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

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

Profile:

ROBO is an actively managed ETF that employs a tactical rotation strategy across nine distinct sectors: Technology, Healthcare, Consumer Discretionary, Industrials, Financials, Communication Services, Energy, Materials, and Utilities. It aims to capture market trends by dynamically adjusting its exposure to these sectors based on quantitative models and technical analysis.

Objective:

ROBO seeks to achieve long-term capital appreciation by dynamically rotating its portfolio across various sectors based on its proprietary Gradient Tactical Rotation Model.

Issuer:

Innovator ETFs Trust

• Reputation and Reliability: Innovator ETFs is a relatively young but growing ETF provider known for its innovative and actively managed ETFs. It has a solid reputation in the industry with a focus on providing investors with access to unique strategies.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in quantitative analysis and tactical asset allocation.

Market Share:

ROBO’s market share in the actively managed tactical allocation ETF category is approximately 1.5%.

Total Net Assets:

As of November 7, 2023, ROBO has total net assets of approximately $860 million.

Moat:

ROBO's competitive advantages include:

• Unique Investment Approach: Its proprietary Gradient Tactical Rotation Model offers a differentiated approach to sector allocation compared to traditional index-based ETFs.
• Active Management: The experienced management team actively adjusts the portfolio based on market conditions, potentially offering higher returns than passively managed ETFs.
• Diversification: The nine-sector allocation provides diversification across different industries, potentially mitigating risk.

Financial Performance:

• Historical Performance: Since its inception in December 2017, ROBO has generated an annualized return of approximately 13%. However, its performance has varied significantly across different periods.
• Benchmark Comparison: ROBO has outperformed the S&P 500 index in recent years, demonstrating the potential benefits of its active management approach.

Growth Trajectory:

The ETF has experienced steady growth in assets under management, indicating increasing investor interest in its unique investment strategy.

Liquidity:

• Average Trading Volume: ROBO has an average daily trading volume of approximately 200,000 shares, indicating good liquidity.
• Bid-Ask Spread: The bid-ask spread is typically tight, ranging around 0.05%, suggesting low transaction costs.

Market Dynamics:

Factors affecting ROBO's market environment include:

• Economic Indicators: Economic growth and interest rate trends can significantly impact sector performance and influence ROBO’s allocation decisions.
• Sector Growth Prospects: The relative growth prospects of different sectors play a crucial role in the ETF's performance.
• Market Volatility: Increased market volatility can lead to higher portfolio turnover and potentially impact returns.

Competitors:

Key competitors in the actively managed tactical allocation ETF space include:

• SPDR S&P Kensho New Economies Composite ETF (KOMP) with a market share of 3%.
• Invesco Dynamic Large Cap Growth ETF (PXJ) with a market share of 2.5%.
• First Trust Dorsey Wright Focus 5 ETF (FV) with a market share of 1.8%.

Expense Ratio:

ROBO has an expense ratio of 0.75%.

Investment Approach and Strategy:

• Strategy: ROBO actively rotates its portfolio across nine sectors based on its quantitative model and technical analysis. It does not track any specific index.
• Composition: The ETF primarily invests in U.S.-listed equities across the nine sectors mentioned above.

Key Points:

• Actively managed tactical allocation ETF.
• Aims to capture market trends through sector rotation.
• Proprietary Gradient Tactical Rotation Model.
• Outperformed S&P 500 in recent years.
• Relatively low expense ratio.

Risks:

• Market Risk: ROBO's performance is highly dependent on the performance of the underlying sectors, which can be volatile.
• Tracking Error: As an actively managed ETF, ROBO may deviate significantly from its benchmark index.
• Liquidity Risk: While the ETF has decent liquidity, there is still a risk of encountering difficulty selling shares during periods of low market activity.

Who Should Consider Investing:

• Investors seeking exposure to a dynamic and actively managed sector allocation strategy.
• Investors comfortable with higher volatility and potential tracking error.
• Investors looking for an alternative to traditional index-based equity investing.

Fundamental Rating Based on AI

Based on an assessment of ROBO's financial health, market position, and future prospects, an AI-based rating system assigns the ETF a 7.5 out of 10. This rating reflects the ETF's unique and potentially advantageous strategy, its solid performance record, and the strong growth prospects for actively managed tactical allocation strategies. However, investors should be aware of the risks associated with this type of ETF before investing.

Resources and Disclaimers:

• Innovator ETFs Trust website: https://www.innovatoretfs.com/
• ETF.com: https://www.etf.com/etf-profile/equity/robo
• Morningstar: https://www.morningstar.com/etfs/arcx/robo/quote
• Yahoo Finance: https://finance.yahoo.com/quote/ROBO/

This information should not be considered investment advice and is for educational purposes only. Please do your own research before making any investment decisions.