CHICAGO, Jan. 25, 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 Nasdaq-100 Managed Floor ETF (QFLR). QFLR joins SFLR in the firm’s Equity Managed Floor ETF suite, both of which are sub-advised by Parametric, the leading provider of systematic investment strategies and custom portfolio solutions.
The newly-launched ETF enters the market following a tumultuous two years in the Nasdaq-100, which plummeted 33% in 2022, only to rebound 55% in 2023.1 QFLR is the only ETF that provides exposure to the Nasdaq-100 while seeking to limit losses through a portfolio of laddered put options designed to help reduce tail risk.
“After the massive market decline in 2022, fear of further losses pushed many investors to the sidelines, where they missed out on the rally in 2023,” said Graham Day, CIO at Innovator ETFs. “We believe QFLR is a timely solution for investors looking to add Nasdaq-100 exposure, but wanting built-in risk management against large moves downward. Historically, in positive years, the Nasdaq-100 has averaged returns of 29%, but in negative years it has averaged losses of -30%. Most investors are unable to stomach this type of volatility and QFLR is a solution to allow investors to remain fully invested in the Nasdaq-100 with built-in risk management. We are excited to expand on SFLR’s success and bring our expertise with this strategy to the Nasdaq-100 with QFLR.”
Gathering more than $100 million of inflows since its inception, SFLR has captured 80% of the S&P 500’s upside with just 70% of its volatility, all while keeping intact its built-in protection against more severe market downturns. QFLR will offer investors an opportunity to apply the same risk-managed strategy to the Nasdaq-100 Index.
With more than $4 billion of inflows in 2023, Innovator continues seeing significant interest in its Defined Outcome ETF™ lineup that uses forward-looking investment strategies. Innovator has amassed more than $17 billion in assets under management2 since listing the first Buffer ETFs™ in August 2018, creating one of the fastest-growing categories in the investing world.
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The Fund seeks to provide risk-managed investment exposure to large-capitalization U.S. equity securities of the Nasdaq-100 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 Nasdaq-100 Index is generally appreciating, the Fund may underperform the Nasdaq-100 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.
Information Technology Companies Risk Companies in the technology sector are often smaller and can be characterized by relatively higher volatility in price performance when compared to other economic sectors. They can face intense competition which may have an adverse effect on profit margins.
Investing involves risk. Principal loss is possible. 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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1 All return and performance data sourced from Bloomberg, as of 1.18.24.
2 Through 1.25.24.
