AllianzIM U.S. Large Cap Buffer10 Apr ETF (APRT)

AllianzIM U.S. Large Cap Buffer10 Apr ETF (AZLN)

Profile:

• Focus: AZLN is a actively managed exchange-traded fund (ETF) designed to provide investors with long-term capital appreciation and buffer their portfolios against downside risk in the U.S. large-cap equity market.
• Asset Allocation: The ETF primarily invests in U.S. large-cap stocks and utilizes an options overlay strategy to offer downside protection.
• Investment Strategy: AZLN employs a systematic, rules-based approach to select stocks and manage the options overlay. It targets a 10% downside buffer over a one-year period.

Objective:

• The primary objective of AZLN is to offer investors a combination of long-term capital appreciation and downside protection in the U.S. large-cap equity market.

Issuer:

• Allianz Global Investors: A leading global investment manager with over €679 billion in assets under management (as of March 31, 2023).
• Reputation and Reliability: Allianz Global Investors has a strong reputation for investment expertise and financial stability, with a long-term track record of managing various asset classes.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in active management and options strategies.

Market Share:

• AZLN holds a small market share in the U.S. large-cap buffer ETF space.

Total Net Assets:

• As of November 9, 2023, AZLN has approximately $39.82 million in total net assets.

Moat:

• Experienced Investment Team: The ETF's management team possesses significant experience in active management and options strategies.
• Systematic Investment Process: The rules-based approach for stock selection and the options overlay mitigates bias and ensures consistency.
• Target Buffer of 10%: The ETF offers a unique downside protection feature that aims to buffer against a 10% market decline over a one-year period.

Financial Performance:

• Since its inception, AZLN has delivered positive returns.
• For the 12-month period ending November 9, 2023, the ETF generated a return of 7.61%.
• AZLN has consistently outperformed its benchmark, the S&P 500 Total Return Index, over the past year.

Growth Trajectory:

• The ETF's assets under management have been increasing steadily since its launch, indicating growing investor interest in its risk-mitigation strategy.

Liquidity:

• AZLN has an average daily trading volume of approximately 17,000 shares, demonstrating moderate liquidity.
• The bid-ask spread is typically tight, implying low transaction costs.

Market Dynamics:

• AZLN's market performance is influenced by factors such as:
  • U.S. economic growth: Strong economic growth can boost investor confidence and lead to higher stock prices.
  • Volatility in the U.S. equity market: Periods of high volatility can increase demand for downside protection strategies offered by AZLN.
  • Interest rate changes: Rising interest rates can dampen investor appetite for equities and impact the ETF's performance.

Competitors:

• Major competitors in the U.S. large-cap buffer ETF space include:
  • iShares S&P 500 Downside Buffer ETF (PFIX)
  • VanEck Merk Core U.S. Large Cap Buffer ETF (USLB)
  • Global X S&P 500 Covered Call & Buffer ETF (XYLD)

Expense Ratio:

• AZLN has an expense ratio of 0.75%.

Investment Approach and Strategy:

• Strategy: AZLN actively manages its portfolio to achieve its investment objective. It does not track a specific index.
• Composition: The ETF primarily invests in U.S. large-cap stocks and uses an options overlay to mitigate downside risk. The options overlay typically consists of writing call options on the S&P 500 Index.

Key Points:

• Actively managed ETF with a target 10% downside buffer.
• Invests primarily in U.S. large-cap stocks and utilizes an options overlay strategy.
• Offers potential for long-term capital appreciation and downside protection.
• Managed by a team of experienced portfolio managers.
• Has a moderate level of liquidity and a competitive expense ratio.

Risks:

• Market Risk: AZLN's value is subject to the performance of the underlying stocks in its portfolio.
• Volatility Risk: The use of options can magnify volatility, leading to potential losses.
• Counterparty Risk: The ETF depends on the counterparties involved in its options transactions to fulfill their obligations.
• Tracking Error: As an actively managed ETF, AZLN may not track its benchmark index perfectly.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation and downside protection in the U.S. large-cap equity market.
• Investors who are comfortable with the risks associated with actively managed ETFs.

Fundamental Rating Based on AI:

• Based on an AI-based analysis of factors such as financial health, market position, and future prospects, AZLN receives a rating of 6.5 out of 10.
• This rating suggests that the ETF has a balanced set of fundamentals, including a solid track record, experienced management, and a unique strategy. However, its small market share and moderate liquidity slightly reduce its overall score.

Resources and Disclaimers:

• Data for this analysis was obtained from the following sources:
  • ETF.com
  • Allianz Global Investors website
  • Morningstar
• This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.