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What You Need to Know about BOCT, POCT, UOCT
These are the only ETFs in the world to provide investors with S&P 500 performance and defined downside buffers. The initial buffers are 9%, 15% or 30% over the one-year outcome period. The ETFs reset annually and can be held indefinitely. They are part of the Innovator Defined Outcome ETF series, with the next quarterly listing planned for January 2019.
Where BOCT, POCT, UOCT Fit in Your Portfolio
These ETFs are designed for investors seeking more control over their investment outcomes by eliminating defined levels of downside risk each year. They are typically used in one of three ways: to de-risk equity exposure, as a bond replacement or as an alternative investment. The ETFs serve as liquid, low-cost and fee- based alternatives to fixed indexed annuities or structured notes.
What You Need to Know About COMB
COMB is the lowest-cost broad-commodity ETF available on the market. COMB is technically an active ETF that seeks to outperform the broad commodity benchmark (Bloomberg Commodity Index). This is achieved through active management of the fund’s cash collateral. Investing in futures contracts on up to 24 commodity futures, COMB has broad exposure across commodity markets. Perhaps the most important aspect of this ETF is the fact that investors do not have to deal with the headache of a K-1 at tax time.
Where COMB Fits in Your Portfolio
COMB represents a diversified basket of the most economically significant global commodities and is a great way for investors to fill up their commodity bucket in an asset allocation. With exposure to over 24 different areas of the commodity market, there isn’t one sector that dominates. With COMB being active, ETF exposure can change, as it looks to track the broad-based commodity benchmark. COMB is a great strategy for the investor who doesn’t want to deal with the headache of a K-1 and has been sitting on the commodity sidelines, waiting to jump into the game.
What You Need to Know About DINT
DINT is an actively managed ETF that provides a focused, high-conviction and benchmark-agnostic portfolio of international equities. Its investments are individually selected through a bottom-up approach that seeks to identify durable, well-managed companies with sustainable competitive advantages that are “best of breed” and expected to compound in value over time. DINT brings a successful long-term track record of the firm investing in international stocks, and offers investors the opportunity for outperformance.
Where DINT Fits in Your Portfolio
DINT would sit squarely in the international equity portion of investors’ portfolios as a complement and diversifier to domestic and indexed international investments. DINT is managed by veteran portfolio manager Danton Goei, with a strategic long-term time horizon to help investors access international markets by investing in developed as well as emerging markets.
What You Need to Know About DTEC
DTEC is a unique ETF both in focus and construction. It focuses on 10 major thematic areas of technological innovation that are disrupting various industries, screening for 10 pure-play companies in each theme. The companies and themes are equally weighted. Equal weighting at both the stock and theme level allows for diversification across the disruptive technological segments of the market, while having the potential to lower volatility as the themes evolve.
Where DTEC Fits in Your Portfolio
DTEC is an ETF designed for the forward-looking investor. With an eye toward investing in disruptive companies, this ETF focuses on 10 themes, ranging from clean energy to innovation in health care. DTEC seeks to be a complement to a global portfolio by holding pure-play companies that are typically not widely held in broad-based indices.
What You Need to Know About FLQL
FLQL seeks to smooth the peaks and valleys of the return patterns in the U.S. large-cap equity market over the long term. With a starting universe of the Russell 1000 Index, FLQL tracks the LibertyQ U.S. Large Cap Equity Index, a rules-based multifactor index, and invests in companies that have favorable exposure to four investment-style factors: 50% Quality, 30% Value, 10% Low Volatility, 10% Momentum. By emphasizing Quality and Value, FLQL invests in high-quality companies without stretching the valuations.
Where FLQL Fits in Your Portfolio
FLQL can serve as a core building block for a portfolio’s U.S. large-cap equity exposure. The fund is designed to protect a portfolio during down markets and may provide stronger risk-adjusted returns over the long term, helping to keep clients invested in times of volatility.
What You Need to Know About JPGB
The global bond market is robust, risky and full of opportunity, yet most investors tend to shy away from building a global bond portfolio. Investors looking beyond our borders have found their answer. With the ability to bounce between markets, explore both EM and developed debt, JPGB can tilt between currencies while aiming to have 50% of the portfolio denominated in USD. A true active ETF, JPGB is not constrained by an index, allowing the portfolio manager the ability to stay flexible across markets to discover hidden pockets of opportunity.
Where JPGB Fits in Your Portfolio
Diversifying across the fixed income market can enhance portfolio returns and reduce volatility. This extended sector fund taps into our best ideas across global bond markets to seek total return and higher income.
