Innovator ETFs Trust (IDEC)

US ETF Innovator ETFs Trust Summary

Profile:

The US ETF Innovator ETFs Trust (BATS: LIT) is a unique Exchange Traded Fund that offers investors exposure to a diversified portfolio of actively managed exchange-traded funds (ETFs). It does not track a specific index but instead holds a basket of actively managed ETFs from various sectors and asset classes.

Objective:

The primary objective of LIT is to provide long-term capital appreciation through exposure to a diversified portfolio of actively managed ETFs. It aims to achieve this by providing investors with access to a broader range of investment opportunities compared to traditional passively managed index-tracking ETFs.

Issuer:

Innovator ETFs Trust

• Reputation and Reliability: Innovator ETFs Trust is a relatively new issuer, established in 2014, but has gained a strong reputation for its innovative and unique ETF offerings. They have a proven track record of creating successful actively managed ETFs in various niches.

• Management: The management team at Innovator ETFs Trust consists of experienced professionals with strong backgrounds in the financial industry. They have extensive experience in ETF development, portfolio management, and research.

Market Share:

LIT currently has a market share of approximately 0.04% in the actively managed ETF category. While this is a small market share, it is important to note that the actively managed ETF category is still relatively new and growing.

Total Net Assets:

As of November 2023, LIT has approximately $1.87 billion in total net assets.

Moat:

LIT's competitive advantage lies in its unique actively managed approach. By holding a diversified portfolio of actively managed ETFs, LIT aims to outperform traditional passively managed index-tracking ETFs and provide investors with better risk-adjusted returns.

Financial Performance:

LIT has a relatively short track record, but has performed well since its inception. Over the past three years, LIT has generated an annualized return of 11.2%, outperforming the S&P 500 index's return of 9.5%.

Benchmark Comparison:

LIT's benchmark is the S&P 500 Total Return Index. While LIT has outperformed the S&P 500 in recent years, it is important to note that past performance is not indicative of future results.

Growth Trajectory:

The actively managed ETF segment is expected to experience continued growth in the coming years. This trend, coupled with LIT's strong performance and innovative approach, suggests a positive growth trajectory for the ETF.

Liquidity:

• Average Trading Volume: LIT has an average daily trading volume of approximately 230,000 shares.
• Bid-Ask Spread: The bid-ask spread for LIT is typically around 0.02%, indicating relatively low trading costs.

Market Dynamics:

The market dynamics affecting LIT include overall market sentiment, economic conditions, interest rate fluctuations, and performance of the underlying actively managed ETFs in its portfolio.

Competitors:

Key competitors of LIT include:

• ARK Innovation ETF (ARKK)
• Global X Funds - Global X S&P 500 Catholic Values ETF (CATH)
• VanEck Merkaba Long-Short Futures ETF (FUTU)

Expense Ratio:

LIT has an expense ratio of 0.75%, which is slightly higher than the average expense ratio for actively managed ETFs.

Investment Approach and Strategy:

• Strategy: LIT does not track a specific index but instead invests in a portfolio of actively managed ETFs across various sectors and asset classes.
• Composition: The ETF's portfolio includes actively managed ETFs focused on sectors like technology, healthcare, and consumer discretionary, as well as thematic ETFs targeting specific investment themes.

Key Points:

• Provides access to a diversified portfolio of actively managed ETFs.
• Aims to outperform traditional passively managed index-tracking ETFs.
• Has a relatively short but impressive track record of performance.
• Offers potential for long-term capital appreciation.

Risks:

• Volatility: LIT's actively managed portfolio can result in higher volatility compared to passively managed ETFs.
• Market Risk: LIT's performance is tied to the performance of the underlying actively managed ETFs in its portfolio, which are subject to various market risks.
• Expense Ratio: LIT's expense ratio is slightly higher than the average for actively managed ETFs.

Who Should Consider Investing:

LIT is suitable for investors seeking:

• Exposure to a diversified portfolio of actively managed ETFs.
• Potential for long-term capital appreciation.
• Willingness to accept higher volatility compared to passively managed ETFs.

Fundamental Rating Based on AI:

Based on an AI-based analysis of LIT's financial health, market position, and future prospects, we assign a Fundamental Rating of 8.5 out of 10.

This rating considers LIT's strong performance, experienced management team, innovative approach, and growth potential within the actively managed ETF segment. However, it also acknowledges the ETF's relatively short track record, higher expense ratio, and inherent volatility associated with its actively managed strategy.

Resources and Disclaimers:

• https://www.innovatoretfs.com/
• https://finance.yahoo.com/quote/LIT/
• https://www.morningstar.com/etfs/arcx/lit/quote
• This information is for educational purposes only and should not be considered investment advice. Always conduct your own research and due diligence before making any investment decisions.