The fund is based on the performance of an exchange-traded fund that tracks the MSCI EAFE Index. Over the outcome period, it cushions declines within a set range and captures gains up to a cap. It gives indirect exposure to developed market equities, including those of Europe and Japan.

It suits neutral-minded investors who want to participate in developed market equities but reduce the size of losses during downturns.

It is a passively managed (index-tracking) ETF run by Innovator Capital Management.

The fund invests most of its net assets in FLEX Options that reference an exchange-traded fund tracking the MSCI EAFE. When the outcome period begins, the buffer range and the upside cap are set together, and they are reset to new terms when the period ends. If you buy partway through the period, the remaining buffer and cap differ from the initial terms.

• The downside buffer range and the upside cap are set in advance at the start of the outcome period
• Developed market equity exposure is replaced with an options structure, allowing participation without direct ownership

Assets under management (AUM) are $105.2M, and the total expense ratio is 0.85% per year.

Monthly products in the same series share the same strategy and differ only in the month the outcome period starts. The selection criteria are therefore the entry timing and the buffer and cap terms on offer at that time.

The fund follows developed market equities, but in rising markets it gains less than the index because of the cap, and in corrective phases it tends to fall less thanks to the buffer. As a result, it traces a trajectory with muted volatility.

When demand for developed market equities swings with the direction of exchange rates and interest rates, money has been observed moving into buffered products. Across the series, fund flows tend to cluster in the months when the outcome period resets.

The structure that cushions downside is its strength, while the upside cap and a relatively high expense burden are its weaknesses.

The four products shown in the table, IJUL, IJAN, IAPR, and IOCT, are sister products with the same strategy and different outcome period start months, so the decision comes down to choosing an entry month. Emerging market products such as EJUL invest in a different universe, so it is appropriate to compare them only on fees and fund size. If you want developed market index exposure without a buffer, products such as EFA and IEFA are alternatives. If you want the same buffer structure on US equities, looking at September series with different buffer sizes, such as PSEP, BSEP, and USEP, makes the choice easier.

These are the items to check before buying. Because the terms you receive from a buffered product depend on when you buy, you should first look at the remaining outcome period, the current cap, and the remaining buffer.

The buffer applies only when the outcome period is held to the end, and during the interim period unrealized losses appear in full. If the underlying index falls beyond the buffer range, the excess losses are fully reflected.

It is a tool for keeping a developed market equity allocation while reducing drawdowns. If you want to capture the full upside, a standard index fund such as EFA or IEFA is more suitable, and to stagger your entry timing, splitting purchases with IJAN, IAPR, and IOCT is a better fit.