AllianzIM U.S. Large Cap Buffer20 Oct ETF (AZBO)AZBO

US ETF AllianzIM U.S. Large Cap Buffer20 Oct ETF

Profile:

• Target Sector: U.S. Large Cap Equity
• Asset Allocation: 90% Large Cap U.S. Stocks, 10% Buffer
• Investment Strategy: Aims to provide downside protection and potential upside participation in the U.S. large-cap equity market. It combines long exposure to large-cap U.S. stocks with a buffer component designed to mitigate losses in a down market.

Objective:

• To provide investors with moderate downside protection and potential upside participation in the U.S. large-cap equity market.

Issuer:

• Allianz Global Investors
  • Reputation and Reliability: Allianz Global Investors is a renowned asset management firm with a strong global presence and a long history of managing large and diverse portfolios.
  • Management: The ETF is managed by an experienced team with expertise in quantitative investing and risk management.

Market Share:

• Holds a small market share within its sector.

Total Net Assets:

• The ETF has approximately $28.7 million in assets under management as of October 26, 2023.

Moat:

• Quantitative Investment Expertise: AllianzIM leverages its expertise in quantitative analysis to construct the buffer component of the ETF, aiming to provide investors with tailored downside protection.
• Unique Strategy: The combination of long exposure and a customized buffer offers a distinct approach to navigating market volatility.

Financial Performance:

• The ETF has a relatively short track record, having launched in October 2022.
• Since inception, it has outperformed its benchmark index (S&P 500 Total Return Index) on a risk-adjusted basis.

Benchmark Comparison:

• The ETF has a lower volatility than the S&P 500 Total Return Index, demonstrating its risk mitigation element.
• However, it has also delivered slightly lower returns compared to the benchmark during periods of market growth.

Growth Trajectory:

• The ETF is a relatively new entrant in the market, and its growth trajectory is difficult to predict with certainty.
• Its performance will depend on market conditions and the effectiveness of its buffer strategy.

Liquidity:

• Average Trading Volume: Moderate volume, averaging around 5,000 shares per day.
• Bid-Ask Spread: Tight spread, indicating relatively low trading costs.

Market Dynamics:

• Economic Indicators: The ETF's performance is influenced by macroeconomic factors such as interest rates, inflation, and economic growth.
• Sector Growth Prospects: The ETF's performance is tied to the performance of the U.S. large-cap equity market.
• Current Market Conditions: Market volatility and investor sentiment can impact the ETF's trading price.

Competitors:

• SPDR S&P 500 Buffer ETF (BJAN)
• Invesco S&P 500 Downside Buffer ETF (SPDN)
• Global X S&P 500 Covered Call ETF (XYLD)

Expense Ratio:

• The ETF's expense ratio is 0.90%.

Investment Approach and Strategy:

• Strategy: The ETF aims to track the AllianzIM U.S. Large Cap Buffer 20% October Index.
• Composition: The ETF primarily invests in U.S. large-cap stocks and includes a buffer component constructed using options contracts.

Key Points:

• Offers downside protection and potential upside participation in the U.S. large-cap equity market.
• Managed by a team with quantitative investment expertise.
• Lower volatility than the S&P 500 but may underperform during market rallies.
• Moderate liquidity and tight bid-ask spread.

Risks:

• Volatility: The ETF's value can fluctuate based on market conditions.
• Market Risk: The underlying assets of the ETF are subject to market risks, such as sector-specific or economic downturns.
• Options Risk: The buffer component relies on options contracts, which can be complex and introduce additional risks.

Who Should Consider Investing:

• Investors seeking moderate downside protection and potential upside participation in the U.S. large-cap equity market.
• Investors with a moderate risk tolerance.
• Investors seeking a strategic tool for managing portfolio volatility.

Fundamental Rating Based on AI:

7.5 out of 10

The AI-based rating considers the ETF's financial performance, market position, investment strategy, and risk profile. It acknowledges the ETF's unique strategy, experienced management, and downside protection features. However, the AI also identifies the relatively short track record, potential underperformance during bull markets, and associated options risk. Overall, the AI assessment suggests the ETF is a potentially valuable tool for specific investor profiles within a diversified portfolio.

Resources and Disclaimers:

• AllianzIM U.S. Large Cap Buffer20 Oct ETF Website: https://us.allianzgi.com/us/en/individual/etfs/allianzim-us-large-cap-buffer20-oct-etf-azpl.html
• ETF Database: https://etfdb.com/etf/AZPL/allianzim-us-large-cap-buffer20-oct-etf/
• Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. Investors should conduct their own due diligence and consult with a financial professional before making investment decisions.