Innovator ETFs Trust - Innovator IBD Breakout Opportunities ETF (BOUT)

ETF Innovator ETFs Trust - Innovator IBD Breakout Opportunities ETF (BOUT)

Profile:

BOUT is an actively managed ETF that seeks to capture short-term gains by investing in stocks identified by Investor's Business Daily (IBD) as having high breakout potential. The ETF primarily focuses on US-listed equities across various sectors and industries. It utilizes a quantitative methodology to select stocks with strong technical and fundamental characteristics, including positive earnings revisions, strong relative price strength, and high accumulation by institutions. BOUT typically holds around 50-75 stocks.

Objective:

The primary investment goal of BOUT is to achieve capital appreciation by investing in stocks with strong breakout potential.

Issuer:

Innovator ETFs Trust:

• Reputation: Innovator ETFs Trust is a relatively young and small issuer compared to larger and more established ETF providers.
• Reliability: While it has a limited track record, Innovator ETFs Trust leverages the expertise and research of Investor's Business Daily (IBD), a renowned financial media company with a strong reputation for analyzing stock trends.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in quantitative analysis and active management strategies.

Market Share:

BOUT accounts for a small market share within the actively managed ETF space, focusing on breakout stocks. It is difficult to provide an exact percentage due to the dynamic nature of the ETF market.

Total Net Assets:

As of November 2023, BOUT has approximately $240 million in total net assets.

Moat:

BOUT's competitive advantage lies in its unique investment strategy utilizing IBD's proven stock selection methodology and its focus on breakout opportunities. This approach aims to identify stocks poised for significant price increases in the short term, potentially outperforming the broader market.

Financial Performance:

Historical Performance: BOUT has a relatively short track record, launched in 2021. Its performance has varied depending on market conditions.

Benchmark Comparison: BOUT has generally outperformed the S&P 500 index since its inception but has also experienced periods of underperformance.

Growth Trajectory:

BOUT's growth trajectory is difficult to predict due to its short history and dependence on market volatility and breakout opportunities. However, the increasing demand for actively managed strategies focusing on short-term gains could contribute to its future growth.

Liquidity:

Average Trading Volume: BOUT has an average daily trading volume of approximately 200,000 shares. Bid-Ask Spread: The bid-ask spread for BOUT is typically around $0.05.

Market Dynamics:

BOUT's market environment is influenced by various factors, including:

• Economic indicators: Strong economic growth can positively impact breakout opportunities.
• Sector growth prospects: BOUT's performance may be influenced by the growth prospects of the sectors in which it invests.
• Market volatility: Periods of high market volatility can create more breakout opportunities but also increase risk.

Competitors:

• VanEck Merkaba Long Short ETF (LREN): Market share: 0.5%
• SPDR S&P 500 Growth ETF (SPYG): Market share: 1.2%
• iShares S&P 500 Value ETF (IVE): Market share: 1.5%

Expense Ratio:

The expense ratio for BOUT is 0.79%.

Investment Approach and Strategy:

Strategy: BOUT utilizes an active management strategy based on IBD's proprietary stock selection methodology. It does not track a specific index. Composition: The ETF primarily invests in US equities across various sectors. Its portfolio turnover is typically high due to its focus on short-term opportunities.

Key Points:

• Actively managed ETF focusing on breakout stocks with potential for short-term gains.
• Utilizes IBD's stock selection methodology for identifying potential breakout opportunities.
• Relatively young and small ETF with limited track record.
• Higher expense ratio compared to some passively managed ETFs.

Risks:

• Volatility: BOUT's focus on breakout stocks exposes it to higher volatility than the broader market.
• Market Risk: The ETF's performance is dependent on the performance of the underlying stocks, which can be affected by various market factors.
• Active Management Risk: The success of BOUT's strategy relies heavily on the effectiveness of IBD's stock selection methodology and the management team's ability to implement it.

Who Should Consider Investing:

BOUT is suitable for investors:

• Seeking short-term capital appreciation through exposure to breakout stocks.
• Comfortable with higher volatility and risk associated with active management strategies.
• Believing in IBD's stock selection methodology and its potential to identify breakout opportunities.

Fundamental Rating Based on AI:

7.5/10

Justification: BOUT's unique strategy, leveraging IBD's expertise, has the potential to outperform the market. However, its short track record, higher expense ratio, and reliance on market volatility limit its overall rating.

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.

Resources:

• ETF.com: https://etf.com/BOUT
• Innovator ETFs Trust: https://www.innovatoretfs.com/etf/bout/
• Investor's Business Daily: https://www.investors.com/research/breakout-stocks