With Major Stock Benchmarks Near Record Highs, Innovator Announces Upside Cap Ranges for July Series of Equity Buffer ETFs and Defined Outcome Bond ETFs, Rebalancing Nine ETFs July 1st

Monday, 28. June 2021 20:38

S&P 500 Buffer ETFs BJUL, PJUL and UJUL set to complete third Outcome Period, approaching three year anniversary of Defined Outcome ETFs in the market

Defined Outcome Bond ETFs TFJL and TBJL to complete first outcome period, goal of buffering losses in long-term U.S. Treasuries (TLT) as interest rates climbed since inception

International Equity Power Buffer ETFs IJUL (MSCI EAFE) and EJUL (MSCI EM) ready to finish second annual outcome period while Nasdaq-100 Power Buffer ETF (NJUL) and Russell 2000 Power Buffer ETF (KJUL) to reset for first time

Approaching $5 billion in AUM across Innovator Defined Outcome ETF suite

CHICAGO, June 28, 2021 (GLOBE NEWSWIRE) -- Innovator Capital Management, LLC (Innovator), the Defined Outcome ETF™ pioneer, today announced the anticipated upside cap ranges and return profiles for the July series of the Equity Buffer ETFs™ and Defined Outcome Bond ETFs™.

The July series of Equity Buffer ETFs™ includes:

  • the S&P 500 Buffer ETFs™ (BJUL (S&P 500 Buffer ETF™ – July), PJUL (S&P 500 Power Buffer ETF™ – July) and UJUL (S&P 500 Ultra Buffer ETF™ – July)), which are set to conclude their third outcome period at the end of the month;
  • the International Equity Power Buffer ETFs™ (IJUL (Innovator MSCI EAFE Power Buffer ETF™ – July) and EJUL (Innovator MSCI Emerging Markets Power Buffer ETF™ – July), which are set to finish their second outcome period;
  • the Domestic Equity Power Buffer ETFs™ (NJUL (Innovator Nasdaq-100 Power Buffer ETF™ – July) and KJUL (Innovator Russell 2000 Power Buffer ETF™ – July), which are set to finish their first outcome period;
  • and the Defined Outcome Bond ETFs™ (TFJL (Innovator 20+ Year Treasury Bond 5 Floor ETF™ – July) and TBJL (Innovator 20+ Year Treasury Bond 9 Buffer ETF™ – July)), which are the first ETFs to provide buffered exposure to TLT (the iShares 20+ Year Treasury Bond ETF) with upside to a cap, and are set to complete their first outcome period at the end of the month, successfully buffering against TLT losses since the ETFs’ inception in 2020.

The return profiles for the eight Buffer ETFs™ in the July series will span the fiscal year from July 1st, 2021 to June 30th, 2022, aligning with many advisors’ rebalancing and portfolio management activities. The one Floor ETF™, the Innovator 20+ Year Treasury Bond 5 Floor ETF™ – July (TFJL), will be moving to a quarterly outcome period allowing for more frequent resets and even potentially better risk management against downside in long-dated U.S. Treasuries via options on TLT.

“With many major stock markets trading at or near record high levels recently, many advisors are recognizing anew the value of Buffer ETFs™ to manage potential downside risk in equities and across client portfolios in general, yet still participate in a defined level of the upside should upward trends continue,” said Bruce Bond, CEO of Innovator ETFs. “We’re pleased to have built the Defined Outcome ETF™ space, the dedicated infrastructure as well as a track record of successful Buffer ETF™ outcome period completions that advisors have grown to rely on for building diversified portfolios with proven risk management features.”

“The coming reset of the July series of the S&P 500 Buffer ETFs for the third time and their approaching three year anniversary in August represent major milestones for Innovator, the ETF industry and, most importantly, investors,” continued Bond. “These award-winning products, which benefit from the ETF wrapper, were intended to disrupt the structured products space by helping to democratize the best aspects of defined outcome investment strategies while leaving the relatively higher fees, illiquidity, opacity, surrender charges, and counterparty credit risk1 in the past. As seen by the growth of the Defined Outcome ETF universe, advisors are steadily voting with their dollars and we could not be more committed to helping them and their clients realize the benefits of Defined Outcome ETFs through education, portfolio consultation and continued product development that attempts to solve for some of the most pressing challenges in wealth management, portfolio construction, and financial planning.”

