CHICAGO, Sept. 17, 2024 (GLOBE NEWSWIRE) -- Innovator Capital Management, LLC (Innovator), pioneer and provider of the largest lineup of Defined Outcome ETFs, today announced the launch of the U.S. Small Cap Managed Floor ETF® (RFLR).
RFLR seeks to enable investors to access the growth potential of small cap stocks while aiming to mitigate losses through a portfolio of laddered put options. RFLR joins SFLR and QFLR in the firm’s suite of Equity Managed Floor ETFs®, all sub-advised by Parametric.
Innovator Managed Floor ETF® Offerings
| RFLR (Listed 9/17) | SFLR | QFLR |
| Small-Cap Exposure | Large-Cap Exposure | Nasdaq-100 Exposure |
The ETF launches as investors have increasingly shifted allocations towards small-cap stocks, which saw a 10% decline at the start of August.1 As an election and a changing path for interest rates loom over the markets, we believe investors are bracing for potentially higher volatility, having moved nearly $500 million into Innovator’s U.S. Equity and Nasdaq Managed Floor ETFs®, SFLR and QFLR, respectively.
“Many investors and advisors are gravitating towards small caps to diversify their exposure and capture the Russell 2000’s growth potential. However, many more are sitting in cash for fear of a market drop,” said Graham Day, CIO at Innovator ETFs. “Following a large market decline, it can take years to recover losses even in well-performing segments of the market. With RFLR, investors are able to allocate towards small caps with built-in risk management against large declines. We believe RFLR will serve as a solution for investors aiming to mitigate their risk of volatile swings in small caps, and to provide a level of confidence to investors sitting on the sidelines in cash.”
Media Contact
Frank Taylor / Stephanie Dressler
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About Innovator
Innovator was established in 2017 by Bruce Bond and John Southard, founders of the PowerShares ETF lineup that has grown to be the fourth largest in the world. The listing of three Innovator Buffer ETFs™ in August 2018 marked the creation of the world’s first Defined Outcome ETFs™. Innovator is dedicated to providing ETFs with built-in risk management that offer investors a high level of predictability around their investment outcomes. Today, with more than 100 offerings, Innovator is the industry’s leading provider of Defined Outcome ETFs™.
Unless otherwise noted, all data on market returns, ETF flows, AUM and performance sourced from Bloomberg, as of 9/13/24.
1. Return of small cap stocks measured by the Russell 2000 Index.
RFLR: The Fund seeks to provide risk-managed investment exposure to the U.S. small capitalization companies represented by the Solactive United States 2000 Index through its hedging strategy. There is no guarantee that the Fund will be successful in implementing its strategy to provide a hedge against overall market exposure. The fund seeks to achieve its investment objective by purchasing a series of four, one-year Flex Options packages with "laddered" expiration dates that are 3 months apart. The Fund will also systemically sell short-dated call option contracts, which have an expiration date of approximately two weeks, with an objective of generating incremental returns above and beyond the premium outlay of the protective put option contracts. The Fund does not provide principal protection or non-principal protection, and an investor may experience significant losses on its investment. In a market environment where the Solactive United States 2000 Index is generally appreciating, the Fund may underperform the Solactive United States 2000 Index and/or similarly situated funds.
The Sub-Adviser will seek to "ladder" the Fund’s option contracts by entering into new purchased put option contracts packages every three-months. After such put option contracts expire, the Fund will enter into new put option contracts with one-year expiration dates that are staggered every three months.
As a result of the Fund’s laddered investment approach, on an ongoing basis the Fund will experience investment floors that are expected to be greater or less than the 10% floor provided by an individual Options Portfolio.
The Fund seeks to provide capital appreciation while seeking to limit the amount of losses experienced by investors.
Because the Fund ladders its option contracts and the Fund’s put option contracts will have different terms (including expiration dates), different tranches of put option contracts may produce different returns, the effect of which may be to reduce the Fund’s sought-after protection. Therefore, at any given moment the Fund may not receive the benefit of the sought-after protection on losses that could be available from Options Portfolio with a single expiration date.
FLEX Options Risk The Fund will utilize FLEX Options issued and guaranteed for settlement by the Options Clearing Corporation (OCC). In the unlikely event that the OCC becomes insolvent or is otherwise unable to meet its settlement obligations, the Fund could suffer significant losses. Additionally, FLEX Options may be less liquid than standard options. In a less liquid market for the FLEX Options, the Fund may have difficulty closing out certain FLEX Options positions at desired times and prices. The values of FLEX Options do not increase or decrease at the same rate as the reference asset and may vary due to factors other than the price of reference asset.
Investing involves risk. Principal loss is possible. All rights reserved. Innovator ETFs are distributed by Foreside Fund Services, LLC.
The Fund's investment objectives, risks, charges and expenses should be considered carefully before investing. The prospectus and summary prospectus contain this and other important information, and it may be obtained at innovatoretfs.com. Read it carefully before investing.
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