CHICAGO, March 14, 2025 (GLOBE NEWSWIRE) — Innovator Capital Management, LLC (Innovator), pioneer and provider of the first and largest lineup of Defined Outcome ETFs™, today announced the launch of the Innovator Equity Premium Income – Daily PutWrite ETF (SPUT).
The majority of today’s option-income ETFs are covered call strategies that primarily seek to sell volatility to generate income. SPUT differentiates itself by selling puts instead of calls, which typically generates higher premiums than comparable call options and doesn’t cap the upside of the portfolio’s equity allocation. With the potential to generate both income and growth, SPUT is positioned to be a compelling alternative or complement to derivative income strategies.
“We regularly hear from clients who are looking for new ways to generate income in their portfolios, especially after the disappointing bond returns of recent years,” said Graham Day, CIO at Innovator ETFs. “While the income from put-writing is compelling, we think the potentially low correlation to the bond market is another feature that will have strong appeal to investors.”
Rather than selling puts at the same strike price each day, the strategy dynamically adjusts the strike to account for changes in market conditions and to maintain a relatively low probability of the position incurring a loss.
The strategy underpinning SPUT has predominantly been available only to institutional and high-net-worth investors. Innovator is now making it more widely available through the efficiency and of the ETF wrapper.
In addition to option premium, Innovator expects the fund to also generate income from stock dividends and U.S. T-Bills, to be distributed to shareholders on a monthly basis.
About Innovator Capital Management, LLC
Innovator was established in 2017 by Bruce Bond and John Southard, founders of the PowerShares ETF lineup that has grown to be the fourth largest in the world. The listing of three Innovator Buffer ETFs™ in August 2018 marked the launch of the world’s first Defined Outcome ETFs™. Innovator is dedicated to providing ETFs with built-in risk management that offer investors a high level of predictability around their investment outcomes. Today, with more than 140 ETFs and $23 billion in AUM, Innovator is the industry’s leading provider of Defined Outcome ETFs™.
Media Contact
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The Fund seeks to provide current income while providing the potential for capital appreciation. The Fund’s income is expected to be received primarily from its purchases of Equity-Linked Notes (ELNs) that implement a put-write option strategy. The ELNs provide the Fund with monthly distributions comprised of premiums generated from selling single-day expiration, out of the money put option contracts on the S&P 500 Price Return Index (SPX) that provides exposure to approximately 100% of the Fund’s assets. The Fund also expects to receive income generated by its investments in U.S. Treasuries and dividends, if any, from its investments equity securities primarily comprising components of the Solactive GBS United States 500 Index (U.S. Equity Index). The Fund’s investments in equity securities also seek to provide the potential for capital appreciation.
The Fund will also be subject to the downside performance of the U.S. Equity Index and SPX through its respective holdings in equity securities and ELNs. The Fund’s monthly income payments to investors may not be sufficient to offset any such losses on a total return basis. There can be no guarantee that the Fund will be successful in its objective to provide current income while maintaining the potential for capital appreciation.
Equity-Linked Notes Risk. Investing in ELNs may be more costly to the Fund than if the Fund had invested in the underlying instruments directly. Investments in ELNs often have risks similar to the underlying instruments, which include market risk. In addition, since ELNs are in note form, ELNs are subject to risks of debt securities, such as credit and counterparty risk, including the risk that issuers and/or counterparties will fail to make payments when due or default completely. Should the prices of the underlying instruments move in an unexpected manner, the Fund may not achieve the anticipated benefits of an investment in an ELN, and may realize losses, which could be significant and could include the Fund’s entire principal investment. However, the Fund’s exposure to losses in its investments in the ELNs is limited to its principal investment in such ELNs. Investments in ELNs are also subject to liquidity risk, which may make ELNs difficult to sell and value. A lack of liquidity may also cause the value of the ELN to decline. In addition, ELNs may exhibit price behavior that does not correlate with the underlying securities.
Put-Write Risk. Put option contracts may be subject to volatile swings in price influenced by the underlying reference asset. Although the Fund receives premiums on the put option contracts written by the ELN, the losses experienced by the Fund if the level of SPX falls below the strike price may outweigh Fund gains from the receipt of the option premiums. With respect to the Fund’s investment in ELNs, the Fund’s returns are limited to the amount of option premiums it receives. Additionally, market conditions may negatively impact the amount of premiums received from selling put-write option contracts or impact the selected strike price of the option contracts, subjecting the Fund to more risk of loss.
Put-Write Index. The ELNs will follow the Put-Write Index. The Put-Write Index sells one-day maturity put option contracts on SPX on a daily basis that generally seeks to provide income through premiums received. The Put-Write Index subjects the ELNs, and therefore the Fund, to the risk of loss associated with price decreases of SPX below the strike price. If the Put- Write Index experiences any losses based off the price movements of SPX, as a result of the 100% notional value utilized by the Put-Write Index, the losses incurred by the ELNs the Fund invests in will be greater than those experienced by SPX.
While the Put-Write Index seeks to minimize the risk associated with the written put option contracts, the Put-Write Index and ELNs subject the Fund to risk of loss, including the risk that the Fund may lose the entirety of its principal amount invested in an ELN.
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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