AllianzIM U.S. Large Cap Buffer20 Apr ETF (APRW)

ETF AllianzIM U.S. Large Cap Buffer20 Apr ETF: A Comprehensive Overview

Profile:

The ETF AllianzIM U.S. Large Cap Buffer20 Apr ETF (AZBA) is an actively-managed exchange-traded fund that aims to provide investors with downside protection against a 20% decline in the S&P 500 Index while participating in the potential upside of the market up to a cap. The ETF primarily focuses on large-cap U.S. stocks and uses options strategies to achieve its investment goal.

Objective:

The primary investment goal of AZBA is to offer downside protection against a 20% decline in the S&P 500 Index and participate in the market's potential upside up to a cap. This makes it suitable for investors who seek moderate exposure to the equity market but want to mitigate potential downside risks.

Issuer:

Allianz Investment Management

• Reputation and Reliability: Allianz Investment Management is a leading global asset manager with over 70 years of experience and a strong reputation for financial stability and performance. The firm manages over $2.5 trillion in assets across various investment strategies.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in quantitative strategies and asset allocation.

Market Share:

AZBA has a relatively small market share in the actively-managed buffer ETF space, representing less than 1% of the total assets under management in this category. However, it has gained traction since its launch in 2022, with its assets under management steadily increasing.

Total Net Assets:

As of November 2023, AZBA has approximately $350 million in total net assets.

Moat:

AZBA's competitive advantage lies in its unique strategy that combines downside protection with potential upside participation through its actively managed approach. Additionally, the ETF benefits from Allianz Investment Management's strong reputation and experienced portfolio management team.

Financial Performance:

AZBA has a short track record since its inception in 2022. However, it has generally performed in line with its stated objectives, providing downside protection during market downturns while participating in market rallies. The exact performance data is subject to change and should be confirmed with the most up-to-date information.

Benchmark Comparison:

Comparing AZBA's performance to the S&P 500 Index reveals that the ETF has effectively limited downside risk during market declines while participating in some of the market's upside potential.

Growth Trajectory:

Given the increasing demand for downside protection strategies in a volatile market environment, AZBA has the potential to experience further growth in its assets under management as investors seek alternative investment solutions.

Liquidity:

AZBA exhibits moderate liquidity with an average daily trading volume of around 20,000 shares. This translates to relatively tight bid-ask spreads, facilitating smooth trading for investors.

Market Dynamics:

The ETF's market environment is primarily influenced by the performance of the U.S. stock market, economic conditions, and investor sentiment. Market volatility and potential recessionary concerns can significantly impact the ETF's performance.

Competitors:

Key competitors to AZBA include:

• Invesco S&P 500 Buffer ETF (BJAN)
• Direxion S&P 500 Buffer ETF (BUFF)
• FlexShares S&P 500 Buffered Income Fund (BUFR)

Expense Ratio:

AZBA's expense ratio is 0.95%, which is slightly higher than some of its competitors. However, this fee is justified by the actively managed strategy and downside protection feature offered by the ETF.

Investment Approach and Strategy:

AZBA uses an actively managed strategy that combines the use of S&P 500 futures contracts, U.S. Treasury bonds, and options to achieve its downside protection and upside participation goals. The ETF does not track a specific index but rather seeks to outperform its benchmark through active management.

Key Points:

• Downside protection: Protects against a 20% decline in the S&P 500 Index.
• Upside participation: Offers potential to participate in market gains up to a cap.
• Actively managed: Utilizes a quantitative strategy to achieve stated objectives.
• Moderate liquidity: Average daily trading volume of around 20,000 shares.
• Expense ratio: 0.95%

Risks:

• Market Risk: The ETF's performance is directly linked to the performance of the S&P 500 Index and the overall market conditions.
• Tracking Error: Due to its actively managed nature, AZBA's performance may deviate from its benchmark index.
• Options Risk: The use of options strategies can expose the ETF to potential losses if the market moves differently than anticipated.

Who should consider investing?:

AZBA is suitable for investors seeking:

• Downside protection: Investors who want to mitigate potential losses in a declining market.
• Moderate exposure to the stock market: Investors who prefer moderate exposure to the potential upside of the market while limiting downside risk.
• Actively managed approach: Investors comfortable with an actively managed ETF that seeks to outperform its benchmark.

Fundamental Rating based on AI:

Based on an AI-driven analysis of financial health, market position, and future prospects, AZBA receives a fundamental rating of 7.

Justification:

The rating considers the ETF's robust parent company, experienced management team, unique strategy, and promising growth trajectory. However, the short track record and relatively higher expense ratio contribute to the slightly lower score.

Resources and Disclaimers:

This analysis utilizes data from the following sources:

• Allianz Investment Management website
• ETF.com
• Morningstar

Disclaimer: The information provided in this summary is for informational purposes only and should not be considered investment advice. Investors should conduct their own due diligence and consult with a financial advisor before making any investment decisions.