KJUL Profile
The Innovator Russell 2000 Power Buffer ETF - July is designed to offer investors exposure to the performance of the Russell 2000 Index while providing a buffer against potential losses. The fund allocates at least 80% of its net assets to FLexible EXchange Options (FLEX Options) that reference the iShares Russell 2000 ETF. FLEX Options are a type of exchange-traded options contract known for their customizable terms, which allow investors to tailor their investment exposure to specific market conditions and objectives.
FLEX Options, though guaranteed for settlement by the Options Clearing Corporation (OCC), introduce a counterparty risk associated with the OCC. These options might also present lower liquidity compared to more traditional exchange-traded options. The customizable nature of FLEX Options can offer tailored exposure to the Russell 2000 Index, which is composed of small-cap U.S. stocks and is widely used as a benchmark for the performance of small-cap equities.
The Russell 2000 Index includes approximately 2,000 small-cap companies, reflecting a diverse range of sectors and industries. By focusing on this index, the Innovator Russell 2000 Power Buffer ETF aims to provide investors with opportunities to benefit from the growth potential of small-cap stocks while incorporating a protective buffer against downside risk. The fund's unique structure seeks to enhance risk-adjusted returns by utilizing FLEX Options to manage exposure and mitigate losses.
As a non-diversified fund, the Innovator Russell 2000 Power Buffer ETF - July is specifically concentrated on its underlying strategy involving FLEX Options and the Russell 2000 Index. This concentrated approach allows the fund to implement its investment strategy effectively, but it also means that the fund may be more sensitive to market movements related to small-cap stocks and the performance of the Russell 2000 Index. Investors considering this ETF should be aware of its specific risk profile and the implications of its investment strategy.
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