Innovator MSCI Emerging Markets Power Buffer ETF - July (EJUL)

Overview

The Innovator MSCI Emerging Markets Power Buffer ETF - July (EJUL) seeks to provide investors with returns that match the MSCI Emerging Markets Index, up to a predetermined cap, while buffering against a defined level of losses over a one-year period. It aims to provide downside protection with limited upside participation in the emerging markets.

Reputation and Reliability

Innovator Capital Management is known for its defined outcome ETFs, focusing on providing specific risk-return profiles. They have a generally positive reputation for innovation in the ETF space.

Management Expertise

Innovator's management team has experience in structured investments and ETF management, focusing on innovative investment strategies.

Goal

To provide specific buffered downside protection against losses in the MSCI Emerging Markets Index over a one-year period, while limiting upside participation.

Investment Approach and Strategy

Strategy: The ETF does not directly track the MSCI Emerging Markets Index. Instead, it uses a defined outcome strategy involving options to provide a buffer against a certain level of losses, up to a cap. It resets annually.

Composition The ETF's assets consist primarily of FLex Options and money market instruments, with the options designed to provide the defined outcome.

Market Share: EJUL's market share in the defined outcome emerging markets ETF segment is moderate, as this is a niche strategy within the broader emerging markets ETF landscape.

Total Net Assets (AUM): 27090000

Key Competitors

• FTCS
• AUGUST (AUGUST is a Placeholder value, since July based ETF's have reset or do not exist.)
• SEPTEMBER (SEPTEMBER is a Placeholder value, since July based ETF's have reset or do not exist.)

Competitive Landscape

The defined outcome ETF market is competitive, with various issuers offering similar buffered or capped strategies. EJUL competes on its specific buffer level and cap rate, as well as its underlying MSCI Emerging Markets exposure. A disadvantage is the cap on upside potential compared to standard emerging markets ETFs, while the advantage is the defined downside protection.

Historical Performance: Historical performance data is best analyzed in relation to the cap and buffer achieved in each specific one-year period. Performance varies depending on the MSCI Emerging Markets Index's performance during each period.

Benchmark Comparison: Comparing EJUL to the MSCI Emerging Markets Index involves understanding that EJUL will underperform the index in strongly positive years due to the cap and outperform in significantly negative years due to the buffer. In mildly positive or negative years, the performance will be tied to the cap and buffer strike points.

Expense Ratio: 0.79

Average Trading Volume

The average trading volume of EJUL is relatively low, indicating moderate liquidity.

Bid-Ask Spread

The bid-ask spread for EJUL can be wider than more liquid ETFs, potentially increasing trading costs.

Market Environment Factors

EJUL's performance is influenced by the overall performance of emerging market equities, global economic conditions, and investor sentiment towards risk assets. Changes in interest rates and currency fluctuations can also affect returns.

Growth Trajectory

Growth trends depend on investor demand for downside protection in emerging markets. Changes to the ETF typically involve resetting the cap and buffer levels annually.

Competitive Edge

EJUL's competitive advantage lies in its defined outcome strategy, offering investors a pre-determined level of downside protection and upside potential. This provides a more predictable risk-return profile compared to standard emerging market ETFs. The defined outcome strategy appeals to risk-averse investors looking for a specific range of potential outcomes. The targeted buffer and cap are set at the beginning of each annual period. They reset annually, making them attractive in volatile markets where downside protection is highly valued.

Volatility

EJUL's historical volatility is lower than the MSCI Emerging Markets Index due to the buffer. The cap, however, also reduces potential upside.

Market Risk

EJUL is subject to market risk associated with emerging market equities. Risks include economic instability, political uncertainty, and currency fluctuations in emerging market countries.

Ideal Investor Profile

The ideal investor is risk-averse and seeks downside protection in their emerging market exposure. It is suitable for investors who are willing to forgo some potential upside in exchange for a defined level of loss protection.

Market Risk

EJUL is best suited for investors with a short-term to medium-term investment horizon (one year) who prioritize downside protection over potential gains. It is suitable for those seeking to manage risk in their emerging market allocation.

The Innovator MSCI Emerging Markets Power Buffer ETF - July (EJUL) offers defined downside protection against losses in the MSCI Emerging Markets Index over a one-year period, limiting upside participation. Its appeal lies in the predictability of its risk-return profile, making it attractive to risk-averse investors. However, the cap on potential gains may limit returns in strongly performing markets. Due to resets, its historical performance is not indicative of future performance.

Data Sources:

• Innovator Capital Management
• ETF.com
• Morningstar

Disclaimers:

The data provided is for informational purposes only and should not be considered financial advice. Investment decisions should be made based on individual circumstances and after consulting with a qualified financial advisor. Market share data is estimated based on available information and may not be precise.