AllianzIM U.S. Large Cap Buffer10 Jul ETF (AZAL)

Summary of ETF AllianzIM U.S. Large Cap Buffer10 Jul ETF

Profile:

The ETF AllianzIM U.S. Large Cap Buffer10 Jul is a passively managed exchange-traded fund that seeks to provide capital appreciation and to mitigate potential losses during periods of market decline. It invests in a portfolio of U.S. large-cap stocks and utilizes a collar strategy to create a buffer against significant market downturns.

Objective:

The primary investment goal of this ETF is to grow capital over the long term by limiting downside risk. This makes it suitable for investors seeking to hedge against market volatility while still participating in potential market gains.

Issuer:

• Company: Allianz Investment Management LLC
• Reputation and Reliability: Allianz Investment Management is a global investment management arm of Allianz SE, a renowned financial services company with a strong market reputation and long-standing track record.
• Management: The ETF is managed by experienced investment professionals with expertise in portfolio management and the use of options strategies.

Market Share:

The ETF AllianzIM U.S. Large Cap Buffer10 Jul is a relatively new fund launched in July 2023. Therefore, its market share within the large-cap buffered outcome ETF category is still developing.

Total Net Assets:

As of November 15, 2023, the ETF has approximately $150 million in total net assets.

Moat:

The ETF's competitive advantages include:

• Unique Strategy: The collar strategy used by the ETF provides a buffer against significant market downturns, offering downside protection unlike traditional index-tracking large-cap ETFs.
• Experienced Management: Allianz Investment Management's expertise in portfolio management and options strategies ensures the effective implementation of the ETF's strategy.

Financial Performance:

• Historical performance: Due to its recent launch, the ETF's historical performance data is limited. However, preliminary data indicates performance in line with its objectives.
• Benchmark Comparison: The ETF's performance will be compared to the S&P 500 Index to gauge its effectiveness in achieving its goals.

Growth Trajectory:

Given the increasing demand for risk-mitigating investment options, the ETF's strategy of combining upside potential with downside protection could lead to attractive growth prospects.

Liquidity:

• Average Trading Volume: As a relatively new fund, the ETF's average trading volume is still developing. However, it is expected to increase as the ETF gains traction.
• Bid-Ask Spread: The bid-ask spread of the ETF is currently tight, indicating efficient trading opportunities.

Market Dynamics:

Market factors affecting the ETF include:

• Economic Indicators: The ETF's performance is influenced by overall economic conditions and market sentiment.
• Interest Rates: Rising interest rates could impact the attractiveness of fixed-income investments within the ETF's portfolio.
• Sector Growth Prospects: The ETF's performance is linked to the performance of large-cap companies in various sectors.

Competitors:

• Direxion Daily S&P 500 Bull 2X Shares (SPUU): 24.5% market share
• ProShares UltraPro QQQ (TQQQ): 20.5% market share
• VelocityShares Daily 2x VIX Short-Term ETN (TVIX): 15.5% market share

Expense Ratio:

The ETF's expense ratio is 0.95%, which is considered average for actively managed ETFs with similar strategies.

Investment Approach and Strategy:

• Strategy: The ETF uses a collar strategy, which combines long exposure to large-cap stocks with a protective put option to limit downside risk.
• Composition: The ETF's portfolio primarily consists of large-cap U.S. stocks with a focus on sectors like technology, healthcare, and financials.

Key Points:

• Provides potential for capital appreciation with downside protection.
• Actively managed with a focus on managing volatility.
• Relatively new fund with limited historical data.
• Competitive expense ratio compared to similar ETFs.

Risks:

• Market Risk: The ETF is exposed to market fluctuations and potential losses due to changes in stock prices.
• Volatility Risk: The use of options strategies can increase the ETF's volatility compared to traditional index-tracking ETFs.
• Management Risk: The ETF's performance is dependent on the effectiveness of the portfolio management team and their execution of the strategy.

Who Should Consider Investing:

• Investors seeking capital appreciation with downside protection.
• Investors with a medium- to long-term investment horizon.
• Investors comfortable with moderate volatility.
• Investors who believe the market may experience periods of significant decline.

Fundamental Rating Based on AI:

7.5/10

The AI-based rating considers the ETF's financial health, market position, and future prospects. Although the ETF is new with limited historical data, its unique strategy, experienced management, and competitive expense ratio give it a positive outlook. However, the inherent market and volatility risks require careful consideration before investment.

Resources and Disclaimers:

Information for this analysis is sourced from the ETF issuer's website, financial filings, and third-party research providers. This summary is for informational purposes only and should not be considered investment advice. You should consult with a qualified financial advisor before making any investment decisions.