 The
Innovator S&P 500 Buffer ETF - October (BOCT) is an exchange-traded
fund (ETF) that seeks to provide investors with exposure to the S&P
500 Index, while seeking to provide downside buffer protection against
the first 15% of losses over a one-year period. The ETF is issued by
Innovator Capital Management, and seeks to achieve its objective
through a “buffer strategy,” which utilizes a combination of options
contracts on the S&P 500 Index.
As of March 23, 2023, the ETF
has a net asset value (NAV) of $1.06 and total net assets of $11.06
million. The fund has an expense ratio of 0.79%, which is relatively
high compared to other passive ETFs that track the S&P 500 Index.
The ETF's holdings primarily consist of S&P 500 Index options
contracts, which are used to implement the buffer strategy. The ETF
aims to buffer the first 15% of losses over a one-year period, after
which investors will experience the full downside risk of the S&P 500
Index. The fund is rebalanced on a quarterly basis, which can lead to
higher transaction costs for investors.
The BOCT ETF can be
used by investors as a way to potentially protect their portfolios
from market downturns, while still retaining exposure to the potential
upside of the S&P 500 Index. However, investors should be aware that
the buffer strategy used by the fund is not foolproof, and there is no
guarantee that it will be successful in protecting investors from
losses. Additionally, the high expense ratio of the fund may eat into
returns over the long-term.
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