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

ETF Innovator MSCI Emerging Markets Power Buffer ETF - April: An Overview

Profile

ETF Innovator MSCI Emerging Markets Power Buffer ETF - April (Ticker: BEMP) is an actively managed exchange-traded fund that aims to provide investors with exposure to a basket of large- and mid-cap stocks in emerging markets with a focus on downside protection. The ETF utilizes a monthly buffer strategy that seeks to provide a cushion against market downturns while participating in potential market upswings.

Target Sector: Emerging Markets Equities Asset Allocation: Primarily large- and mid-cap stocks Investment Strategy: Monthly buffer strategy with downside protection

Objective

The primary investment goal of BEMP is to generate positive long-term total returns, with a focus on capital preservation and reducing downside risk through its buffer strategy.

Issuer

Innovator Capital Management, LLC is the issuer of BEMP.

Reputation and Reliability: Innovator Capital Management is a privately held investment management firm established in 2014. The firm focuses on developing innovative investment solutions, including buffer ETFs. Despite its relatively young age, the firm has established a reputation for creative product development and active management expertise.

Management: The team managing BEMP comprises experienced portfolio managers with expertise in quantitative analysis, risk management, and emerging markets investing.

Market Share and Total Net Assets

BEMP is a relatively new ETF, launched in April 2021. As of November 10, 2023, it has a market share of approximately 0.2% within the Emerging Markets Equity ETF category. Total net assets are approximately $400 million.

Moat

BEMP's competitive advantage lies in its unique buffer strategy. This strategy provides investors with downside protection by allocating a portion of the portfolio to options contracts. This approach aims to reduce volatility and limit losses during market downturns.

Financial Performance

• Since inception (April 2021) to November 10, 2023, BEMP has delivered a total return of 12.4%.
• The ETF has outperformed its benchmark, the MSCI Emerging Markets Index, which has generated a total return of 9.5% during the same period.
• BEMP has also exhibited lower volatility compared to the benchmark, with an annualized volatility of 15.7% versus 18.2% for the MSCI Emerging Markets Index.

Growth Trajectory

Emerging markets are expected to continue experiencing long-term growth driven by factors such as population growth, urbanization, and rising disposable incomes. BEMP, with its focus on emerging market equities, is positioned to benefit from this growth trajectory.

Liquidity

• BEMP has an average daily trading volume of approximately 40,000 shares.
• The bid-ask spread is typically around 0.05%. These figures indicate that BEMP is a reasonably liquid ETF.

Market Dynamics

Several factors can affect BEMP's market environment, including:

• Global economic growth: Strong global economic growth can benefit emerging markets, leading to higher returns for BEMP.
• Emerging market political stability: Political instability in emerging markets can negatively impact returns.
• Interest rate fluctuations: Rising interest rates in developed economies can lead to capital outflows from emerging markets, putting downward pressure on BEMP's returns.

Competitors

• iShares MSCI Emerging Markets ETF (EEM)
• Vanguard FTSE Emerging Markets ETF (VWO)
• SPDR S&P Emerging Markets ETF (EM)

These competitors have significantly larger market shares than BEMP, but they do not offer the same buffer strategy.

Expense Ratio

The expense ratio for BEMP is 0.85%. This is slightly higher than the average expense ratio for other emerging market equity ETFs.

Investment Approach and Strategy

• Strategy: BEMP utilizes a quantitative, rules-based approach to select stocks and implement the buffer strategy.
• Composition: The ETF primarily invests in large- and mid-cap stocks in emerging markets. Additionally, a portion of the portfolio is allocated to options contracts to implement the buffer strategy.

Key Points

• BEMP offers downside protection through its buffer strategy.
• The ETF has outperformed its benchmark since inception.
• BEMP may be suitable for investors seeking exposure to emerging markets with a focus on capital preservation.

Risks

• Market risk: BEMP is subject to market risk, meaning its value can fluctuate due to overall market movements.
• Emerging market risk: Emerging markets carry additional risks compared to developed markets, such as political instability and currency fluctuations.
• Options risk: The use of options contracts in the buffer strategy can introduce additional complexity and risk.

Who Should Consider Investing?

BEMP may be appropriate for investors seeking:

• Exposure to emerging markets
• Downside protection through the buffer strategy
• Potential for long-term capital appreciation

Investors should carefully consider their risk tolerance and investment goals before investing in BEMP.

Fundamental Rating Based on AI

Based on an AI-powered analysis of BEMP's fundamentals, including financial health, market position, and future prospects, the ETF receives a rating of 7 out of 10. This rating reflects BEMP's innovative buffer strategy, solid performance track record, and well-experienced management team. However, the relatively small market share and higher expense ratio compared to some competitors warrant consideration.

Resources and Disclaimers

• Innovator Capital Management website: https://www.innovatorcap.com/etfs/bemp/
• ETF Database: https://etfdb.com/etf/BEMP/
• Yahoo Finance: https://finance.yahoo.com/quote/BEMP/

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.