EPRF

S&P Investment Grade Preferred ETF

EPRF

S&P Investment Grade Preferred ETF

Monthly Dividend Yield

5.21%

SEC 30 Day Yield

5.18%

As of 5/27/2022. Performance quoted represents past performance, which is no guarantee of future results. Investment returns and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted. Click innovatoretfs.com/EPRF for standardized performance and current month-end performance.

Summary

The Innovator S&P Investment Grade Preferred ETF is based on the S&P U.S. High Quality Preferred Stock Index, which selects floating, variable and fixed-rate investment grade preferred issues (BBB- or higher) from U.S. listed preferred stocks on a quarterly basis. The portfolio seeks to offer a diversified high credit quality preferred allocation.

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Why Credit Quality Matters in Preferreds

During the recession, investment grade preferred indices performed better than both broad preferred indexes and high yield bonds. Historically, EPRF has provided exposure to the preferred space with a near-identical yield, while holding only investment grade preferred stocks.

2008 Total Return Of Preferred Stock And Corporate Bond Indices


Credit Quality Exposure


Source: Bloomberg. Data reflects calendar year 2008
Past performance is not indicative of future results. You cannot invest directly in an index.
S&P Rating S&P U.S. High Quality Preferred Stock Index S&P U.S. Preferred Stock Index
AA- -0.1%
A+ - -
A --
A- 7.9%0.3%
BBB+18.8% 5.0%
BBB 56.6%12.2%
BBB-12.8%23.4%
BB+ -27.1%
BB 3.8% 5.4%
BB- - 2.6%
B+ - 2.1%
B - 1.4%
B- - 0.6%
C - -
NR -19.8%
Source: S&P Dow Jones Indices. As of 4/29/2022.

Fund Characteristics


Coupon Type


Weighted Average Coupon 5.1%
Weighted Average Duration 13.4 Years
Weighted Average % of Par 90.6%
% Qualified Dividend Income (QDI) 75.0%
Fixed 85.7%
Variable 10.7%
Floating 3.6%
Source: Bloomberg L.P. as of 4/29/2022
QDI=Qualified Dividend Income. Qualified dividends are taxed at capital gains tax rates, which may be lower than the tax rate for ordinary income.

Reasons for EPRF

  • SEC 30 Day Yield¹ 5.18%, distributed monthly.
  • The only ETF designed to hold 100% investment grade preferred stocks.
¹ As of 5/27/2022

Where Does It Fit In My Portfolio?

Potential For High Income

In a low-yield environment, preferreds may be one of the few asset classes still providing a meaningful source of income.

Improve Preferred Credit Quality

Complement existing preferred exposure by adding EPRF to potentially improve overall preferred credit quality.

Corporate Bond Alternative

Corporate bonds are now yielding less than 3%.2 Investors can maintain an investment grade portfolio while seeking to increase yield through EPRF.

High Yield Bond Alternative

EPRF currently exhibits an attractive yield while maintaining 96.2% exposure to investment grade preferred stock, with significant exposure to QDI-preferreds. 1

  1. QDI=Qualified Dividend Income. Qualified dividends are taxed at capital gains tax rates, which may be lower than the tax rate for ordinary income.
  2. As measured by the Bloomberg Barclays US Corporate Bond index, the corporate bond yield to worst was 3.6% as of 4/29/2022. Yield to worst is a measure of the lowest possible yield that can be received on a bond to fully operate within the terms of its contract without defaulting.

EPRF Methodology

Starting Universe: S&P Investment Grade Preferred Index
Preferreds Within Each Issuer Are Equally Weighted
Preferreds Equally Weighted By Issuer
Innovator S&P Investment Grade Preferred ETF (EPRF)

Documents

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The first group of ETFs designed to provide investors with built-in buffers and exposure to the growth of equity and bond markets, to a cap, in a tax-efficient vehicle.

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