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AllianzIM launches two new buffered ETFs that hedge the S&P 500 exposure


Allianz Investment Management LLC (AllianzIM), a wholly-owned subsidiary of Allianz Life Insurance Company of North America has announced the launch of its February series of US Large Cap Buffered Exchange Traded Funds (ETFs). 

The series includes two ETFs with a 12-month Outcome Period: the AllianzIM U.S. Large Cap Buffer10 Feb ETF (NYSE Arca: FEBT) and the AllianzIM U.S. Large Cap Buffer20 Feb ETF (NYSE Arca: FEBW).

The February series is the latest expansion of AllianzIM’s U.S. Large Cap Buffered ETFs, offering investment professionals and investors access to new risk mitigation strategies as market uncertainty persists and fears of a recession mount in 2023. The ETF suite is designed to provide a downside Buffer of 10 per cent or 20 per cent 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.

According to Allianz Life’s Q4 Quarterly Market Perceptions study, nearly two in three Americans (64 per cent) say they would rather have their money sit in cash than endure market swings. AllianzIM’s expanded line-up allows weary investors to remain invested through market drops.

“Our Buffered ETFs make it easier for investors sitting on cash to get back into the market without jumping head first into the deep end,” says Johan Grahn, Head ETF Market Strategist at AllianzIM. “Investors that are concerned about down-side risk in the US equity market have an opportunity to add a Buffered ETF allocation to their portfolios to provide explicit risk mitigation of either 10 per cent or 20 per cent while still participating in US equity returns up to a Cap if things turn out better than they expected.”

Offered at an expense ratio of 74 basis points, AllianzIM’s extensive suite of Buffered ETFs is offered with six and 12-month Outcome Periods. The 12-month Outcome Period of the February series ETFs will be February 1, 2023 to January 31, 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.

2022 provided few places to hide from volatility as the S&P 500 ended at -19.44 per cent. However, the AllianzIM U.S. Large Cap Buffer20 Jan ETF (JANW) closed the year at -0.65 per cent, proving to be an effective portfolio strategy, the firm writes. AllianzIM’s suite of Buffered ETFs were listed as one of the fastest-growing ETFs in 2022 (Morningstar Direct, October 2022).

“The Allianz team is passionate about supplying investors with the tools needed to navigate volatility and manage risk,” says Brian Muench, president, AllianzIM. “We saw a tremendous demand for risk mitigation strategies in 2022 and we’re excited to offer yet another series of our Buffered ETF to eager investors.”

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