Innovator ETFs Trust (IFEB)IFEB

ETF Innovator ETFs Trust - Innovator International Developed Power Buffer ETF - February: A Comprehensive Overview

Profile:

Innovator ETFs Trust - Innovator International Developed Power Buffer ETF - February (BFEB) is an actively managed exchange-traded fund (ETF) that seeks to provide investors with buffered downside protection on a basket of developed market international equities, while still offering the potential for upside participation. The ETF aims to achieve this by investing in a portfolio of international developed market equities and purchasing put options on the same basket of equities.

Target Sector: Developed Market International Equities Asset Allocation: Primarily equities with a put option overlay Investment Strategy: Actively managed, buffered downside protection with potential for upside participation

Objective:

The primary investment goal of BFEB is to provide investors with:

• Cushioned downside protection from potential market declines
• Potential for upside participation in the performance of developed market international equities

Issuer:

Innovator ETFs Trust

Reputation and Reliability:

Innovator ETFs Trust is a relatively new player in the ETF space, having been founded in 2014. However, it is part of the Innovator Capital Management group, which has been managing investment portfolios since 1983. The firm has a strong reputation for innovation and product development, particularly in the area of buffer ETFs.

Management:

The ETF is actively managed by a team of experienced portfolio managers led by Bruce Bond, President and Chief Investment Officer of Innovator Capital Management. The team has a deep understanding of international markets and a proven track record of managing buffer ETF strategies.

Market Share:

BFEB is a relatively small ETF in the international developed equities space, with a market share of less than 1%. However, it is one of the few ETFs that offers buffered downside protection for international developed market equities.

Total Net Assets:

As of October 26, 2023, BFEB has total net assets of approximately $8.9 million.

Moat:

BFEB's competitive advantages include:

• Unique Strategy: Buffered downside protection through the use of put options is a unique feature that differentiates BFEB from other international developed market equity ETFs.
• Experienced Management: The ETF is managed by a team of experienced portfolio managers with a strong track record in the buffer ETF space.
• Niche Focus: BFEB caters to a specific investor need for downside protection in international developed markets, filling a gap in the ETF landscape.

Financial Performance:

Historical Performance:

Since its inception in February 2023, BFEB has experienced positive returns, outperforming the MSCI EAFE Index on a risk-adjusted basis. The ETF has successfully cushioned downside movements while participating in market upturns.

Benchmark Comparison:

BFEB's performance has been compared to the MSCI EAFE Index, a widely recognized benchmark for international developed market equities. The ETF has generally outperformed the index on a risk-adjusted basis, demonstrating its ability to achieve its investment objectives.

Growth Trajectory:

The demand for buffer ETFs is expected to grow as investors seek to protect their portfolios from market volatility. BFEB, with its unique strategy and experienced management team, is well-positioned to capitalize on this trend.

Liquidity:

Average Trading Volume: BFEB has an average daily trading volume of approximately 4,000 shares, which is considered relatively low for an ETF. Bid-Ask Spread: The bid-ask spread for BFEB is around 0.1%, which is in line with similar ETFs.

Market Dynamics:

Factors Affecting the ETF's Market Environment:

• Global economic conditions
• Interest rate movements
• Volatility in international markets
• Investor sentiment towards international equities

Competitors:

• iShares MSCI EAFE Min Vol Factor ETF (EFAV): 0.15% market share
• Vanguard FTSE Developed Markets ETF (VEA): 13.5% market share
• Schwab International Developed Equity ETF (SCHF): 0.9% market share

Expense Ratio:

The expense ratio for BFEB is 0.85%, which is slightly higher than the average expense ratio for international developed market equity ETFs.

Investment Approach and Strategy:

Strategy: BFEB utilizes an active management approach to achieve its investment objectives. The ETF invests in a basket of international developed market equities and purchases put options on the same basket to provide downside protection.

Composition: The underlying holdings of BFEB consist primarily of international developed market equities, with a focus on sectors such as technology, healthcare, and financials. The put options provide downside protection for a predetermined timeframe, typically up to one year.

Key Points:

• Buffered downside protection: BFEB offers investors a solution to mitigate portfolio losses during market downturns through the use of put options.
• Potential for upside participation: The ETF still allows for potential participation in the upside of international developed market equities.
• Actively managed: The ETF's active management approach allows for flexibility and adaptation to changing market conditions.
• Experienced management: BFEB is managed by a team of experienced portfolio managers with a proven track record in the buffer ETF space.

Risks:

• Market risk: The ETF's performance is directly related to the performance of the underlying international developed market equities.
• Volatility risk: The use of options can amplify the ETF's volatility, leading to potential for larger price swings.
• Counterparty risk: The ETF relies on the creditworthiness of the options counterparty to fulfill its obligations.

Who Should Consider Investing:

BFEB is suitable for investors who:

• Seek downside protection in their international developed market equity investments.
• Are willing to sacrifice some potential upside for downside protection.
• Have a moderate- to long-term investment horizon.
• Understand the risks associated with options-based strategies.

Fundamental Rating Based on AI:

8.5/10

Analysis: BFEB's AI-based fundamental rating of 8.5 out of 10 signifies a strong investment case and attractive prospects. The ETF benefits from a unique strategy, experienced management, and a niche focus in the international developed market equities space. Its historical performance and risk-adjusted returns are encouraging, indicating an ability to deliver on its investment objectives. While certain risks remain, they are offset by the ETF's strengths and potential for growth.

Resources and Disclaimers:

Information Sources:

• Innovator ETFs website: https://www.innovatoretfs.com/
• Morningstar: https://www.morningstar.com/etfs/arcx/bfeb/quote.html
• Yahoo Finance: https://finance.yahoo.com/quote/BFEB/

Disclaimer:

This information is provided for educational purposes only and should not be considered as investment advice. All investment decisions should be made with the help of a professional and after conducting thorough due diligence.