Innovator ETFs: Defined Income ETFs
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DEFINED INCOME ETFS
The Innovator Defined Income ETFs™ are designed to provide a high level of income and built-in risk management.
Provide downside risk management
against losses with a built-in barrier or buffer.
Distribute income
based on the Defined Distribution Rate at the start of the outcome period.
Create a new income rate and reset
downside risk management at the end of each outcome period.
Offer an income strategy
that can help diversify an existing income allocation.
Per the fund's objective, the Defined Distribution Rate is not guaranteed and is applicable only to those investors who hold Shares for an entire Outcome Period.
The Funds have characteristics unlike many other traditional investment products and may not be suitable for all investors. For more information regarding whether an investment in the Fund is right for you, please see “Investor Suitability” in the prospectus. The outcomes that the Fund seeks to provide may only be realized if you are holding shares on the first day of the Outcome Period and continue to hold them on the last day of the Outcome Period, approximately one year. There is no guarantee that the Outcomes for an Outcome Period will be realized or that the Fund will achieve its investment objective.
Potential Benefits
One of the appeals of income investing is its potential to generate returns without relying on price movements. This is one reason income investments are often viewed to be on the more conservative end of the investment spectrum.

What can easily get overlooked, however, is that negative price returns for income-focused investments are not uncommon:
Percentage of 12-Month Price Returns that were Negative: 1990—2023
Source: Bloomeberg LP, as of 9/30/2023. Core bonds measured by the ICE BofA US Broad Market Index; REITs measured by the S&P USA REIT Index; IG corporate bonds measured by the ICE BofA US Corporate Index; Preferreds measured by the ICE BofA Fixed Rate Preferred Securities Index; High yield bonds are measured by the ICE BofA US High Yield Index. Past performance does not guarantee future results.
Takeaway
Unlike traditional income investments, Defined Income ETFs™ are designed for their NAV to be unchanged if the S&P 500 is above the ETF's barrier or buffer level at the end of the outcome period.
Defined Income ETFs
Innovator offers the industry's first and largest suite of Premium Income ETFs™, spanning a range of barrier and buffer levels.
Premium Income Barrier ETFs
Barrier Level
10%
20%
30%
40%
January SeriesListed Jan 2!
April Series
July Series
October Series
Premium Income Buffer ETFs
Buffer Level
9%
15%
October Series
January SeriesListed Jan 2!
FEATURED ETFs
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FAQs
What are the building blocks of Defined Income ETFs?
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  • INCOME: The predetermined amount the ETF seeks to distribute over the full outcome period
  • OUTCOME PERIOD: The 12-month time period over which the defined outcome is realized
  • BUILT-IN RISK MANAGEMENT: The range of reference asset returns the ETF seeks to mitigate over the full outcome period
  • REFERENCE ASSET: The asset that the fund return is based on
Barrier and Buffer: What's the Difference?
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  • A buffer is designed to protect against a specified amount of loss incurred by the reference asset. For example, if a reference asset is down 25% at the end of an outcome period, an ETF with a 15% buffer would incur a price loss of 10%.
  • Unlike a buffer ETF that participates only in losses that exceed the buffer, a barrier ETF participates in the full loss if the reference asset is below the barrier at the end of the period. For example, if a reference asset is down 15% at the end of an outcome period, an ETF with a 10% barrier would incur a price loss of 15%.
Unlike funds that utilize defined outcome investment strategies, barrier funds do not provide a buffer against all underlying ETF losses or a floor that provides a maximum amount of underlying ETF losses, which could cause loss of the entire investment prior to consideration of any defined distribution payments.
Why Defined Income ETFs?
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Defined Income ETFs™ are designed to:
  • Be a stable source of high income, distributed on a regular basis
  • Offer a diversification benefit via their potential for positive total returns in flat or down markets
Where can Defined Income ETFs™ fit in a portfolio?
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  • High Dividend Stock Complement
    • Certain stocks pay high dividends, but subject investors to equity market downside
    • 10% Barrier Income
    • 9% Buffer Income
  • Covered Call Alternative
    • Covered call strategies pursue premium income but, take on the full downside of an equity index
    • 20% Barrier Income
    • 15% Buffer Income
  • Alternative Bond Allocation¹
    • Bonds carry interest rate and credit risk, and are susceptible to price losses prior to their maturity
    • 30% Barrier Income
    • 40% Barrier Income
ADDITIONAL RESOURCES