Innovator IBD 50 ETF (FFTY) Covered Calls

The Innovator IBD 50 ETF (FFTY) is a passively managed exchange-traded fund that tracks the IBD 50 Index. This rules-based, computer-generated index is designed by Investors Business Daily (IBD) to identify the top 50 high-growth stocks listed on U.S. exchanges. The fund provides concentrated exposure to companies with strong fundamental and technical characteristics, including robust earnings growth, high return on equity, and relative price strength.

You can sell covered calls on Innovator IBD 50 ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for FFTY (prices last updated Fri 3:25 PM ET):

Want to make money with covered calls?  Sign Up For A Free Trial

The Innovator IBD 50 ETF (FFTY) is a high-conviction investment vehicle that provides exposure to the "leading" edge of the U.S. growth market. The fund tracks the IBD 50 Index, a flagship benchmark curated by Investor’s Business Daily that utilizes the famed CAN SLIM investment methodology. Unlike broad growth indices, FFTY is designed to capture the 50 stocks showing the most significant price momentum and earnings acceleration at any given time, making it a dynamic tool for growth-oriented investors.

The fund employs a full replication strategy, investing in the exact constituents of the IBD 50 Index. The index is rebalanced weekly, ensuring that the portfolio remains populated with current market leaders and quickly removes companies that lose their momentum or fundamental strength. This high-turnover, rules-based approach allows the fund to pivot across various sectors as market leadership shifts, often resulting in a portfolio that looks significantly different from the S&P 500 or the Nasdaq-100.

Core Business and Products

The core "product" of FFTY is its concentrated portfolio of 50 U.S.-listed stocks. The selection process filters the universe for companies with high "Relative Strength" (RS) ratings and strong earnings per share (EPS) growth over the trailing four quarters. While the fund is sector-agnostic, its methodology often results in heavy weightings in Industrials, Information Technology, and Healthcare. Current top holdings often include momentum leaders like Vertiv Holdings, Sterling Infrastructure, and Micron Technology.

Competitive Landscape

FFTY operates in the highly competitive "Smart Beta" and growth ETF category. It competes against large, low-cost passive growth funds as well as thematic and actively managed innovation products. Investors choose FFTY for its specific adherence to the IBD methodology, which prioritizes performance momentum. Key competitors include:

1. Invesco QQQ Trust: The standard for large-cap growth and technology exposure, though it is less concentrated and less frequent in its rebalancing than FFTY.
2. Invesco S&P 500 Top 50 ETF: A direct rival that tracks the 50 largest companies in the S&P 500, offering a mega-cap alternative to the mid-cap growth tilt of FFTY.
3. ARK Innovation ETF: An active competitor that targets disruptive innovation, often holding similar high-growth names but with a focus on long-term technological themes rather than pure price momentum.
4. iShares MSCI USA Momentum Factor ETF: A factor-based competitor that targets stocks with strong price trends across a much broader universe of companies.
5. Vanguard Growth ETF: A low-cost, broad-market growth alternative for investors seeking diversified exposure without the high turnover of a 50-stock index.

Strategic Outlook and Innovation

The strategic outlook for FFTY is intrinsically linked to the "Growth" cycle of the U.S. economy. Because the fund selects the most aggressive growers, it tends to outperform during bull markets and periods of technological expansion but can experience higher volatility during market corrections. The fund’s issuer, Innovator Capital Management (recently integrated into the Goldman Sachs ecosystem), focuses on providing "defined outcome" and thematic strategies that allow sophisticated investors to manage risk while chasing alpha.

Innovation within the fund is driven by the refinement of the IBD 50 Index’s computer-generated screens. As market data becomes more real-time and granular, the filters for sales growth, profit margins, and institutional sponsorship are constantly optimized to identify the "next big winners" before they become household names. FFTY’s weekly rebalancing remains its most innovative feature, allowing it to adapt to changing market leadership with a speed that few other index-based ETFs can match.

Want more examples? FFIV Covered Calls | FG Covered Calls