TSLA. In doing so, there is no
guarantee that the Fund will be successful in its strategy to
provide protection against TSLA losses. The Fund does not provide
principal protection or non-principal protection, and an investor
may experience significant losses on its investment, including the
loss of its entire investment.The trading price of TSLA has been
highly volatile and could continue to be subject to wide
fluctuations in response to various factors. The stock market in
general, and the market for technology companies in particular, has
experienced extreme price and volume fluctuations that have often
been unrelated or disproportionate to the operating performance of
those companies.The Fund's 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/etfs/tslh. Read it carefully
before investing.
A webpage with information on TSLH is
here.Tesla, Inc. is not affiliated with the Trust, Innovator,
Milliman or its respective affiliates and is not involved with this
offering in any way. Innovator has not made any due diligence
inquiry with respect to the publicly available information of
Tesla, Inc. in connection with this offering. Investors in the
Shares will not have voting rights with respect to the underlying
stock.
THE CORPORATIONS MAKE NO WARRANTIES AND
BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).
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.
* ETF.com’s editorial team
chose the finalists and then the ETF.com Awards Selection
Committee, an independent panel comprised of fifteen of the ETF
industry’s leading analysts, consultants and investors, decided the
winners.
Innovator ETFsTM, Defined Outcome ETFTM, Buffer
ETFTM, Accelerated ETFTM, Stacker ETFTM, Enhanced ETFTM, Define
Your FutureTM, Leading the Defined Outcome ETF RevolutionTM and
other service marks and trademarks related to these marks are the
exclusive property of Innovator Capital Management, LLC.
The Funds' investment objectives, risks, charges
and expenses should be considered 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 © 2022 Innovator Capital Management,
LLC.
800.208.5212
1 During Q2 2022, TSLA was the 11th most volatile stock in the
S&P 500 and had the highest average daily trading volume, based
on constituents as of 7/14/22. In the 10-year period to 6.30.22,
TSLA outperformed SPY by 10,426%; and in the 10-year period to
12.31.21, TSLA outperformed SPY by over 18,000%. Concerning losses,
TSLA had a max drawdown of -60.6% in the first quarter of 2020 and
fell -48.9% from a November 2021 all-time high. Past performance is
not indicative of future results and such returns may not be
sustainable. Source: Bloomberg LP. 2 ETF count and AUM in all
Innovator Defined Outcome ETFs™ as of 9.22.2022, excluding Managed
Outcome ETFs™ BUFF, BUFB, BSTP, PSTP, XUSP3 ETFs use creation
units, which allow for the purchase and sale of assets in the fund
collectively. Consequently, ETFs usually generate fewer capital
gain distributions overall, which can make them somewhat more
tax-efficient than mutual funds. 4 As of 9.01.2022
5 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.
6 Defined Outcome ETFs are not backed by the faith and credit of
an Issuing institution, so they are not exposed to credit risk.
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