Anticipated return profiles for the Innovator Defined Outcome Buffer and Floor ETFs – July series, as of 6/22/21

TickerNameBuffer LevelCap Range*Outcome Period
BJULInnovator S&P 500
Buffer ETF™ - July
9.00%11.95 – 14.47%
12 months
7/01/21 – 6/30/22
PJULInnovator S&P 500
Power Buffer ETF™ - July
15.00%7.48 – 8.51%
12 months
7/01/21 – 6/30/22
UJULInnovator S&P 500
Ultra Buffer ETF™ - July
30.00%
(-5% to -35%)
5.80 – 6.65%
12 months
7/01/21 – 6/30/22
IJULInnovator MSCI EAFE
Power Buffer ETF™ - July
15.00%4.60 – 9.44%12 months
7/01/21 – 6/30/22
EJULInnovator MSCI Emerging Markets
Power Buffer ETF™ - July
15.00%7.62 – 12.18%12 months
7/01/21 – 6/30/22
NJULInnovator Nasdaq-100
Power Buffer ETF™ - July
15.00%9.05 – 10.21%
12 months
7/01/21 – 6/30/22
KJULInnovator Russell 2000
Power Buffer ETF™ - July
15.00%8.99 – 10.41%
12 months
7/01/21 – 6/30/22
TFJLInnovator 20+ Year
Treasury Bond 5 Floor ETF™
5.00% Floor5.24 – 7.02%
3 months
7/01/21 – 9/30/21
TBJLInnovator 20+ Year
Treasury Bond 9 Buffer ETF™
9.00%8.12 – 10.74%
12 months
7/01/21 – 6/30/22

* The Cap Ranges above are based on the highest and lowest Cap as illustrated by the Funds’ strategy from 5/24/21-6/22/21 and are shown gross of each fund’s management fee (.79% for all ETFs except IJAN (.85%) and EJAN (.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 July series of the existing July series of the Innovator Defined Outcome ETFs™ mentioned above currently have a remaining outcome period of less than one week, with known upside potential and downside buffers through month-end. 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 outcome period commencing July 1, 2021. For additional information, visit the Innovator Defined Outcome ETF Pricing Tool.

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,” added Bond.

Innovator Defined Outcome ETFs – Potential Benefits to Advisors

  • Pioneer and creator of Defined Outcome ETFs™ with 65 ETFs and over $4.6 billion AUM across family2
  • Tax-efficient exposure3 to five broad equity benchmarks (S&P 500, NASDAQ-100, Russell 2000, MSCI EAFE, MSCI EM), the 20+ Year U.S. Treasury Market and now including 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 S&P 500 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
  • Over 61 Defined Outcome ETFs™ from Innovator have reset and successfully completed their respective outcome periods4
  • Monthly issuance on SPY or the S&P 500 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™, Floor ETFs™, Stacker ETFs™ and Accelerated ETFs™.

The Buffer ETFs™ seek to provide the upside performance of broadly recognized benchmarks (e.g., S&P 500, NASDAQ-100, Russell 2000, MSCI EAFE, and MSCI Emerging Markets, as well as the iShares 20+ Year Treasury Bond ETF (TLT)), or underlying ETFs based on those benchmarks, as applicable, 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 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.

The Innovator 20+ Year Treasury Bond 5 Floor ETF (TFJL) seeks to provide exposure to the upside performance of the iShares 20+ Year Treasury Bond ETF (TLT) to a cap and a floor against downside losses in excess of 5% over the outcome period.

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 risk and lower costs afforded by the ETF structure.***

Buffer ETFs seek to provide investors with potential market appreciation of a given reference asset, up to a cap, and a predetermined downside buffer, based on the price returns of the reference asset, over a 1 year outcome period.

