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

Overview

The Innovator MSCI Emerging Markets Power Buffer ETF - April (EAPR) is designed to provide a buffered exposure to the MSCI Emerging Markets Index, limiting downside risk over a one-year period while participating in potential gains up to a cap. It aims to protect against a specified level of losses while capturing upside potential.

Reputation and Reliability

Innovator Capital Management is known for its defined outcome ETFs, offering innovative strategies to manage risk and return.

Management Expertise

Innovator has a dedicated team experienced in structured investments and derivative strategies.

Goal

To provide investors with buffered exposure to the MSCI Emerging Markets Index, protecting against downside risk up to a specified buffer level while offering upside participation to a cap, over a defined one-year period.

Investment Approach and Strategy

Strategy: The ETF uses a 'defined outcome' strategy, employing FLEX options to create a payoff profile that buffers against losses to a certain level and caps potential gains over a specific outcome period.

Composition The ETF primarily holds FLEX options on the MSCI Emerging Markets Index. It may also hold a small allocation to cash or cash equivalents.

Market Share: EAPR has a niche market share within the defined outcome and emerging market ETF space.

Total Net Assets (AUM): 40720524.77

Key Competitors

• iShares Core MSCI Emerging Markets ETF (IEMG)
• Vanguard FTSE Emerging Markets ETF (VWO)
• Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE)

Competitive Landscape

The competitive landscape is dominated by large, broad-based emerging market ETFs. EAPR offers a unique downside protection strategy, which differentiates it from standard index-tracking ETFs. However, its capped upside and complexity may deter some investors, while IEMG and VWO offer broader exposure and higher liquidity.

Historical Performance: Historical performance depends on the outcome period and the performance of the MSCI Emerging Markets Index. The defined outcome strategy limits both upside and downside.

Benchmark Comparison: The ETF's performance should be compared to the MSCI Emerging Markets Index, considering the buffer and cap. During periods of high growth, the ETF will likely underperform, and during periods of decline, it will likely outperform up to the buffer.

Expense Ratio: 0.79

Average Trading Volume

The average trading volume of the ETF is relatively low, potentially leading to wider bid-ask spreads.

Bid-Ask Spread

The bid-ask spread can be wider compared to more liquid ETFs, reflecting the complexity of the underlying options and lower trading volume.

Market Environment Factors

Performance is heavily influenced by the performance of emerging market equities, global economic conditions, trade policies, and geopolitical events.

Growth Trajectory

Growth depends on investor demand for defined outcome products and the ETF's ability to deliver its stated buffer and cap. Changes to the buffer or cap levels would affect the fund's risk/reward profile.

Competitive Edge

EAPR's competitive advantage lies in its defined outcome strategy, providing downside protection with a capped upside. This is particularly attractive to risk-averse investors seeking exposure to emerging markets. The defined outcome approach allows investors to know the potential range of returns over a specific period. This differs from traditional emerging market ETFs that offer broad exposure without defined downside protection. The fund may be useful during times of volatility and uncertainty.

Volatility

The ETF's volatility should be lower than the MSCI Emerging Markets Index due to the downside buffer.

Market Risk

The ETF is exposed to emerging market risk, including currency fluctuations, political instability, and economic downturns. The capped upside also presents a risk of underperforming the index during strong market rallies.

Ideal Investor Profile

The ideal investor is risk-averse, seeks defined outcome investments, and wants exposure to emerging markets with a degree of downside protection. This ETF is suited for investors who are willing to forgo some potential upside in exchange for a capped downside.

Market Risk

EAPR is best suited for long-term investors with a defined investment horizon (one year) who prioritize capital preservation and are comfortable with capped upside potential.

The Innovator MSCI Emerging Markets Power Buffer ETF - April (EAPR) offers buffered exposure to the MSCI Emerging Markets Index over a one-year period, limiting downside risk while participating in potential gains up to a cap. It utilizes FLEX options to achieve its defined outcome. While it provides downside protection, the capped upside and lower liquidity are important considerations. This ETF is most suitable for risk-averse investors seeking defined outcome strategies within the emerging markets space.

• JUNE
• JULY
• AUGT
• EAXT
• KOCT

Data Sources:

• Innovator Capital Management Website
• ETF.com
• Morningstar

Disclaimers:

This analysis is for informational purposes only and should not be considered financial advice. Investment decisions should be based on individual circumstances and consultation with a qualified financial advisor. Market data is subject to change.