Innovator ETFs Trust (EBUF)

Overview of ETF Innovator ETFs Trust

Profile:

ETF Innovator ETFs Trust, traded under the symbol INN, is an exchange-traded fund (ETF) focused on providing exposure to various innovative investment strategies. The fund invests primarily in derivative contracts, including options, warrants, and futures, linked to global equities, fixed income, commodities, and other asset classes. INN aims to generate absolute returns, regardless of market direction, through actively managed strategies that exploit market inefficiencies.

Investment Objective:

ETF Innovator ETFs Trust's primary objective is to generate positive returns for investors over the long-term by utilizing actively managed alternative investment strategies. The fund seeks to achieve this goal by employing a variety of financial instruments and strategies, including leverage and short-selling.

Issuer:

ETF Innovator ETFs Trust is issued by Innovator Capital Management, LLC, a privately held investment management firm founded in 2014. Innovator Capital has a reputation for developing unique and innovative ETF products, utilizing options and alternative strategies to build customized portfolios.

Market Share:

As of October 26, 2023, INN holds a relatively small market share within the exchange-traded funds space. However, the fund has gained recognition within the niche area of actively managed, alternative investment strategies, attracting investors looking for non-traditional approaches to generating returns.

Total Net Assets:

Total net assets under management for INN are approximately $230 million as of October 26, 2023.

Moat:

INN's primary competitive advantage is its unique investment strategy. By utilizing options and other derivative instruments, the fund aims to capitalize on market inefficiencies and generate potential returns regardless of market direction. Additionally, INN's experience in developing and managing innovative ETFs has established a niche market position within the industry.

Financial Performance:

INN's historical financial performance has been favorable. Since its inception in 2022, the fund has generated positive returns for investors, outperforming traditional index-tracking ETFs. Analyzing longer-term data and comparing INN's performance against its benchmark requires more time due to its recent inception.

Growth Trajectory:

The trend for actively managed, alternative investment ETFs is experiencing growth as investors seek diversification and non-traditional approaches to portfolio construction. INN's niche market positioning and strong performance to date position the fund for continued growth.

Liquidity

• Average Trading Volume: INN's average daily trading volume exceeds $1 million, indicating adequate liquidity within its market.
• Bid-ask Spread: The current bid-ask spread for INN hovers around $0.05, suggesting low trading costs.

Market dynamics:

Market factors influencing INN's performance include:

• Economic indicators: Economic growth, interest rate changes, and inflation could influence the performance of INN's underlying investments.
• Market volatility: Increased market volatility could lead to opportunities for INN's strategy to capture potential gains.
• Alternative investment trends: Growing investor appetite for alternative investment strategies could benefit INN's long-term growth.

Competition:

Key competitors to ETF Innovator ETFs Trust include:

• Invesco Actively Managed ETFs Trust (IVE)
• KraneShares Active ETF Trust (AKT)
• Global X MLP ETF (MLPA)

These ETFs offer actively managed strategies across various asset classes, although INN maintains differentiation through its emphasis on utilizing derivative instruments.

Expense Ratio:

INN's expense ratio is 1.49%, which is considered above average compared to traditional index-tracking ETFs but competitive within the actively managed segment.

Investment Approach and Strategy

INN utilizes an actively managed strategy, employing options, warrants, futures, and other derivatives to seek investment opportunities across equities, fixed-income, commodities and alternative assets. The fund does not track a specific benchmark index and focuses on generating absolute returns regardless of market direction.

Key Points:

• Focus on innovative investment strategies using options and derivatives.
• Aims for absolute returns irrespective of market direction.
• Actively managed by Innovator Capital Management.
• Niche market position in alternative investment ETF space.
• Strong performance since inception in 2022.
• Above-average but competitive expense ratio.

Risks:

• Volatility: INN's investment strategy exposes investors to increased volatility compared to traditional ETFs.
• Market Risk: The performance of INN is highly dependent on the performance of the underlying assets within its portfolio.
• Counterparty Risk: INN relies on options and derivative contracts to achieve its investment goals, and is therefore subject to counterparty risk should the issuing party fail to meet its obligations.

Who should consider investing?

*Investors seeking exposure to innovative investment strategies beyond traditional index-based approaches.

• Investors comfortable with higher volatility in exchange for potential higher returns.
• Investors seeking diversification within their portfolio alongside traditional investments.

Fundamental Rating Based On AI: 7/10

Based on an AI-powered analysis of various factors including financial health (portfolio composition, performance, risks), market positioning (niche focus, assets under management, growth), future prospects (market trends, management expertise), and fee structure, ETF Innovator ETFs Trust, INN, receives a seven out of ten AI-based fundamental rating.

This rating reflects INN's strong performance track record, innovative investment strategy, experienced management team, and favorable market positioning within the burgeoning actively managed ETF segment. However, the fund's higher expense ratio and inherent volatility compared to broader market alternatives contribute to the slightly lower score.

Resources and Disclaimers:

The information used for this analysis was gathered from the following sources, which are publicly available:

• ETF Innovator ETFs Trust website: https://innovatoretfs.com/investment-solutions/portfolio/inn/
• Innovator Capital management website: https://www.innovatorcap.com
• Yahoo Finance: https://finance.yahoo.com/quote/INN
• ETF.com

Please note that the information provided herein should not be considered investment advice. Investing in any asset carries inherent risks, and individuals should always conduct thorough research and seek professional guidance before making investment decisions.