What You Need to Know About KLDW
This unique ETF takes a different approach to investing in innovation, seeking to capture the “knowledge factor,” the tendency of highly innovative companies to generate excess returns in the stock market. To better understand how companies are innovating, it adjusts historical financials to take into account a firm’s R&D, branding and other innovation activities. This knowledge factor is measured through a knowledge intensity test. Once a company passes, it’s equally weighted in the index and ETF. KLDW offers investors a new approach to investing in the companies that are innovation leaders in their groups.
Where KLDW Fits in Your Portfolio
KLDW is a new way to gain exposure to the developed markets. With its largest weighting to Japan and the U.S., KLDW is somewhat top heavy, but offers plenty of exposure to innovative sectors like health care and technology. KLDW is perfect for investors looking for a fund that invests with a new approach using the knowledge factor to try and capture companies likely to outperform.
What You Need to Know About ONLN
ONLN is specifically designed for investors to benefit from the changing retail landscape, as consumers move toward online shopping and away from physical retail stores. ONLN’s strategy pinpoints retailers that principally sell online or through other non- store channels, such as mobile or app purchases, and separates them from those reliant on bricks-and-mortar stores. The fund focuses on the largest players in the space—iconic companies like Amazon and Alibaba, whose rise is reshaping the retail world. ONLN is reasonably priced and tracks the Pro- Shares Online Retail Index.
Where ONLN Fits in Your Portfolio
ONLN is the perfect ETF to add to a core-and-explore approach to investing. This fund allows you to gain access to what could become the new consumer staples of online retailers. ONLN invests in companies like Etsy, Shutterfly as well as online behemoths like Amazon and Netflix.
What You Need to Know about PRID
PRID is a principles-based market-cap-weighted ETF that includes both large and midcap companies. The constituents are selected using the Human Rights Campaign’s Corporate Equality Index (CEI). The CEI rates a company’s policies and practices toward LGBT employees, including nondiscrimination policies, equitable benefits and other factors. But like many modern ESG products, PRID also has profitability and liquidity screens. Companies rated at least 85 out of 100 are selected for the index and weighted by market cap.
Where PRID Fits in Your Portfolio
Focused on U.S. equities, PRID is another way to get core exposure to predominately large-cap U.S equities through an ESG filter. For investors looking to put their money to work in a good cause, PRID is a perfect way to invest in companies that are doing right by their employees and the growing LGBT community.
What You Need to Know about PUTW
There are a few things investors need to know about PUTW before investing. First, you need to understand what an option is as well as what the put-write strategy is. PUTW generates income by selling at-the-money put options that are fully cash collateralized. This income stream acts as a shock absorber, partially absorbing losses during equity drawdowns. While the ETF may only be a few years old, the underlying index that the ETF tracks has a 10-year history. This pure-play ETF looks to distribute gains annually and has a unique tax structure investors should be aware of before buying.
Where PUTW Fits in Your Portfolio
PUTW is a good option for an investor looking for returns in a sideways or volatile market, and may offer a less volatile ride than the S&P 500. This options strategy will give investors some protection against a market downturn, in addition to partial upside participation in upward-trending markets. This ETF is a great complement to your existing equities strategy.
What You Need to Know About RVRS
A new take on the traditional S&P 500 Index, RVRS inversely weights the securities of the S&P 500, giving investors greater exposure to the smallest members of the index. This slightly contrarian play rebalances every quarter, selling the best performers and buying the underperforming stocks.
Where RVRS Fits in Your Portfolio
RVRS is an interesting fund, as it could be deployed in several different ways. The most common way investors will use RVRS is in a contrarian play on the S&P 500. One could make the argument that this fund is closer to a midcap approach than a large- cap one. In addition, RVRS could be used to manage size exposure or place bets with the S&P 500 universe.
What You Need to Know About ULBR
The first thing any investor needs to take note of is that ULBR is not an ETF but an exchanged-traded note, meaning investors would have credit risk associated with CitiBank. It’s important that buyers know the difference, as structure matters. ULBR is a more complex investment approach involving Libor, shorting of eurodollar futures and the use of leverage. ULBR is not for the “set it and forget it” investor, as the effects of contango could derail long-term performance. After looking under the hood, any investor chasing returns may have found their answer, as ULBR has been portfolio rocket fuel in 2018.
Where ULBR Fits in Your Portfolio
As previously mentioned, ULBR is not for beginners, but can and has served investors well this year as an alpha booster. For those looking to deploy ULBR, it will be on the edges of their portfolio rather than a core holding. This hidden gem must be handled with caution, as it has moving parts and leverage, but with strong 1-month and 3-month returns, investors can be tactical with ULBR and see strong returns.
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