Innovator Capital Management, LLC (Innovator) today announced the
anticipated upside cap ranges and return profiles for the September
series of the U.S. Equity Buffer ETFs™ – Innovator U.S. Equity
Buffer ETF™ – September (BSEP), Innovator U.S. Equity Power Buffer
ETF™ – September (PSEP) and Innovator U.S. Equity Ultra Buffer ETF™
– September (USEP) – which are scheduled to complete their second
outcome period and reset at the end of the month. The 36 total ETFs
in the flagship U.S. Equity Buffer ETF lineup seek to provide
investors with upside participation, to a cap, in Large-cap U.S.
stocks via options on the SPDR S&P 500 ETF Trust (SPY)1 with
buffers against market losses of 9%, 15% or 30% over one-year
periods.
Anticipated return profiles for the Innovator U.S.
Equity Buffer ETFs™ – September
Series, as of 8/23/2021
Ticker |
Name |
Buffer Level |
Est. Cap Range* |
Outcome Period |
BSEP |
Innovator U.S. Equity Buffer ETF™ - September |
9.00% |
|
12.09 – 13.14% |
12 months 9/01/21 – 8/31/22 |
PSEP |
Innovator U.S. EquityPower Buffer ETF™ - September |
15.00% |
|
7.63 - 8.42% |
12 months 9/01/21 – 8/31/22 |
USEP |
Innovator U.S. EquityUltra Buffer ETF™ - September |
30.00% (-5% to -35%) |
5.98 – 6.35% |
12 months 9/01/21 – 8/31/22 |
* The Estimated Cap Ranges above are based on
the highest and lowest Cap as illustrated by the Funds’ strategy
from 7/26/2021-8/23/2021 and are shown gross of the 0.79%
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 Estimated 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 Caps can be found on a daily basis via
www.innovatoretfs.com.
The September series of Innovator U.S. Equity
Buffer ETFs™ (BSEP; PSEP; USEP) currently have a remaining outcome
period of one week. Investors who purchase prior to the rebalance
will be fully invested for the next outcome period, obtaining new
upside caps and downside buffers for the year commencing September
1, 2021. The ETFs reset annually and can be held indefinitely. For
additional information, visit the Innovator Defined Outcome
ETF Pricing Tool.
Innovator Defined Outcome ETFs - Benefits to
Advisors
- Pioneer and creator
of Defined Outcome ETFs™ with 70 ETFs and over $5 billion AUM
across family2
- 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 75 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.
In 2021, starting with the January series,
Innovator will be transitioning reference assets of the underlying
options within its Defined Outcome Equity Buffer ETFs™ to achieve
the stated outcomes with ETF-based, or fund-based, options rather
than index-based options. Innovator’s Equity Buffer ETFs™ have
traditionally used index-based options while the Defined Outcome
Bond ETFs and Stacker ETFs™ have been constructed using fund-based
options. This change is intended to streamline market making and
increase the operational efficiencies of the tax-efficient Buffer
ETFs™ and will not materially impact shareholders. The Buffer ETFs™
will continue to draw from the same deeply liquid options markets
pools that underpin the strategies, the level of the upside caps
achieved should be unaffected and no tax event will be triggered
given the options can be transferred in-kind. “These operational
changes are intended to harness the power and efficiencies of the
ETF wrapper even further for the benefit of our Defined Outcome
Buffer ETF™ investors,” stated Bruce Bond, CEO of Innovator
ETFs.
To better align the Defined Outcome ETF™ family
with this operational change in reference assets, Innovator will be
replacing the respective index in each Buffer ETF™ name with the
market segment each Buffer ETF™ provides exposure to. This change
for consistency between fund names and reference assets will apply
to 51 Buffer ETFs™. The fund name change process will take place
over the coming weeks through the beginning of September.
Legacy Fund Name Structure |
New Fund Name Structure |
Reference Asset5 |
Innovator S&P 500 Buffer ETF™ - Month |
Innovator U.S. Equity Buffer ETF™ - Month |
SPY |
Innovator S&P 500 Power Buffer ETF™ - Month |
Innovator U.S. Equity Power Buffer ETF™ - Month |
SPY |
Innovator S&P 500 Ultra Buffer ETF™ - Month |
Innovator U.S. Equity Ultra Buffer ETF™ - Month |
SPY |
Innovator Nasdaq-100 Power Buffer ETF™ - Month |
Innovator Growth-100 Power Buffer ETF™ - Month |
QQQ |
Innovator Russell 2000 Power Buffer ETF™ - Month |
Innovator U.S. Small Cap Power Buffer ETF™ - Month |
IWM |
Innovator MSCI EAFE Power Buffer ETF™ - Month |
Innovator International Developed Power Buffer ETF™ - Month |
EFA |
Innovator MSCI Emerging Markets ETF™ - Month |
Innovator Emerging Markets Power Buffer ETF™ - Month |
EEM |
Innovator Laddered Fund of S&P 500 Power Buffer ETFs™ |
Innovator Laddered Fund of U.S. Equity Power Buffer ETFs™ |
Invests in an equal-weighted basket of each monthly Innovator U.S.
Equity Power Buffer ETFs™ |
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 products6 (e.g., downside buffer levels, upside
participation, defined outcome parameters), but with the added
benefits of transparency, liquidity, the elimination of credit
risk7 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 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. Bond and Southard reentered the asset management industry to
bring to market first-of-their-kind investment opportunities,
including the Defined Outcome ETFs™, 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,
Stacker ETFs™ and the Accelerated ETFs™. Buffer ETFs™ and Floor
ETFs™ seek to provide investors structured exposures to broad
markets, where the upside growth potential, buffer or floor against
the downside, and outcome period are all known, prior to investing.
Accelerated ETFs™ are 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 over an outcome
period. Having launched the first Defined Outcome ETFs™ in 2018 --
the flagship Innovator U.S. Equity Buffer ETF™ Suite – Innovator’s
solutions allow advisors to construct diversified portfolios with
known outcome ranges to aid in risk management and financial
planning. 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 (Cboe: CBOE) 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 $150 billion in global assets as of March
31, 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.
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 ETFs™, Defined Outcome ETF™, Buffer
ETF™, Enhanced ETF™, Define Your Future™, Leading the Defined
Outcome ETF Revolution™ 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 © 2021 Innovator Capital Management,
LLC.
800.208.5212
1 Upon each respective outcome period reset in 2021, all Equity
Buffer ETFs™ will transition from index-based to fund-based
options. The U.S. Equity Buffer ETF lineup for September, October,
November and December and existing Power Buffer ETFs™ in the
October series are yet to convert from index-based options.2 AUM in
all Innovator Defined Outcome ETFs as of 8.24.2021.3 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 8.24.20215 Upon each
respective outcome period reset in 2021, all Equity Buffer ETFs™
mentioned will transition from index-based to fund-based options.
The U.S. Equity Buffer ETF lineup for September, October, November
and December and existing Power Buffer ETFs™ in the October series
are yet to convert.
6 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.
7 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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