Innovator Capital Management has launched the Innovator International Developed Power Buffer ETF – September (NYSE Arca: ISEP). The fund is part of Innovator’s lineup of Defined Outcome ETFs.
ISEP seeks to track the return of the iShares MSCI EAFE ETF up to a predetermined cap. It does this while buffering investors against the first 15% of losses over the outcome period. The ETF can be held indefinitely, resetting at the end of each outcome period, approximately annually.
Innovator Defined Outcome ETFs let investors take advantage of market growth while maintaining defined levels of buffers against loss. They’re as tax efficient as traditional ETFs due to a recent rule change allowing the in-kind trading of options.
The fund carries an expense ratio of 0.85%.
In March, Innovator announced the listing of four income-focused Defined Outcome ETFs. The Innovator Premium Income Barrier ETFs to offer fixed rates of high income with protective barriers against decline in the S&P 500 over a one-year period.
“Innovator continues to make it easier for advisors to better control outcomes in client portfolios using ETFs,” said Todd Rosenbluth, head of research at VettaFi. “Many advisors have been successfully using buffer ETFs to limit the downside, but these new ETFs will provide an income alternative to bond ETFs without credit or duration risk.”
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