Graham Day, EVP and Chief Investment Officer at Innovator Capital Management, shares insights on defining outcomes in investment strategies. He dives into the mechanics of Dual Direction ETFs, explaining how they provide potential upside with protection against market declines. Graham discusses practical use cases for advisors, including tax benefits, annual maturities, and how these products compare to traditional bonds. He highlights the proactive innovation driving product development at Innovator, making investing more accessible and strategic for clients.
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insights INSIGHT
How Dual Direction ETFs Work
Dual direction ETFs combine upside caps with inverse one-for-one gains when markets fall within a defined range.
They switch to a buffer beyond that range, giving known outcomes rather than full tail protection.
insights INSIGHT
One-Year Caps And One-For-One Inverse
A 15% dual direction ETF tracked the S&P one-for-one up to an upside cap (example 8.7%) over a one-year period.
If the S&P falls up to 15% you gain one-for-one, then the product becomes a downside buffer beyond that.
insights INSIGHT
Designed For Typical Corrections
Most market losses over one-year windows fall between 0% and -15%, where dual direction ETFs perform best.
These ETFs target the common correction range rather than rare catastrophic crashes.
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Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. See our disclosures here:
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