About Innovator Capital Management, LLC
Awarded 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™, 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. 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. Stacker ETFs™ are the world’s first ETFs to offer a multiple or “stacked” exposure to two or three benchmark index ETFs (SPY, QQQ, IWM) to a cap, with only downside exposure to the SPY over a one year outcome period. 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 S&P 500 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 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 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 Contact
Paul Damon
+1 (802) 999-5526
paul@keramas.net

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 as information relating to the potential outcomes of an investment in a Fund on a daily basis.

The Defined Outcome Funds that include a buffer objective 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.

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.

In the event an Outcome Period has begun and the underlying asset’s share price has increased in value, such an increase will be reflected in the value of the Fund’s purchased call option on the underlying assets. Accordingly, in the event that the underlying asset's share price were to subsequently decrease in value, that decrease would also be reflected in the value of that option, and therefore the Fund’s NAV. An investor that purchases Fund Shares after the underlying assets have increased in value during an Outcome Period may be negatively affected by future decreases during the remainder of the Outcome Period

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 detailed 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.

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 these funds’ investment objectives. Initial outcome periods are approximately 1-year beginning on the funds’ inception dates. 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.

Nasdaq® is a registered trademark of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and is licensed for use by Innovator Capital Management, LLC. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations.

THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).

The Innovator Russell 2000 Power Buffer ETF (the “Fund”) has been developed solely by Innovator Capital Management, LLC. The “Fund” is not in any way connected to or sponsored, endorsed, sold or promoted by the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. All rights in the Russell 2000 Index (the “Index”) vest in the relevant LSE Group company, which owns the Index. “FTSE®” “Russell®”, and “FTSE Russell®” are trade marks of the relevant LSE Group company and are used by any other LSE Group company under license.

The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Fund. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Index for the purpose to which it is being put by Innovator Capital Management, LLC.

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.

* 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.

** The shortlists and winners are comprised of individuals and firms who have submitted entries or been nominated via the online submission process, as well as through recommendations from leading market participants. Judges will judge the ETF categories and will use the submitted application material, as well as any uploaded supplemental information, to determine which firm, individual or product they believe to be the most suitable and deserving winners for each category.

*** 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. Defined Outcome ETFs are not backed by the faith and credit of an issuing institution, so they are not exposed to credit risk.

Innovator ETFs™, Defined Outcome ETF™, Buffer ETF™, Stacker ETF™, Accelerated ETFs™, 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 Definitions and context for these terms are as follows:
Illiquidity: Structured products are typically traded over the counter (OTC) and issuers of notes are not obligated to provide a bid to sellers. ETFs are exchange-traded, as the name implies, in real time, thus offering typically higher levels of liquidity versus OTC instruments.
Opacity: Most ETFs publicly disclose their holdings on a daily basis and, due to the exchange-traded nature of the funds, all issuers must publish for authorized participants lists of what securities a market maker must provide to an ETF to create new shares, or what securities they will receive if they redeem shares in an ETF, vice versa. Active ETFs that are not structured as semi-transparent must disclose all securities within the portfolio on a daily basis.
Surrender charges: A surrender charge is a fee that an investor in a structured product typically must pay if they elect to sell a note prior to an outcome period completion. ETFs do not have surrender charges.
Counterparty credit risk: Structured products are typically credit-linked instruments subject to the credit risk of their issuer. Should the issuer default, investors may receive nothing. Defined Outcome ETFs are comprised of options on a reference asset, and an investor in a Defined Outcome ETF owns the underlying options rather than a credit-linked instrument. The options underlying the Defined Outcome ETF are guaranteed for settlement by the Options Clearing Corporation, which was deemed a systematically important financial market utility by the U.S. Government. The Federal Reserve Board will intervene in the event of significant liquidity or stability issues, which there have been none since the OC’s inception in 1973. The Federal Reserve Board also holds SIFMUs to higher standards of risk management than a Federal Reserve Bank to service and maintain an account for them, and consults on their inspections.

2 AUM in all Innovator Defined Outcome ETFs as of 6.23.2021.

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 6.01.2021.

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.

 


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