PAUG vs PSMJ

PAUGCInnovator U.S. Equity Power Buffer ETF - August

PSMJBPacer Swan SOS Moderate (July) ETF

In short

PAUG A shock absorber with a calendar. PAUG soaks up the first 15% of losses on an S&P 500 ETF over each roughly one-year stretch, trades away some upside via a cap, then resets every August 1.

PSMJ Pacer's July-dated stop on the Swan SOS ladder: FLEX options on SPY that buffer the first 15% of a fall over a roughly one-year period, with upside capped in return. At 0.49%, it undercuts most of the buffer aisle.

Stated mandate

PAUG PAUG seeks to track SPY up to a predetermined upside cap while protecting the first 15% of losses over an approximately annual outcome period, resetting at the end of each period.

PSMJ The Fund seeks to track the returns of the SPDR S&P 500 ETF Trust up to a predetermined cap while providing a downside buffer over an approximately one-year period.

Why people hold it

• PAUG The first 15 percentage points of reference-fund losses over the outcome period are absorbed before you feel anything. That buffer is written into the fund's documents, not left to a manager's judgment.innovatoretfs.com
• What's being shaped is plain vanilla US large cap: the reference asset is SPY, the S&P 500 tracker, not a bespoke smart-beta index built for the brochure.
• Live since August 2019, so the annual reset has run through several very different markets. It also has eleven monthly siblings, so the choice is a start date, not a strategy.
• Among the stronger implementations in a crowded buffer field, where a lot of look-alike funds charge similar money for similar mechanics.

• PSMJ Charges 0.49% a year against a 0.79% median for its buffered-SPY cohort, the same 0.79% Innovator's Power Buffer funds (PJUL, PJAN, POCT) charge for a similar job.
• The deal is legible: FLEX options on SPY absorb the first 15% of a decline over the outcome period, and match the ETF's gains up to a cap struck each July.paceretfs.compaceretfs.com 2
• Those FLEX options are customizable exchange-traded contracts settled through the Options Clearing Corporation, and Durango-based Swan Global Management sub-advises the strategy.paceretfs.com
• One of four Moderate-series funds with staggered start months (PSMD, PSMR, PSMJ, PSMO), so a July reset can be stacked against other entry points rather than standing alone.paceretfs.com

Worth knowing

• PAUG Upside is capped, and the cap is set fresh each period. Buy mid-period and you inherit whatever cap and buffer remain, which can look nothing like the headline terms.
• 0.79% a year is the price of the options engineering. It sits right at the median for buffer funds and well above plain index exposure.
• One of the quieter tickers in a busy category, so limit orders and a look at the spread matter more here than with a mega-fund.

• PSMJ The 15% buffer and the cap belong to the full outcome period. Step in mid-period and you inherit whatever cap and buffer remain, not the starting terms.paceretfs.com
• Thinly traded next to the largest buffer funds, so spreads and limit orders deserve more of your attention at the point of entry.
• No regular income stream here: the options structure delivers its result through share price rather than distributions.paceretfs.com

Full PAUG profile⁠

Full PSMJ profile⁠