On Friday, Allianz Investment Management LLC (AllianzIM), a wholly-owned subsidiary of Allianz Life Insurance Company of North America (Allianz Life®), launched a new buffered outcome ETF with a six-month outcome period: the AllianzIM U.S. Large Cap 6 Month Buffer10 Apr/Oct ETF (NYSE: SIXO).
AllianzIM’s new ETF seeks to match the returns of the S&P 500 Price Return Index up to a stated cap while providing downside risk mitigation through a buffer against the first 10% of S&P 500 Price Return Index losses for SIXO over a six-month outcome period. SIXO seeks to meet its investment objective using flexible exchange (FLEX) options.
| Ticker | Index Exposure | Buffer (1) | Cap (1) | Outcome Period Start Date | Outcome Period End Date |
|---|---|---|---|---|---|
| SIXOAllianzIM U.S. Large Cap 6 Month Buffer10 Apr/Oct ETF | S&P 500 | 10% Gross / 9.63% Net | 6.00% Gross / 5.63% Net | October 1, 2021 | March 31, 2022 |
“The buffered outcome ETF market has grown dramatically, increasing from zero to almost $8 billion of assets in just three years,” said Johan Grahn, vice president and head of ETF strategy at AllianzIM. “We’re excited to expand our lineup of Buffered Outcome ETFs to meet the evolving risk management needs of investors. SIXO is the latest addition to our Defined Outcome ETF lineup, providing investors with an opportunity to participate in the equity market up to a cap in an ETF that provides a 10% buffer against losses and the potential for gains to be realized every six months.”
SIXO debuts as one of the lowest-cost buffered outcome ETFs on the market, with an expense ratio of 0.74%. The ETF is designed to create more opportunity for investors with two outcome periods per year and provide additional applications within an investment portfolio. SIXO provides the potential for more significant downside mitigation with a 10% buffer over a shorter period and can serve as a potential alternative to short-term, low-yielding investment vehicles.
The six-month outcome ETF joins the existing suite of AllianzIM Buffered Outcome ETFs with a 10% and 20% buffer, which offer a one-year outcome period. The AllianzIM U.S. Large Cap Buffer10 Oct ETF (AZAO) and the AllianzIM U.S. Large Cap Buffer20 Oct ETF (AZBO) begin a new one-year outcome period with new upside caps.
| Ticker | Index Exposure | Buffer (1) | Cap (1) | Outcome Period Start Date | Outcome Period End Date |
|---|---|---|---|---|---|
| AZAOAllianzIM U.S. Large Cap Buffer10 Oct ETF | S&P 500 | 10% Gross / 9.26% Net | 12.75% Gross / 12.01% Net | October 1, 2021 | September 30, 2022 |
| AZBOAllianzIM U.S. Large Cap Buffer20 Oct ETF | S&P 500 | 20% Gross / 19.26% Net | 6.80% Gross / 6.06% Net | October 1, 2021 | September 30, 2002 |
The AllianzIM Buffered Outcome ETFs seek to leverage AllianzIM’s core strengths, including risk management experience and in-house hedging capabilities. As part of one of the largest asset management and diversified insurance companies in the world, AllianzIM, with AUM of $16.4 billion, is powered by the same proprietary in-house hedging platform that is used among affiliates to help manage more than $145 billion in hedged assets for institutional and retail investors around the globe. Offering a new way to help investors seek to mitigate risk and reduce volatility, these new ETFs complement Allianz Life’s suite of annuity and life insurance products.
“We’re focused on expanding our defined outcome product suite to help investment professionals and their clients navigate today’s historically low interest-rate environment and market uncertainty,” said Brian Muench, president of AllianzIM. “The launch of the new AllianzIM Buffered Outcome ETF with a six-month outcome period is the latest evolution in this process. We look forward to continuing to work closely with investment professionals to remain on the cutting edge of risk mitigation.”
For more information on the AllianzIM Buffered Outcome ETF suite, please visit www.allianzIM.com.
(1) Gross reflects the Cap and Buffer prior to taking into account the 0.74% expense ratio of the ETF, while Net accounts for the expense ratio over the stated outcome period, but does not include brokerage commissions, trading fees, taxes and non-routine or extraordinary expenses. The Cap and Buffer experienced by investors may be different than the stated numbers. The funds’ website, www.allianzIM.com, provides important fund information as well as information relating to the potential outcomes of an investment in the fund on a daily basis.
