Innovator MSCI Emerging Markets Power Buffer ETF - April (EAPR)

Overview

The Innovator MSCI Emerging Markets Power Buffer ETF - April (EMAP) seeks to provide investors with buffered exposure to the MSCI Emerging Markets Index, protecting against the first 10% of losses each year, while forgoing unlimited upside potential.

Reputation and Reliability

Innovator Capital Management is known for its defined outcome ETFs, focusing on strategies that offer downside protection with capped upside.

Management Expertise

Innovator's management team has experience in structuring and managing defined outcome ETFs, which require specific expertise in options strategies.

Goal

To provide buffered exposure to the MSCI Emerging Markets Index, mitigating downside risk while accepting capped upside potential.

Investment Approach and Strategy

Strategy: The ETF employs a defined outcome strategy using FLEX options to provide a buffer against losses while capping potential gains. It does not directly track the index but seeks to provide a specific return profile.

Composition The ETF primarily holds FLEX options on the MSCI Emerging Markets Index.

Market Share: EMAP's market share within the defined outcome emerging markets ETF category is relatively small compared to broad emerging market ETFs.

Total Net Assets (AUM): 51620000

Key Competitors

• EEM
• VWO
• IEMG

Competitive Landscape

The ETF industry is highly competitive, with numerous providers offering similar investment strategies. EMAP differentiates itself through its defined outcome approach, which may appeal to risk-averse investors but it has lower upside. Compared to traditional emerging markets ETFs, EMAP offers downside protection, but this comes at the cost of capped gains. The main advantage is the buffered return profile, the disadvantage is the opportunity cost of missing significant upside.

Historical Performance: Historical performance varies depending on the specific period and market conditions. Defined outcome ETFs often underperform in strong bull markets but outperform in bear markets.

Benchmark Comparison: The ETF's performance is expected to deviate from the MSCI Emerging Markets Index due to its buffered and capped return profile.

Expense Ratio: 0.79

Average Trading Volume

The ETF's liquidity is moderate, indicating that it trades multiple times on a daily basis.

Bid-Ask Spread

The bid-ask spread may vary depending on market conditions and trading volume, which will be a significant cost to consider while trading the ETFs.

Market Environment Factors

Economic growth in emerging markets, global trade policies, and investor sentiment towards risk are all factors affecting EMAP's performance.

Growth Trajectory

Growth depends on investor demand for defined outcome strategies and the performance of the underlying MSCI Emerging Markets Index.

Competitive Edge

EMAP's competitive advantage lies in its defined outcome strategy, offering investors a specific level of downside protection. This buffered approach can attract investors seeking to limit losses in volatile markets. The ETF targets a niche segment of the market focused on risk management. This differentiation allows it to stand out from traditional market-cap-weighted emerging market ETFs and appeal to investors with specific risk tolerance levels.

Volatility

Volatility is expected to be lower than the MSCI Emerging Markets Index due to the buffer, but the capped upside can also limit returns during bull markets.

Market Risk

EMAP is subject to the market risk of the underlying MSCI Emerging Markets Index, including political and economic risks in emerging markets.

Ideal Investor Profile

The ideal investor is risk-averse and seeking downside protection in their emerging market allocation.

Market Risk

EMAP is best suited for investors seeking to manage risk and limit potential losses, even if it means sacrificing some upside potential.

Innovator MSCI Emerging Markets Power Buffer ETF - April offers a buffered investment strategy designed to protect against the first 10% of losses within a year while capping potential gains. Its innovative approach caters to risk-averse investors seeking downside protection in the volatile emerging markets. Compared to traditional emerging market ETFs, EMAP provides a distinct risk-return profile. The fund's effectiveness depends on market conditions and its ability to deliver the defined outcome. While the expense ratio is higher than typical ETFs, the potential buffer is its key selling point.

Data Sources:

• Innovator Capital Management Website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investment decisions should be made in consultation with a qualified financial advisor.