ZALT Profile
The Innovator U.S. Equity 10 Buffer ETF - Quarterly is designed to provide investors with a specialized approach to equity exposure by using innovative financial instruments. Under normal market conditions, the fund invests at least 80% of its net assets in FLEX Options that reference the SPDR S&P 500 ETF Trust. These FLEX Options are customizable equity or index options that are traded on an exchange, offering flexibility in terms of strike prices, expiration dates, and other contract features.
FLEX Options, while guaranteed for settlement by the Options Clearing Corporation (OCC), come with specific risks, including counterparty risk related to the OCC and potential liquidity issues compared to more traditional options. These characteristics may impact the funds performance and the ease with which options can be traded or unwound. The customization of FLEX Options allows for tailored exposure to the S&P 500, designed to align with the funds investment strategy.
The fund's strategy focuses on providing a buffer against losses in the S&P 500, up to a specified level, with the potential for returns that exceed the performance of the underlying index. This approach aims to mitigate downside risk while capturing gains in favorable market conditions. The quarterly reset feature of the fund allows it to adjust its strategy every three months, aligning with the changing market environment and investor needs.
As a non-diversified fund, the Innovator U.S. Equity 10 Buffer ETF - Quarterly is concentrated in its investments and may be subject to higher volatility and risk compared to more broadly diversified funds. Investors should evaluate their risk tolerance and investment goals before investing, considering both the potential benefits and risks associated with the funds use of FLEX Options and its specific investment strategy.
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