Allianz Investment Management has added two new ETFs to its suite of Buffered Exchange Traded Funds: the AllianzIM U.S. Large Cap Buffer10 May ETF and the AllianzIM U.S. Large Cap Buffer20 May ETF. The new ETFs have 12-month outcome periods with a 10% and 20% buffer.
With Americans growing anxious over their financial security, Buffered ETFs seek to offer investors expanded access to equity markets through innovative risk mitigation strategies. The ETFs seek to offer a downside Buffer of 10% or 20% against market drops while allowing investors the opportunity to participate in the upside potential of the SPDR S&P 500 ETF Trust up to a stated Cap.
| Ticker | Reference Asset | Buffer1 | Cap1 | Outcome Period Start Date | Outcome Period End Date |
|---|---|---|---|---|---|
| MAYT | SPDR S&P 500 ETF Trust | 10% Gross / 9.26% Net | 19.42% Gross / 18.68% Net | 1-May-23 | Apr. 30, 2024 |
| AllianzIM U.S. Large Cap Buffer10 May ETF | |||||
| MAYW | SPDR S&P 500 ETF Trust | 20% Gross / 19.26% Net | 12.98% Gross / 12.24% Net | 1-May-23 | Apr. 30, 2024 |
| AllianzIM U.S. Large Cap Buffer20 May ETF |
1Gross reflects the cap and buffer prior to considering 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.
Defined outcome ETFs have recently gained momentum because they protect the downside during times of uncertainty. AllianzIM’s Buffered ETFs provide investors the opportunity to participate in U.S equity markets while seeking to offer a buffer against losses.
“Advisors are increasingly embracing defined outcome ETF as the funds support end clients’ ability to manage risk and stay invested,” said VettaFi’s head of research Todd Rosenbluth.
The AllianzIM Buffered ETFs seek to leverage AllianzIM’s risk management experience and in-house hedging capabilities. Offering a new way to help investors to mitigate risk and reduce volatility, these ETFs complement Allianz Life’s suite of annuity and life insurance products.
Offered at an expense ratio of 74 basis points, AllianzIM’s suite of Buffered ETFs is offered with six and 12-month outcome periods. The 12-month outcome period of the May ETF series will be from May 1, 2023, to April 30, 2024. Each outcome period reflects a new stated cap commensurate with prevailing market conditions, allowing investors to remain invested with a level of risk mitigation.
“The tug of war between the Fed and the market continues and recession fears fuel uncertainty and volatility that keep some investors on the sidelines,” said Johan Grahn, head ETF market strategist at AllianzIM in a news release. “In these times of market uncertainty, we believe our Buffered ETFs provide investors a cushion against the S&P 500 downside of up to either 10% or 20%, while still offering upside potential in market rallies.”
AllianzIM President Brian Muench added: “The latest additions to our Buffered ETFs series reaffirm our commitment to helping investors achieve their financial goals in any market environment. We look forward to continuing to thoughtfully develop products that align with investor needs.”
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