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In this episode of ETF Spotlight, I speak with Graham Day, Chief Investment Officer at Innovator Capital Management, about buffer or defined outcome ETFs that allow investors to participate in the market upside to a cap while limiting or avoiding losses if the market falls.
The first half of 2024 was terrific for stocks, fueled mainly by AI enthusiasm driven by NVIDIA (NVDA - Free Report) . Many investors now believe that easy money in the market has already been made and are looking to protect their portfolios. As a result, a lot of money is flowing into buffer ETFs.
Last year, Innovator launched the world’s first 100% protected ETF, the Innovator Equity Defined Protection ETF - 2 Yr to July 2025 (TJUL - Free Report) . The firm continues to expand the lineup and recently introduced products with six-month, one-year, and two-year outcome periods.
Record-high short-term interest rates have made protection strategies more attractive due to the higher caps possible currently. However, with the Fed expected to start cutting rates later this year, this is a great opportunity to lock in attractive levels of upside potential.
Many investors are worried about election-related uncertainties. For them, the Innovator Equity Defined Protection ETF - 6 Mo Jan/July (JAJL - Free Report) is a compelling option.
Investors should remember that stocks tend to go up over the long term and that they should generally ignore short-term noise. Since its inception in January 1993, the SPDR S&P 500 ETF (SPY - Free Report) has returned a little over 10% annualized. The Nasdaq 100 ETF (QQQ - Free Report) has produced almost 19% average annual return over the past 10 years.
At the same time, many risk-averse investors, particularly those in or nearing retirement, have been reluctant to buy stocks. There is a tremendous amount of cash sitting on the sidelines.
Some invest in products like fixed indexed annuities and market-linked CDs that protect against downside risks but come with much higher fees, high investment minimums, long lockup periods, and unfavorable tax treatment. Protection ETFs are a much better option for such investors.
Tune in to the podcast to learn more.
Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.
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Market Jitters? These ETFs Can Provide Peace of Mind
In this episode of ETF Spotlight, I speak with Graham Day, Chief Investment Officer at Innovator Capital Management, about buffer or defined outcome ETFs that allow investors to participate in the market upside to a cap while limiting or avoiding losses if the market falls.
The first half of 2024 was terrific for stocks, fueled mainly by AI enthusiasm driven by NVIDIA (NVDA - Free Report) . Many investors now believe that easy money in the market has already been made and are looking to protect their portfolios. As a result, a lot of money is flowing into buffer ETFs.
Last year, Innovator launched the world’s first 100% protected ETF, the Innovator Equity Defined Protection ETF - 2 Yr to July 2025 (TJUL - Free Report) . The firm continues to expand the lineup and recently introduced products with six-month, one-year, and two-year outcome periods.
Record-high short-term interest rates have made protection strategies more attractive due to the higher caps possible currently. However, with the Fed expected to start cutting rates later this year, this is a great opportunity to lock in attractive levels of upside potential.
Many investors are worried about election-related uncertainties. For them, the Innovator Equity Defined Protection ETF - 6 Mo Jan/July (JAJL - Free Report) is a compelling option.
Investors should remember that stocks tend to go up over the long term and that they should generally ignore short-term noise. Since its inception in January 1993, the SPDR S&P 500 ETF (SPY - Free Report) has returned a little over 10% annualized. The Nasdaq 100 ETF (QQQ - Free Report) has produced almost 19% average annual return over the past 10 years.
At the same time, many risk-averse investors, particularly those in or nearing retirement, have been reluctant to buy stocks. There is a tremendous amount of cash sitting on the sidelines.
Some invest in products like fixed indexed annuities and market-linked CDs that protect against downside risks but come with much higher fees, high investment minimums, long lockup periods, and unfavorable tax treatment. Protection ETFs are a much better option for such investors.
Tune in to the podcast to learn more.
Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.