It is a defined outcome buffer ETF that is linked to the S&P 500 Index, cushions an initial set range of losses over the outcome period, and limits upside to a predetermined cap.

It suits conservative investors who want to keep equity market exposure while reducing volatility through a set level of downside cushioning.

It is a passive (index-tracking) ETF managed by Innovator.

Using options based on an S&P 500 ETF, the fund is designed to cushion an initial set range of losses over an outcome period of about one year starting in June, while participating in gains up to a predetermined cap. When the outcome period ends, the fund resets with a new buffer and cap.

• A defined outcome structure that cushions part of the downside
• A buffer and cap that are renewed with each outcome period

Assets under management (AUM) stand at $881.2M, and the total expense ratio is 0.79% per year.

Unlike a standard index ETF, it cushions part of the downside but caps the upside, and buying partway through the outcome period can change the remaining buffer and cap.

A buffer ETF follows the movement of its underlying S&P 500, but its range of fluctuation is adjusted by the buffer and cap structure. In falling markets, the buffer tends to reduce losses, but in strong rallies the cap may prevent it from capturing the full index gain.

When market uncertainty rises, interest in buffer ETFs tends to grow as investors look to cushion losses, while in bull markets, money that prioritizes upside participation sometimes shifts to standard index ETFs.

Its strength is that it cushions part of the downside and reduces volatility, while its drawbacks are the capped upside, dependence on the outcome period, and the fee burden.

BUFR, BUFD, and BUFQ shown in the table are diversified products that bundle several buffer ETFs in a ladder, and PJAN is a buffer ETF from the same issuer with a January outcome period. To spread outcome periods across buffer ETFs with different start months, you can look at BJUN and GJUN, and if you want a longer outcome period, you can also compare PAUG, which starts in August. These differ in buffer range, cap, and start month, so it is best to choose according to your investment goals.

Here are the points to review before investing in PJUN. As a buffer ETF, it is important to check the buffer range, cap, outcome period, fee level, and the remaining terms if you buy midway, all in advance.

Because gains are capped, the fund cannot capture the full index rally in a bull market, and buying partway through the outcome period can change the buffer and cap terms. The buffer applies only up to a set range, so declines beyond that lead to losses.

It is a buffer ETF suited to conservative investors who want to keep equity exposure while reducing volatility through a set level of downside cushioning. If you prioritize upside participation, a standard index ETF may be the better choice, while if you prioritize downside cushioning, PJUN can be an alternative.