UOCT Profile
The Innovator S&P 500 Ultra Buffer ETF - October (BUFO) is an exchange-traded fund designed to provide investors with a unique risk management strategy while gaining exposure to the S&P 500 Index. The fund achieves its investment objective by primarily investing at least 80% of its net assets in FLEX Options, which are customized options contracts that reference the SPDR S&P 500 ETF Trust (SPY). These FLEX Options are structured to offer a specific level of downside protection against losses while participating in the potential upside performance of the S&P 500 Index.
The underlying asset for the funds FLEX Options is the S&P 500 Price Index, a leading benchmark that tracks the price movements (excluding dividends) of 500 of the largest and most influential companies listed on U.S. stock exchanges. This index represents a broad cross-section of industries and sectors, providing a comprehensive measure of the performance of large-cap U.S. equities. By focusing on FLEX Options linked to the S&P 500 Price Index, BUFO aims to deliver targeted risk mitigation and performance enhancement for investors seeking exposure to this key market index.
The ETF employs a strategy that involves purchasing FLEX Options with predefined thresholds, creating a "buffer" against losses within a specific range, while allowing for potential gains up to a cap. This approach is particularly suited for investors who want to limit their downside risk in volatile market conditions while still participating in market gains. The fund is rebalanced periodically to align with its investment strategy and ensure that it remains effective in providing the intended risk buffer.
As a non-diversified fund, BUFOs investments are concentrated in a limited number of FLEX Options linked to the S&P 500, which could result in a higher level of risk compared to more broadly diversified funds. Investors should be aware that while the fund offers downside protection, it also comes with certain risks, including the potential for limited participation in the indexs upside performance and the impact of market volatility on the value of FLEX Options.
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