Crash-Proof Funds

WORRIED ABOUT A BUBBLE? INNOVATOR CAPITAL HAS 160 ETFS DESIGNED TO LET YOU RIDE THE BULL MARKET WITH YOUR SEAT BELT SECURELY FASTENED.

- by HANK TUCKER

The Innovator's Solution Bruce Bond (left) says most stock investors are "completely naked." For a generous fee, he and John Southard (right) offer layers to weather a brutal market storm.

The stock market has been on a feverish tear. A $100,000 investment in the S&P 500 in 2009, immediately after the financial crisis, would be worth more than $1 million today. But as the bull market continues to charge, plenty of people are worried about a crash. According to the St. Louis Federal Reserve, a record $7.5 trillion is sitting on the sidelines in money market funds, up 57% from $4.8 trillion five years ago.

Bruce Bond and John Southard of Wheaton, Illinois-based Innovator Capital Management have a remedy for scaredy-cat investors. Their $28 billion (assets) Innovator specializes in bubble-protection ETFs, technically known among advisors as defined-outcome funds. They use options contracts to hedge against losses, which also limits upside returns, but it might be worth it for peace of mind. Innovator’s most popular funds are its U.S. Equity Power Buffer ETFs, which protect investors from the first 15% of the S&P 500 losses in a year, and currently offer an upside return of up to 13%.