Animal Spirits Podcast - Talk Your Book: 100% Downside Protection

Episode Date: July 31, 2023

On today's show, Michael and Ben are joined by Bruce Bond, Founder and CEO of Innovator ETFs to discuss: how 100% downside protection works, what upside you can earn with complete downside protection, who this product makes the most sense for, how rates and option premiums affect the strategy, and much more!    Find complete show notes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com   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. Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to you by Innovator ETFs. Go to Innovatoretefs.com to learn about the new ETF, I think it's the first one in the U.S., at least, that offers 100% downside protection on the stock market. That's Innovatoretoffs.com. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion, and do not reflect the opinion of Ridholt's wealth management.

This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. We had on Bruce Bond today

who kicked the hornet's nest the other week inadvertently on social media with his announcement or their announcement at Innovator ETF that they have a new product that it's an ETF. that fully protects the downside. And we got into this on the show.

People were none too pleased. I think when I say people, I mean, you know, critics, people in the industry. And sorry, not sorry. I, I'm a fan. I think the tagline of 100% downside protection in the stock market just got a lot of people riled up. And this one was on Twitter. It was trending a little bit, this story. And we get into it on the show load.

but my whole thing is that investing is full of tradeoffs. And the tradeoffs for this fund are glaring. So I think the thing is, if this fund and the tradeoffs that it has are not for you, that's fine, I think. But there are going to be some people who say, okay, these tradeoffs actually make sense to me. And I'm willing to accept them, understanding that there are pros and cons.

So we get into all of that on the show, how this works. I guess what I am sympathetic to, if people are of the view, if this is the critique, that there are going to be unsublished, unscrupulous financial professionals that sell this product to their clients without really explaining to them the costs involved in terms of the missed opportunity cost and all that stuff that we get into. Yeah, that's bullshit. And I don't think anybody likes people, tricking people. But in terms of what this product is and what it can do for you in terms of peace of mind and the behavioral coaching that advisors purport to be doing for their clients, I have no problem

with this, I like, I think that clients, investors like certainty, they just do. And even if there is a cost, i.e., they're not getting all of the upside, if the upside is over a cap, okay, right? I think people are, people are, that's a choice that, that is, is personal to everybody's risk tolerance. And so, let's not step in anymore because we get into all of them, go ahead. To your point, to your point about, like, hiding stuff, I think the beauty of these products and what innovator is doing is that it was way easier to hide stuff and be, you know, non-transparent in annuities. Like, there's nothing wrong with annuities. I think the problem is it was hard for people to understand what they are and what they're doing. And then what the person's selling

it is actually getting out of the deal. I think this taking out that middleman and just putting it out there, it's way more transparent than that. Yeah, I could on. Yeah, I totally agree. All right, here's our conversation with Bruce Bond. We were joined once again by Bruce Bond, one of our favorite. Returning Guest, the founder and CEO of Innovator ETFs, Bruce, I think one of the reasons that we like talking with you so much is because the whole idea of investing itself is a series of tradeoffs, right? There's different risks you can take and different expectations you can set. And the way that you've all created your products is that those tradeoffs are just stated

upfront, a little better than maybe some other things because they're defined. And we've talked in the past about different products you have with different upside potential or different downside potential caps. And the latest product that you've released has, you know, maybe the one of the better defined ones that we've seen in terms of getting people to talk. So T-Jule is a basically caps your losses at 0%. There are no losses, right? No downside. And so I'm just curious how the thought process of this fund went in and then kind of want to get into the details too. Yeah, exactly, Ben. And thank you guys for having me again. I really appreciate it. Yeah, we're super excited about these products. If you think about a lot of people, they are not

comfortable going into the equity market, what we call naked, you know, with no, no protection at all. That's why they buy annuities, right? They buy annuities because they want to know that their money's protected. They're going to get it back. It's not at risk, or at least that's how they feel. And so we are, with our types of products, we're trying to give people a sense of the knowledge of what their outcome will be down the road so that they don't feel like they're just gambling with their money, but they know what their risks are and they're able to contain their risk. And that has been a huge thing for investors.

And as you guys know, really not available to investors before this on the equity side of the market. They just couldn't access these types of investments, most of them. You know, there were some structured products and some annuities and things like that. but in the open market, it wasn't available to a lot of people. And that's the reason we're excited about the buffers, but also what we call defined protection. And one thing I just want you to note and your listeners to note how big a deal

this is, you know, the SEC does not approve to put protection in the name of products. You know, if you guys were talking to your clients, how often can you say you're protected? You can't really say that. It's not a term you're allowed to use. But they actually allowed us to put defined protection in the name of these products because people actually have protection from the downside of the market. So I didn't realize that the SEC actually restricts certain words because it could kind of take something that would throw investors off potentially. Absolutely. They are very strict about what you can call your product.

And if you look around all 40-act products for the most part that you see in the marketplace that people buy, I don't think you're ever going to see protection in the name. name because it's that name is reserved protectioners you know it's just not it's like insured saying insured for something I mean it's a very difficult thing to use and so but the SEC with these particular products have allowed us to say protection even with the buffer products that we have you know we have to say a level of protection we're not able to just say protection here is defined protection is the name of these products so the level of protection is really if you buy them opening day and you hold them through the end of the period, which is two years, you have no risk on the downside. You only have an opportunity on the upside of the equity markets over that

two-year period. And hopefully we're going to unpack that and talk about it a little bit more. Oh, we're going to for sure. I'm excited to dive into the actual product and what it is because this, to Ben's earlier point, this definitely lit social media on fire, particularly those working in asset management and wealth management. And I think part of the consternation is maybe they're, they think that this is Wall Street pulling some sort of a trick. And I actually, I'm on, I'm on the other side of that for the most part. And I'm not saying that just because you're here. And I'll give, I'll give my reasons why I actually think this is a reasonable solution.

And it's the opposite of fooling anybody. It's incredibly transparent about what it does. So I'm, I'm going to come to your defense again, not just, not just because you're, you're paying to be at the show. But let's get into, let's get into the specifics of the product. Downside protection. Tell us about it. When does it kick in?

Is there anywhere that you can violate the downside? Like exactly how does that work? Okay. So basically how we brought that T-Jule and that's for July, J-U-L is for July. So you would need to have bought this thing first day of July. Now, you can buy it at any time, as you guys know. Anybody wants to go to our website, look up T-Jule, look at where it's trading. It will tell you exactly what your protection level is as well as what your upside potential is on the website today.

But just to keep things simple, if you bought this first day and you held it through the end of the period, which is two years, you have no downside risk, and you have the opportunity to get up to 16.67% of the upside in the market over that two-year period. So now, if in the middle of the period, the market's down, you might be down a slight amount. But remember, it's not going to go down a lot because it knows it's. not, you're not going to be able to lose money in this over two years. And so it might down draft a little bit if the market's down significantly, but it knows it's not going to be down at the end of the two years. Therefore, we don't expect to see much on the down draft. Now, also, if the market's up 8%, let's say at the end of the year, it may only be up 5%, because there's a lot of time value in the options that are in the portfolio. So in order to get the 16.67%, you have to hold it to the very

end of the two-year period and you are going to have some movement in the middle. It's not going to track one-to-one with the market in the middle. Now, the beauty of this, though, is let's say the market's up eight and you're up five and you need your money, you can sell it and get your money and take it out. And there's no penalty to you. If it's within a year, you're going to pay short-term games. If it's over 12 months in a day, you're going to pay long-term gains. But it keeps the investor in control of the assets. And I think that's the beauty of it. You don't have credit risk with an insurance company.

If you did an annuity, you don't have that. You own the underlying is very simple. Basically, we have 100% put and at the money put that covers you all the way down. So you can't risk money on the downside over two-year period, so two-year put. And then we have to, we have an in-the-money call to give you the upside of the market. and then we sell a call, which creates the cap. Now, why do we sell a call? We sell the call because we have to raise enough money to pay for the whole package.

For investors that are getting into this, this is a zero cost package to them. They get in, it's all done at the institutional level, right? So you get in. The package has no cost to you. Your cost is you have to give up whatever's above the 16.67% over two years. That is your cost, the obvious and also the dividend. You don't receive the dividend because we use the dividend plus whatever's above that to finance the deal in the future. Bruce, correct me if I'm wrong, but I think most of your other products that we've talked about in the past have a one-year time horizon or one-year period.

So what is the reasoning for this one being two years? Is it just because of the way these options are structured? Why is it two years instead of one? The reason it needed to be two years is because if we tried to do this over a one-year period, the cap is very, very low. And so we couldn't get really any cap that we thought would be attractive to anyone. So we needed to go out to two years in order to accomplish that. And so now, the important thing for people to remember is that two years, like with the one-year product, Ben, you don't have to do anything.

You just let it roll another two years. We tell you what the new cap is. And if you don't like the new cap, you can sell it and do something different. Or you can just let it roll into the future knowing you don't have any downside risk. you only get the upside of what the market's going to give you to whatever the cap is. Bruce, you mentioned there's no cost. The ETF itself charges 79 basis points. So my question to you is, if you state that the cap is 16 percent, does that mean that

you are going to get 16 percent? Or are you saying that you will only get up to 16 percent? If the market's up 40, you get 16. If the market's up 10, do you get 10 or do you get 16? Okay. So that's a great question, Michael. So, first of all, the 16.67 that I'm quoting is gross. So you're going to have to pay 79 basis points each year, basically 150 basis points.

So if the market's up 10, you're going to be up 10 percent less the 150 basis points. If the market's up 16, you're going to get the 16 less 150 base points roughly. If the market's up 20, you're still going to only get the 16.67 less the management fee. So that's what you get. Got it. All right. So let's talk about. So the reason why I would say that this is not what those people are suggesting this is, that it's misleading.

I think this is a reasonable solution. The reason why Ben and I were so bullish on innovator when we first had you on, I don't know, five years ago at this point, whatever it was, people want certainty. And if you know yourself as an investor and you know that your behavior is a very good, your past behavior is a very good, indicate of your forward behavior and that you do get nervous and that maybe I'm not that you're going to make a mistake but you just you don't want the anxiety there's nothing wrong with with giving up upside right again I think that's a very reasonable thing and I don't want to put words in your mouth I don't think that you would say that this is anybody's whole portfolio but if this is a way to keep you on track and to help you sleep a little bit knowing that a portion of your money is protected

and yes you might give up upside you're not getting dividends if if the market's up 25% you're only up 16.7 minus whatever the expense ratio is. I think that's a, I mean, call me crazy. I think that's reasonable. Just like Ben said, these are tradeoffs, right? These are tradeoffs. Do you want the upside? You know, 35% for baby boomers, they have their money in cash right now,

people that have money, wealthy individuals. They have their money in cash a lot of it. Why? Because they're nervous. Well, why when you take that 35% throw it in here, get potentially 16% of the upside, sell a little off if you need to get some cash, but at least have that money growing for you. you. Right now, if you have it sitting in cash, you're losing money because we have inflation

out there. You have erosion of your purchasing power. You're losing money. You're not making any money in these bank accounts right now. So get that money invested. Also, remember, it's not FDIC. You know, you have 250 FDIC. Here, you want an asset. I mean, you're not, you know, commingled with everybody else's cash. You own an asset. So, and, you know, credit risk isn't an issue for you here because It's the option clearing court backs this whole thing, which is backed by the government. So this is a great alternative for people. And Michael, you're exactly right. We're not recommending this for anybody's whole portfolio.

But what we're saying is this is a great tool for many people that are fearful of the market. Why do people buy bonds? Why do some people only buy bonds? They won't buy the equities, which they got hurt pretty good by. They didn't think they had to, you know, they were holding until maturity because they're fearful. of the equity market. This is a way for those people to get a better return potentially for themselves to get into the equity market but not have the risk that they're fearful of. That's what these tools are for. The foreknowledge of what your potential return will be. And in fact, with these products

that you don't have a risk of loss over two years is a great tool for many, many people. If you think of, you guys have heard of the MarketLink CDs, these banks sell these things like they're going out of style, right? This is a perfect alternative to that, but you don't have to depend on whether it's regional bank go under, will it not go under? You don't have these risks. And also with those you have phantom income. When you get your money out, it's ordinary income. You know, you have all these issues with those here. It allows you, gives you full control, full exposure, sell at any time. So this takes all that stuff that's kind of, you know, not transparent. And it puts it out in the open. It's this.

efficient as it can possibly be and allows people to do it directly rather than having intermediaries between them and the investment. That's the goal of this product. First, that cash piece is something I have a question on. So do T bill rates impact this strategy at all? Like if you're selling some options, is any of that money invested in cash? So like the Fed raised rates again this week, you know, T bill rates are pushing towards five and a half, six percent. Is any of that that option premium invested in cash? And does that have an impact at all in the return? No. This is all an options portfolio. There's nothing in T-bills. In the income products that we had before that we talked about, it does invest some in short-term T-bills. But those are based on it. Those are for income. This one here is just a very clean options portfolio that gives you the upside of the market over two years with no loss potential. That's really what it is. And so, yeah, the interest rate market or inflation has no impact on this. from a bond standpoint.

Now let me play as devil's advocate, Bruce. Yeah. I'm an investor and I can get five, five and a quarter when rates adjust for for overnight rates in cash. Right. I could just do a high yield savings or whatever. Right. Now is there enough juice in this strategy?

Like, why would I not just park my money in cash and just clip the coupons for as long as they might last? Yeah. And there's nothing wrong with doing that. if you want to do that. But if you look at it to your treasury, it's about 4.7 right now. Now, remember, what's that 4.7? That's a pre-tax number. You would have to get 11%. If you look at our 8%, you'd have to get at least 11% a year, 22% over the two years to keep pace if the market gave you the full amount of their return. But isn't your number pre-tax too?

Well, our number's pre-tax, but there's no cap gain. I mean, it continues to roll out. it defers all your gains. Whereas when you got an interest payment being made by treasury, you get the payment, but you have to pay tax on that payment at ordinary income. So taxes are not realized with T-Jule or something like that until you actually get out? Until you sell the investment. It's not realized. So it's mostly long-term and you can defer into the future. And that's why I'm saying you would need at least an 11% return. Like if you do a taxable equivalent, like for a tax free bond versus a taxable bond, if you look at this in a similar way, you need about 11% on a treasury in order to get the same return over time. So I've, okay, this might be a dumb question, but I'm going to ask it anyway because I have seen people say this.

Why wouldn't if I'm an investor and I want exposure to a product like this, why wouldn't I just buy the S&P with whatever, whatever I'm trying to allocate, let's say I do 10 grand. Why wouldn't I put $8,000 in the S&P? And then I sell a call and I buy a put. Why wouldn't I just do that instead of paying you 70-9 basis points? Absolutely. You could do that. But I think what you're going to find is is much more expensive for you to try to do that on your own than it is to just do it in this package. Can you talk about that?

How so? What do you mean by that? Well, because, you know, buying options is a very expensive proposition. And not only that, but you have to sell a call at the right spot. I mean, remember, if you're going to have it fully funded, you have to sell a call, you have to buy a call in the money. and you had to sell the put. So there's three transactions you're making in order to finance the deal. So now you could buy the spider underlying it and sell the call on the put.

It's not going to be lined up perfectly. And you could probably try to do it on your own. But at the end of the day, it's still going to be more expensive to try to do on your own. This is all done at the institutional level. So I mean, I can provide some numbers to you guys. Execution is everything. Bruce, every time I've bought it an option, I feel like. Immediately, I'm down 11%.

Like immediately, yeah, I mean, they're super expensive. Let's face it. I mean, one time I said, hey, let's buy some options, protect this portfolio. And, you know, it cost me a fortune. I'm like, I'm never doing that again. Yeah. Right. So the beauty of this is it's set up for you.

You don't have to think about it. You don't have to waste your time with it. And you know what? And most of these firms, like the big brokerdeers, these guys aren't qualified to buy and sell options. They aren't even registered to do that kind of business. And they don't want to know how to do that business. What they want to know is an expert that has it put together for them that's going to do exactly what it says it's going to do.

And that's what we're putting here together for them. Yes, it's 79 base points. That's going to be much cheaper in the long run than it's going to take for them to do it on their own. Bruce, I'm curious if you have any converts from the insurance world, people who have been selling annuities or selling these types of structured products or do they just hate you guys. Well, they're not real happy, you know, because, I mean, you can you can do this. You know, you know, if you're in a wrap account, you can just buy this thing and you get it. There's no cost to it. You get all the flexibility.

You don't get the credit. You mean, it clears up all these issues people have had in the past. You don't have a big agreement you have to sign. And let's face it, you know, some of these annuities, you've got to go out six years to get this kind of an agreement. You are tied up. And then when you get your money out, it's at ordinary income levels. And, you know, you're locked in. If you try to sell, there's a big redemption fee, surrender charge.

So here, you don't have that. And so now, the product is new. It's gathering a lot of assets. And as you guys have seen, it's been a lot of visibility in the marketplace of how can it be that there's an ETF you can't lose money on, but you get the upside of the market to a certain spot. And I think it's really got a lot of people interested in how do I participate in this and how do I use this? Innovator, our job is to help people understand these are the ways you can use it. And these are the ways that good advisors are using it and to help relay that to people. And listen, yeah, it's 79 basis points now.

But wait until I share us comes in there. And Bruce is charging 15 basis points next year. Yeah, that's not going to happen. At least I hope, you know. But let me ask you a question about that. Why did it take you, why now? Like, I feel like this is something that you probably have, I'm guessing it's been on your mind for a while.

Why now? Why is the time now right? I think a lot of people got really burned in bonds. And they feel like, you know, bond was their safe investment in the past. And a lot of them got hurt. And what we're trying to do with this as well as with our income products that we brought out, give people alternatives to just the traditional bond investments and to help them see that they can participate in the equities market and generate income for themselves or protect their

investments. I mean, these tools just haven't been available. And so we have been watching this opportunity. we had looked to do it before on a one-year basis, but it looked like, you know, the risk reward just wasn't there for people. And so we came out, you know, at a two-year level that we think is very suitable right now. The other reason I think a lot of investment professionals might be skeptical of this at first, because they're looking at this in a pool of all other investments, and they're

looking at stocks as this very long-term asset where people in the financial advice space look at this in terms of goals. And so if you, the way that I think of, especially if you, if you want to stick with a two-year time horizon, let's say your child is going to college. You know you're going to have to pay that in a certain amount of time, right? In two years, I'm going to be writing a check. I want to have that money protected, but I also want to have it potentially go up. Michael and I had questions all the time when rates read zero of where do I, where do I save my money for my down payment or my wedding? And I want to actually earn something. But I don't want to lose that money because if it's not there when I need it, then I'm screwed. Right. So I think

in terms of like goals-based investing, if you're not measuring it against the stock market over 20, 30, 40 years, obviously it's going to lose. But if you're measuring it in terms of goals and this two-year time frame, I think it makes a little more sense to think about it that way. Yeah. And I mean, just and I think that's right, Ben. And I, you know, think about if you're in retirement or close to retirement. I mean, you want exposure to the equity market. You know that you need to do that to grow your assets. But there's nothing been really available to you unless you want to really tie your money up and subpar product structures. Now there's a product structure available that makes that available to you that you can get the upside of the market without the

risk of the downside. I mean, why wouldn't you do that? I can see many, many investors, you know, that are nearing retirement saying, yeah, this is a great tool for me. You guys know that, you know, having a large cash position in your portfolio significantly hampers the return of the overall portfolio. I mean, why wouldn't you take that portion and put it in here if at worst you're going to do, you're not going to make any money, but at best you can make up to, you know, 16% over a couple of years. It makes a lot of sense for people to do that. And so it's just another tool that they can deploy that they haven't had access to. And a lot of these investors, you know, are the advisors that may be concerned about it. They just haven't thought about it before.

They, you know, it's a new thing for them. And they've got to get comfortable and get their arms around it to understand really what does this do for me and that's our job like I said you know to help them understand this is why and how you use this product the upside is obvious right like okay you're wait you're telling me that there's no risk to the downside is that really what you're telling me i can get up to 60 percent but i think everybody gets that even though it might send off like alarm bells like wait how could this be if if there's if there's no risk and there can be no reward but in this case you're saying there's no risk and there actually can be reward so let's I just want to be very clear that you have to give up something, right?

Like, there is, there really is no free lunch, and we know that you're not an alchemist. So let's just lay it out there. I feel like we've done it already, but just to be very, very clear, here's what you're not getting. And tell me what else I'm missing. You're not getting the dividend, right? You're not getting the dividend. So if the S&P is up 13% over the next two years, you tack on another 3% with two years with the dividends, you're not getting that.

Okay, we get that. If it's a bold market, if the market is up 20% and 19%, which, which happens all the time, you're not getting that. You're not getting that. You're not getting that. So it's, but again, I keep coming back to the fact that I think give investors a little bit of credit. They understand the outcome is defined.

And I think that's what people find so attractive. Is yeah, I get it. I know if it's a bull market, I'm not getting 40% returns. But if it's a bare market, I'm not getting that either. And that's what I'm signing up for. So I think if I could just channel like, why are investment professionals may be upset? I don't know if jealousy is the right word. but maybe they feel like, man, this is going to be such a, this is going to gather so much

money and look at the fees that they're going to generate and I could do something better. I don't, so I don't know if that's jealousy. I don't necessarily think, but it's just there's, it's saltiness. They're salty. Yeah. They may be a little salty, but, you know, I think they're going to come around. They're going to say, hey, I can use this in my business to grow my business. And I think we're seeing a lot of that, like I light bulbs come on for guys of like you said,

you know, I'm planning for something or I can't, you know, I can't afford. to lose my money in retirement. I have to keep, I don't want to go back and get a job. I don't want to risk any money, but I want the upside of the money. You know, there's so many ways to use this. I mean, how many advisors have clients to just say, yeah, I don't want any money in the equity market. You know, you see how much it's up today? It could crash tomorrow. A lot. Yeah, yeah, it's a huge. I don't want to risk it. You know what? I'll put this in at the top. If the market crashes, I'll lose nothing, but I can get the upside if there's any upside. So for those people, Well, what's a better solution as an advisor?

You twist their arm to get them invest. Now, listen, maybe they're not a great client and that's a separate conversation, but you twist their arm into submission to get them into the stock market. The stock market falls 10% that they're mad at you or they want to sell. Or you say, okay, I know this is my client. They might be a bit of a pain in the neck and they might not really understand what we're trying to do for them. But in order to get them to where they need to be, I need to get them to take a little bit

of risk. And this is a way that they can actually implement it in a way that is suitable with their personality. I don't, I'm sorry. I just don't see anything wrong with that. And you know, at the end of the day, people don't look at the ups, the loss of the upside over 16% as risk as much. It's lost opportunity. Who knows if it's going to go there. So it's like bird in the hand, two in the bush. You know, they're kind of like, I know what I got. I mean, I might lose that, but you know what I like is knowing I'm not going to lose any money. That's the burden of hand. And yeah. And so I think this tool is going to be a great tool for advisors. And it's like anything, you know, when

ETFs came out originally, a lot of people wouldn't sell them because they like, I'm not going to ever sell an ETF. When we started PowerShears, they would say that. I'm like, well, why not? And they're like, well, because my client can go buy this themselves, you know, on whatever. I'm like, but they can buy IBM. They can buy Microsoft. They can buy any of these themselves. Are you not going to sell them one of these other stocks because they can buy them themselves? No, you're selling them stocks. So this is a tool that needs to be is best wielded in the hands of an advisor. I would agree with that.

And it's a great tool. And, you know, you're going to find us saying these need to be an advisor's hands. And the reason we're bringing them is for them. And because we thought from a risk management perspective, there were not good tools available for advisors in the marketplace. You know, just having a switching strategy or relying on, you know, volatility or things like that, just doesn't do it for an advisor. You need to have more certainty over what the future outcome might be.

And these tools are designed to give them that. We've talked in the past about if you get some of your caps on some of these products, maybe you would think about, well, if my downside cap has reached, my upside cap has reached, maybe I would roll over a new product. I think some of the other ones, until it's gotten critical mass, you've maybe done these on a quarterly basis. Is that the same thing with this? Or you're going to be rolling these out monthly.

If someone wants to. Hold on just to jump in, you can't, if you're at your cap, you can't cash out at the cap. Is that right, Bruce? Like, you have to wait for the two years? Well, no, if you're at your cap and you want to roll out, you can do it. So let's say that the SEP is up 16% over the next 10 months. Yeah.

And you want to get out. You're not going to be out. You're not going to get the 16%. You're not going to get 16. You're going to maybe be up 8 or something like that. You're going to be up in the middle. You know, you got to wait two years to get there. But let's say you say, I don't care.

I'm rolling out and I'm going to roll into the new one. I'm going to get a new cap of 20 or another 16. and no downside right in a year you want to roll into a new one and lock in whatever you've made you're like I don't care I'm still getting the upside over the next year I'm going to roll over and get the new one extend to extend two years again that's available to people people do that all the time they step up you know they're with this when you're locking in where you are you continue to step up and lock in the game and so I can see some people say yeah I'm only up eight but I'm gonna I'm gonna take that off the table and make sure I keep that and so they might do that

You know, so those strategies are available to advisors to deploy for their clients if they choose to do so. Perfect. Where do we send people to learn more, Bruce? Go to innovatoretoffs.com. Perfect. Thanks, as always. We appreciate it having on. Yes, thanks for having me.

It's been great. Good to see you. Thanks, Bruce. Okay, thanks again to Bruce and Innovator ETF. Remember, it's innovatoretefs.com. Send us an email, analyst here's pod at gmail.com, and we'll see you next time. Thank you.