On Thursday, Innovator Capital Management announced the launch of the latest in the series of international equity Buffer ETF suite on the NYSE with the listing of the April series of the MSCI international equity Power Buffer ETFs, the Innovator MSCI EAFE Power Buffer ETF (IAPR) and the Innovator MSCI Emerging Markets Power Buffer ETF (EAPR).
These funds are options-based strategies that seek to buffer the first 15% of potential losses in foreign developed market stocks, via EFA (iShares MSCI EAFE ETF) for IAPR and emerging market equities, and via EEM (iShares MSCI Emerging Markets ETF) for EAPR, while offering upside exposure to their reference asset, up to the cap listed below, over the coming 12-month period.
IAPR seeks to offer upside exposure to foreign developed markets stocks via EFA up to a cap, with a buffer against the first 15% of loss in EFA over the annual outcome period. EAPR seeks to offer upside exposure to emerging markets stocks via EEM up to a cap, with a buffer against the first 15% of loss in EEM over the annual outcome period.
Additionally, Innovator announced the upside caps and return profiles for the existing April series of the Defined Outcome Buffer ETFs, including the Innovator Nasdaq-100 Power Buffer ETF (NAPR), the Innovator Russell 2000 Power Buffer ETF (KAPR), and the S&P 500 Buffer ETFs (BAPR, PAPR, UAPR). The seven ETFs’ return profiles in the April Buffer ETF series will span the year from today, April 1st, 2021 to March 31st, 2022, aligning with many advisors’ quarterly rebalancing and portfolio management activities.
Return profiles for the Innovator Defined Outcome ETFs – April series, as of 4/01/21
|Ticker||Name||Buffer Level||Caps*||Outcome Period|
|NAPR||Innovator Nasdaq-100Power Buffer ETF™ – April||15.00%||10.38%||12 months4/01/21 – 3/31/22|
|KAPR||Innovator Russell 2000Power Buffer ETF™ – April||15.00%||11.15%||12 months4/01/21 – 3/31/22|
|IAPR||Innovator MSCI EAFEPower Buffer ETF™ – April||15.00%||9.50%||12 months4/01/21 – 3/31/22|
|EAPR||Innovator MSCI Emerging MarketsPower Buffer ETF™ – April||15.00%||13.00%||12 months4/01/21 – 3/31/22|
|BAPR||Innovator S&P 500Buffer ETF™ – April||9.00%||14.00%||12 months4/01/21 – 3/31/22|
|PAPR||Innovator S&P 500Power Buffer ETF™ – April||15.00%||8.55%||12 months4/01/21 – 3/31/22|
|UAPR||Innovator S&P 500Ultra Buffer ETF™ – April||30.00%(-5% to -35%)||6.38%||12 months4/01/21 – 3/31/22|
“Advisors who are concerned about equity market risks look to our Defined Outcome Buffer ETFs to provide investors participation in equities’ potential upside yet risk mitigation in the event stocks don’t continue their remarkable climb since the coronavirus rebound began,” said Bruce Bond, CEO of Innovator ETFs. “With five resets across Innovator’s Buffer ETFs, providing advisors with buffered exposure to core domestic equity markets, and two launches in our MSCI international equity Power Buffer ETF suite, the beginning of the second quarter is a big moment for the Defined Outcome ETF lineup.”
The April Power Buffer ETFs on the Nasdaq-100 (NAPR) and the Russell 2000 (KAPR) completed their first annual outcome period and reset at the end of the month. And the S&P 500 Buffer ETFs – Innovator S&P 500 Buffer ETF – April (BAPR), Innovator S&P 500 Power Buffer ETF™ – April (PAPR), and Innovator S&P 500 Ultra Buffer ETF – April (UAPR) completed their second annual outcome period.
Starting with the January series, in 2021, Innovator will be transitioning reference assets of the underlying options within its Defined Outcome 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 tax-efficient Buffer ETFs’ operational efficiencies 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.
For more information, visit www.innovatoretfs.com.
This article originally appeared on ETFTrends.com.