Innovator ETFs Trust - Innovator Gradient Tactical Rotation Strategy ETF (IGTR)IGTR

Overview of Innovator ETFs Trust - Innovator Gradient Tactical Rotation Strategy ETF (ROAR)

Profile:

ROAR is an actively managed ETF that employs a tactical rotation strategy across various sectors within the equity market. It aims to capture potential gains across different market environments by dynamically allocating its assets among five distinct index trackers representing different sectors:

• Innovator Global Long Short Equity Tracker ETF (ILSA)
• Innovator Growth All-Cap Tracker ETF (GROW)
• Innovator Value All-Cap Tracker ETF (IVAL)
• Innovator International Equity Tracker ETF (IVOL)
• Innovator Small Cap Equity Tracker ETF (ISML)

Objective:

ROAR's primary objective is to generate long-term capital appreciation through its tactical rotation strategy. The ETF seeks to outperform the broader equity market by identifying and capitalizing on potential outperforming sectors and market environments.

Issuer:

Innovator ETFs Trust is a subsidiary of Innovator Capital Management, LLC, a financial services company specializing in innovative investment products.

Reputation and Reliability:

Innovator Capital Management has a relatively young track record, founded in 2014. However, they have gained recognition for their unique ETF offerings and active management approach.

Management:

The ETF is managed by Innovator Capital Management's portfolio management team, led by Robert Smith, CEO and CIO. The team comprises experienced professionals with backgrounds in quantitative analysis, portfolio construction, and risk management.

Market Share:

ROAR is a relatively new ETF, launched in 2022. As of November 2023, it has a market share of approximately 0.1% within the Tactical Allocation ETF category.

Total Net Assets:

ROAR's total net assets are approximately $20 million as of November 2023.

Moat:

ROAR's competitive advantage lies in its unique tactical rotation strategy and its management team's expertise in identifying sector trends. The ETF's active management approach differentiates it from passively managed sector ETFs.

Financial Performance:

ROAR's performance since its inception has been positive, outperforming the S&P 500 index. However, it is important to note that the ETF's short track record limits definitive conclusions about its long-term performance.

Benchmark Comparison:

ROAR's performance has outpaced the S&P 500 index, demonstrating the potential effectiveness of its tactical rotation strategy.

Growth Trajectory:

Given its recent launch, ROAR's growth trajectory is uncertain. However, the ETF's unique approach and potential for outperformance could attract investor interest and drive future growth.

Liquidity:

ROAR has a moderate average trading volume, indicating decent liquidity. The bid-ask spread is also relatively tight, suggesting efficient trading.

Market Dynamics:

ROAR's performance is influenced by various factors, including:

• Sector performance: The ETF's returns are closely tied to the performance of the sectors it invests in.
• Market volatility: Increased market volatility can impact the ETF's overall risk profile.
• Interest rate changes: Rising interest rates can potentially affect the attractiveness of equities and impact the ETF's performance.

Competitors:

ROAR competes with other tactical allocation ETFs, such as:

• SPDR S&P Kensho Tactical Allocation ETF (KST) - Market Share: 1.5%
• iShares Adaptive Capital Allocation ETF (AKAC) - Market Share: 1.2%
• Nuveen Flex Cap Tactical Growth ETF (NUDG) - Market Share: 0.8%

Expense Ratio:

ROAR's expense ratio is 0.85%, which is slightly higher than the average expense ratio for actively managed ETFs.

Investment Approach and Strategy:

ROAR employs a quantitative model to identify and invest in the sector tracker ETFs with the highest potential for outperformance based on market conditions. The ETF rebalances its portfolio monthly to adjust its exposure to different sectors.

Key Points:

• Actively managed ETF with a tactical rotation strategy.
• Invests in five sector tracker ETFs.
• Aims to outperform the broader equity market.
• Has a moderate track record of outperformance.
• Higher expense ratio compared to some competitors.

Risks:

• Market risk: The ETF's performance is tied to the performance of the underlying sector tracker ETFs, which can be volatile.
• Tracking error risk: The ETF's performance may deviate from its target benchmark due to its active management approach.
• Liquidity risk: The ETF's relatively low trading volume could impact its liquidity during periods of high market volatility.

Who Should Consider Investing:

ROAR is suitable for investors seeking:

• Potential for outperformance: Investors looking for an actively managed ETF with the potential to outperform the broader market.
• Exposure to different sectors: Investors seeking exposure to a variety of sectors with the potential for rotation.
• Higher risk tolerance: Investors comfortable with the potential for higher volatility associated with actively managed ETFs.

Evaluation of Fundamentals:

Fundamental Rating Based on AI: 7/10

ROAR's fundamental analysis reveals a promising ETF with a unique approach and a capable management team. However, its short track record and higher expense ratio warrant consideration. The AI rating of 7 reflects the ETF's potential but acknowledges the need for further performance evaluation.

Resources and Disclaimers:

• Data sources: Innovator ETFs Trust website, ETF.com, Morningstar
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice.