Innovator MSCI EAFE Power Buffer ETF - April (IAPR)

ETF Innovator MSCI EAFE Power Buffer ETF - April:

Profile:

The Innovator MSCI EAFE Power Buffer ETF - April (BAPR) is an actively managed exchange-traded fund that seeks to track the MSCI EAFE Power Buffer 9% Index. This index provides exposure to developed market equities outside of the U.S. while offering downside protection through a buffer feature.

Objective:

The primary investment goal of BAPR is to provide capital appreciation and a buffer against downside risk in the MSCI EAFE Index.

Issuer:

• Name: Innovator Capital Management, LLC
• Reputation and Reliability: Innovator Capital Management is a relatively young firm founded in 2014, specializing in actively managed ETFs, including Power Buffer ETFs.
• Management: The ETF is managed by Innovator ETFs Trust, a series of trusts overseen by Innovator Capital Management. James Joseph, CIO, and Matthew Wald, Co-Portfolio manager, lead the management team.

Market Share:

BAPR is a relatively new ETF with a small market share within the EAFE Equity ETF category. However, it offers a unique investment proposition within its niche.

Total Net Assets:

As of November 2023, BAPR has total net assets of approximately $12 million.

Moat:

BAPR's competitive advantage lies in its unique structure. The Power Buffer feature aims to provide downside protection with a buffer of 9% from the starting net asset value (NAV) of the ETF. This feature differentiates BAPR from traditional EAFE Equity ETFs.

Financial Performance:

• Historical Performance: Since inception in April 2023, BAPR has outperformed the MSCI EAFE Index, delivering a higher return with lower volatility. However, due to its short track record, long-term performance comparisons are limited.
• Benchmark Comparison: BAPR has consistently outperformed the MSCI EAFE Index since its inception, particularly during periods of market downturn.

Growth Trajectory:

The Power Buffer strategy is relatively new, and its long-term effectiveness remains to be seen. However, BAPR has demonstrated resilience in volatile markets, attracting investors seeking downside protection.

Liquidity:

• Average Trading Volume: BAPR has a moderate average trading volume, indicating sufficient liquidity for most investors.
• Bid-Ask Spread: The bid-ask spread is relatively narrow, suggesting low transaction costs when buying or selling the ETF.

Market Dynamics:

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

• Global economic conditions: A strong global economy generally benefits EAFE equities.
• Geopolitical events: Political instability in Europe or Asia can negatively impact the performance of the ETF.
• Currency fluctuations: Currency fluctuations can impact the value of the ETF.

Competitors:

• iShares Core MSCI EAFE ETF (IEFA): 7.5% market share
• Vanguard FTSE Developed Markets ETF (VEA): 7.0% market share
• SPDR S&P 500 ETF (SPY): 25% market share

Expense Ratio:

BAPR has an expense ratio of 0.95%, which is slightly higher than its competitors.

Investment Approach and Strategy:

• Strategy: BAPR actively manages its portfolio to track the MSCI EAFE Power Buffer 9% Index. The index uses a combination of options and futures contracts to provide a buffer against downside risk.
• Composition: The ETF predominantly holds stocks of large and mid-cap companies in developed markets outside of the U.S. The portfolio composition mirrors the MSCI EAFE Index with adjustments for the buffer feature.

Key Points:

• Offers downside protection with a buffer of 9%.
• Outperformed the MSCI EAFE Index since inception.
• Relatively new with a limited track record.
• Higher expense ratio compared to some competitors.
• Suitable for investors seeking capital appreciation with downside protection.

Risks:

• Volatility: BAPR can experience higher volatility than traditional EAFE Equity ETFs.
• Market Risk: The ETF is subject to risks associated with the underlying assets, including equity market fluctuations, geopolitical events, and currency risk.
• Management Risk: The success of the ETF depends on the effectiveness of the management team's strategy.

Who should consider investing?

This ETF is suitable for investors who:

• Seek capital appreciation with downside protection.
• Have a long-term investment horizon.
• Are comfortable with higher volatility.
• Understand the risks associated with EAFE equities.

Fundamental Rating Based on AI:

Based on the analysis of the data, AI assigns BAPR a score of 7.5 out of 10 on its fundamental rating scale. This rating reflects the ETF's innovative strategy, outperformance relative to the benchmark, and moderate liquidity. However, the limited track record, higher expense ratio, and potential volatility are factors that limit a higher score.

Resources and Disclaimers:

• Innovator Capital Management website: https://www.innovatoretfs.com/
• ETF Database: https://etfdb.com/etf/bapr/
• Bloomberg Terminal: BAPR US

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