Allianz Investment Management has expanded its lineup of monthly Buffered ETFs with the launch of two U.S. large-cap November funds. The two new ETFs are the AllianzIM U.S. Large Cap Buffer10 Nov ETF ((NVBT )) and the AllianzIM U.S. Large Cap Buffer20 Nov ETF ((NVBW )).
As market conditions remain turbulent due to aggressive Federal Reserve tightening and stubborn inflation, the new funds provide additional tools for investors to mitigate risk in portfolios. AllianzIM’s Buffered ETFs seek to provide downside risk mitigation through a buffer against the first 10% and 20% of market losses and offer upside potential by tracking the share price returns of the SPDR S&P 500 ETF Trust up to a stated cap. The new November ETFs feature a 12-month outcome period and initial cap noted below.
| Ticker | Cap1 | Buffer1 | Outcome Period |
|---|---|---|---|
| NVBT | 26.75% Gross / 26.01% Net | 10% Gross / 9.26% Net | Nov. 1, 2022 to Oct. 31, 2023 |
| NVBW | 16.90% Gross / 16.16% Net | 20% Gross / 19.26% Net | Nov. 1, 2022 to Oct. 31, 2023 |
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, 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, at www.allianzIMetfs.com, provides important fund information as well as information relating to the potential outcomes of an investment in the Fund on a daily basis.
“Given the volatility in equity markets right now, we have found that investors want more options in the Buffered ETF space,” said Johan Grahn, head of ETF market strategy at AllianzIM, in a news release. “As these challenging conditions persist, investors increasingly understand and appreciate how Buffered ETFs can help by allowing them to participate in market upside with downside buffers against losses.”
Offered at an expense ratio of 74 basis points, AllianzIM’s suite of buffered ETFs with six- and 12-month outcome periods allows investors to invest in ETFs with new caps and buffers every month. The 12-month outcome period of the November series ETFs will be from November 1, 2022, to October 31, 2023. Each outcome period reflects a new stated cap commensurate with prevailing market conditions, allowing investors to remain invested with a level of risk mitigation.
“Launching a monthly series helps meet investor demand in the rapidly growing Buffered ETF space,” added Brian Muench, president of AllianzIM. “After carefully observing ETF market flows and the strong desire from investors who value pre-defined outcomes of downside mitigation in their portfolios, we decided to provide more entry points as investors tend to buy these products near the start of an Outcome Period.”
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