Crash-Proof Investing? New Innovator ETF Promises Downside Buffer

Innovator ETFs on Thursday introduced its newest fund, the Innovator Equity Defined Protection ETF ZJUN, a fund that delivers investors complete downside protection for a period of one year while sharing in the upside of the SPDR S&P 500 ETF Trust (SPY), up to a cap.

ZJUN offers exposure to the return of SPY price, but with a 100% downside buffer built in (prior to fees and expenses). Investors who maintain the fund for the entire outcome period of June 2025 to June 2026 are safe from losing money, regardless of how bad the market declines. The gain does have a limit on it, however, at 7.30% for the current period, net of fees and expenses.

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The ETF employs FLEX Options (Flexible Exchange Options) to design its risk-reward profile. Such tailored options enable the fund to provide its special protection and cap features independent of bank guarantees or credit products.

ZJUN is included in Innovator’s larger 100% Buffer ETF family, which seeks to offer retail and institutional investors a choice to conventional fixed income and cash investments. With interest rates remaining high and bonds experiencing reinvestment risk, ZJUN may be attractive to investors that are seeking to redeploy stuck cash without exposing themselves to full equity market returns.

Other advantages highlighted by Innovator are tax efficiency, the ETF format keeps taxable distributions to a minimum—and liquidity on a daily basis, a more liquid alternative to structured notes or annuities.

What’s The Catch?

Though ZJUN provides attractive downside protection, holders have to hold the ETF throughout the entire outcome period in order to benefit from its specified results. Purchasing in after the period has started, or redeeming prematurely, may result in outcomes that are far from the specified goals.

Also, though the downside is completely buffered, upside returns are constrained by the cap, which is established at inception and may vary with each outcome period reset. Thus, the fund is most appropriate for conservative investors who are willing to sacrifice some upside potential for a cushion.

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