Innovator's Nelson says 8% of clients feel sufficiently protected

Eight percent of clients feel they have sufficient protection in their portfolios, Andrew Nelson, Innovator ETFs' director of product strategy, said on a VettaFi webcast, describing a gap between what advisors think they deliver and what clients report.

Nelson pointed to last week's more than 4% drop in the S&P 500 as notable, citing data that showed it was one of the largest since World War II. Nelson, who joined Innovator in May 2024, said buffer ETFs still follow the market, just with smaller moves. He described telling a client the market had fallen 4.5% while the portfolio was down less than 1%. "So intra those time frames, you will have market movements, but they're just more muted," he said.

Buffer funds offer upside to a stated cap and shield the first slice of a decline, resetting over set calendar periods. For advisors, BALT's terms re-strike every three months: the fund resets both its 20% buffer and its upside cap on that schedule, so the protected range and the maximum gain a client can own are set four times a year. The fund charges 69 basis points for that protection, according to ETF Trends.

BALT is Innovator's largest ETF, with more than $3 billion in assets, according to ETF Trends, and it holds FLEX options to build the buffer. It does not pay income; Nelson said that means fewer taxable events, which can simplify planning for clients in taxable accounts.

Goldman Sachs agreed to acquire Innovator, according to Private Wealth Daily's Deal Tracker, which dates the announcement to Aug. 26 and lists the transaction as not closed.