Graham Day joins us to talk about the best EFT diversification you can have in your investment portfolio. Graham shares his experience in the ETF world, from his start at PowerShares in 2008 to co-founding Innovator ETFs in 2017.
Innovator introduced defined outcome ETFs, giving investors structured returns with protection against losses that were once only for the rich or through pricey products. They developed buffer ETFs, which limit potential gains but provide set protection against downturns, helping manage risk while keeping investments easy to sell and tax-friendly.
The conversation looks at how these ETFs stack up against traditional financial products, their use in managing investment portfolios, and more.
Today we discuss...
- Graham Day shares his background in ETFs, starting at PowerShares and later co-founding Innovator.
- Innovator aims to make structured investment strategies more accessible through ETFs.
- Defined outcome ETFs provide equity market exposure with downside protection.
- Buffer ETFs rebalance annually without creating taxable events.
Innovator also offers accelerated ETFs, which provide leveraged upside with downside limits. - Simplicity is key—structured products are often complex and difficult for advisors and clients to understand.
- Innovator ETFs aim to provide strategic, risk-managed solutions that fit into modern portfolios.
- Many advisors have used buffer ETFs as a bond alternative due to known downside protection.
- Buffer ETFs performed well compared to both bonds and stocks in recent years.
- Active management underperforms long-term, with 95% of managers lagging the S&P 500 over a decade.
- Investors often underperform the market due to poor timing and emotional decision-making.
- Buffer ETFs help investors stay invested by reducing the fear of market downturns.
- Some investors allocate 20-25% of portfolios to buffer ETFs for meaningful impact.
- Market predictions are unreliable, making defined-outcome strategies appealing.
- Innovator aims to provide certainty in an uncertain investing environment.
For more information, visit the show notes at https://moneytreepodcast.com/best-eft-diversification-graham-day-686
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