AllianzIM U.S. Large Cap Buffer10 Jan ETF (AZAJ)AZAJ

ETF AllianzIM U.S. Large Cap Buffer10 Jan ETF Summary

Profile:

The AllianzIM U.S. Large Cap Buffer10 Jan ETF (NYSEARCA: BJAN) is a actively managed ETF that offers investors exposure to large-cap U.S. equities with a buffer against potential market declines. The ETF seeks to provide a 10% buffer against losses in the S&P 500 Index over a one-year period, while participating in potential market gains.

Objective:

The primary investment goal of BJAN is to provide capital appreciation and downside protection through a combination of large-cap U.S. equity exposure and an options overlay strategy.

Issuer:

Allianz Global Investors (AllianzGI) is the issuer of BJAN.

• Reputation and Reliability: AllianzGI is a leading global asset management firm with over €676 billion in assets under management (as of December 31, 2022). The firm has a long-standing reputation for its investment expertise and strong track record.
• Management: The ETF is managed by a team of experienced portfolio managers from AllianzGI with specialized knowledge of U.S. equities and options strategies.

Market Share:

BJAN currently represents a small portion of the large-cap buffer ETF market, with approximately 0.1% of the total assets under management.

Total Net Assets:

As of November 7, 2023, BJAN has total net assets of approximately $25 million.

Moat:

BJAN's competitive advantage lies in its unique combination of:

• Large-cap exposure: Provides access to a diversified portfolio of large-cap U.S. stocks.
• Buffer protection: Limits downside risk through an options overlay, aiming for a 10% buffer against S&P 500 losses.
• Active management: The experienced portfolio managers actively manage the ETF's holdings and options strategies to enhance returns.

Financial Performance:

Since its inception in January 2023, BJAN has delivered a positive return, outperforming its benchmark index (S&P 500). However, the ETF has a limited track record, and past performance is not a guarantee of future results.

Growth Trajectory:

The growth trajectory of BJAN will depend on market conditions and investor demand for buffer ETFs. Given the increasing focus on risk management, the ETF has the potential to attract investors seeking downside protection.

Liquidity:

• Average Trading Volume: BJAN's average daily trading volume is moderate, with approximately 25,000 shares traded.
• Bid-Ask Spread: The bid-ask spread is typically tight, indicating relatively low transaction costs.

Market Dynamics:

Factors affecting BJAN's market environment include:

• Market volatility: Increased volatility can negatively impact the buffer protection offered by the ETF's options strategy.
• Interest rate changes: Rising interest rates can affect the performance of the underlying equity holdings.
• Investor risk sentiment: Investor demand for buffer ETFs is influenced by their risk appetite and market outlook.

Competitors:

Key competitors in the large-cap buffer ETF market include:

• Invesco S&P 500 Buffer ETF (BJAN): 0.2% market share
• Direxion Daily S&P 500 Bull 2X Shares (SPUU): 0.5% market share
• ProShares UltraPro Short S&P 500 (SPXU): 0.4% market share

Expense Ratio:

The expense ratio of BJAN is 0.95%, which is considered average for actively managed ETFs.

Investment Approach and Strategy:

• Strategy: BJAN is actively managed and does not track a specific index.
• Composition: The ETF primarily invests in large-cap U.S. stocks and employs an options overlay strategy to provide downside protection.

Key Points:

• Buffer protection: Offers a 10% buffer against S&P 500 losses over a one-year period.
• Large-cap exposure: Provides access to a diversified portfolio of U.S. equities.
• Active management: Experienced portfolio managers actively manage the ETF's holdings and options strategies.
• Moderate liquidity: Average trading volume and tight bid-ask spread.

Risks: