Innovator Launches Premium Income Barrier ETFs with Downside Protection

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Innovator Capital Management has unveiled a suite of four Premium Income Barrier ETFs, which are designed to provide investors with both high rates of income and protective barriers. However, it is important to note that there is no guarantee of the fund’s success in implementing the barrier, and investors may face a total loss of their investment.

The July series of Premium Income Barrier ETFs offers four downside barriers, ranging from 10% to 40%. These ETFs follow the successful launch of the April series of Barrier ETFs, which have already accumulated more than $120 million in assets under management since their introduction.

The purpose of the Premium Income Barrier ETFs is to generate substantial income levels while mitigating risks associated with traditional fixed-income instruments. With uncertainties surrounding the Federal Reserve, inflation, and the potential for a recession, Innovator ETFs aims to provide clients with the necessary tools to navigate current market conditions. The company is pleased with the initial response to their Barrier ETFs and looks forward to continuing their success with this launch.

The Barrier ETFs will declare 12-month Defined Distribution Rates on the first day of each outcome period, with distributions paid out quarterly. Innovator has plans to introduce additional series of Barrier ETFs in October and January, ensuring coverage across all four calendar quarters.

These ETFs aim to generate high income through a unique options premium strategy that includes built-in barriers against loss. They provide an opportunity for investors to diversify their fixed-income or covered call allocations. Innovator ETFs aims to make historically challenging-to-access, costly, and illiquid strategies more accessible to investors.

The July series of Innovator Premium Income Barrier ETFs and their respective distribution rates and barrier levels are as follows:

JULD: Premium Income 10 Barrier ETF™, with a defined distribution rate of 9.20%, referencing the SPX index, and a 1x/1x + 10% barrier, with an outcome period of 12 months.
JULH: Premium Income 20 Barrier ETF™, with a defined distribution rate of 8.21%, referencing the SPX index, and a 1x/1x + 20% barrier, with an outcome period of 12 months.
JULJ: Premium Income 30 Barrier ETF™, with a defined distribution rate of 7.25%, referencing the SPX index, and a 1x/1x + 30% barrier, with an outcome period of 12 months.
JULQ: Premium Income 40 Barrier ETF™, with a defined distribution rate of 6.51%, referencing the SPX index, and a 1x/1x + 40% barrier, with an outcome period of 12 months.

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