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Buffer ETFs to Capitalize on Market Volatility

Max Chen

This article was originally published on ETFTrends.com.

While the markets experience wide swings in response to heightened fears, investors may look to alternative investments that incorporate an innate buffer to limit the potential downside risks, while still maintaining some upside potential once stocks turn around.

On the upcoming webcast, Buffer ETFs to Capitalize on Market Volatility, Bruce Bond
Co-Founder and CEO, Innovator ETFs; and Graham Day, Vice President of Product and Research, Innovator ETFs, will outline a Defined Outcome strategy with an additional buffer series in play that could help financial advisors better diversify client portfolios and manage market risks.

Innovator ETFs has come out with a suite of Defined Outcome ETF strategies with a built-in buffer to help investors hedge against risks ahead, depending on one’s level of risk aversion.

For example, its April series includes the Innovator S&P 500 BUFFER ETF (BAPR), Innovator S&P 500 POWER BUFFER ETF (PAPR) and Innovator S&P 500 ULTRA BUFFER ETF (UAPR), which have a 9%, 15%, and 30% buffer, respectively.

The quarterly series of Defined Outcome ETFs are designed to provide investors an opportunity to purchase shares as close to the beginning of their respective Outcome Periods as possible. Investors can also purchase shares of a previously listed Defined Outcome ETF throughout the entire Outcome Period and obtain a current set of defined outcome parameters.

Knowing the return profile before investing can significantly reduce the uncertainty involved in buying equities, which typically are among the most volatile asset classes in many investors’ portfolios. Innovator Defined Outcome ETFs represent a new type of strategy that can be effective tools for investors to strike a balance between growth and risk mitigation in portfolios, in a systematic and disciplined manner.

Innovator also plans to expand its April Buffer ETF series to include the Russell 2000, Nasdaq 100, MSCI EAFE and MSCI EM indices. According to Innovator ETFs, their investors can look for their respective tickers KAPR, NAPR, IAPR, and EAPR once the products go live.

Financial advisors who are interested in learning more about buffer ETF strategies can register for the Wednesday, March 18 webcast here.

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