Innovator ETFs just launched two new products to be traded on the New York Stock Exchange, and the CEO and founder of the provider, Bruce Bond, broke down to TheStreet what the pitch to investors is.
Innovator launched the Emerging Market Buffered ETF and the Developed Market Buffered ETF.
Both ETFs allow investors to track MSCI emerging markets indices and the S&P 500 index with a 15% downside buffer. This means that within the first 15% of losses on an index, the investors is protected, preserving his or her capital.
But there's a caveat. There is a limit to the upside. So how competitive is this ETF with other options out there?
"The reason the cap is there and the reason it's so competitive is there's a lot of people that want to be in a developed markets or emerging markets, but they're afraid to do it because of the risk associated with that," Bond said.
"What this allows them to do is to invest in those markets. And for the emerging market, they get the first 9% up in the market, but they have a 15% buffer on the downside, so they get that exposure that they need, but they also have the buffer there to provide additional protection on the downside."
Investors get 10% of upside for developed market funds.
What about Europe exposure?
"We're definitely a in talks on some of that, and what will make sense there [for Europe funds]," Bond said.
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