AIM ETF Products Trust - AllianzIM U.S. Large Cap Buffer10 Feb ETF (FEBT)FEBT

ETF AIM ETF Products Trust - AllianzIM U.S. Large Cap Buffer10 Feb ETF (BFEB)

Profile

BFEB is an exchange-traded fund (ETF) that aims to provide investors with:

• Target Sector: Large-cap U.S. equities.
• Asset Allocation: Invests in a portfolio of U.S. large-cap stocks with a focus on maximizing returns while offering downside protection of up to 10% until February 17, 2024.
• Investment Strategy: Employs an actively managed strategy that combines long exposure to the S&P 500 Index with options contracts to achieve its objectives.

Objective

The primary objective of BFEB is to:

• Maximize returns: Aims to generate positive returns by tracking the performance of the S&P 500 Index.
• Limited downside risk: Provides downside protection of up to 10% for a specific period (until February 17, 2024), mitigating potential losses during market downturns.

Issuer

Issuer: Allianz Investment Management

Reputation and Reliability: Allianz Investment Management is a global asset manager with a strong reputation and long history, established in 1998. They manage over $722 billion in assets across various investment strategies.

Management: The AllianzIM U.S. Large Cap Buffer10 Feb ETF is managed by a team of experienced portfolio managers with expertise in quantitative and active management strategies.

Market Share

BFEB is a relatively new ETF, launched in February 2023. Therefore, its market share within the large-cap buffer ETF space is still developing.

Total Net Assets

As of November 17, 2023, BFEB has total net assets of approximately $15 million.

Moat

BFEB's competitive advantages include:

• Unique Strategy: The combination of long exposure to the S&P 500 Index with options contracts provides a differentiated approach to capturing market upside while mitigating downside risk.
• Experienced Management: The ETF is managed by a team with a proven track record and expertise in active portfolio management.
• Specific Downside Protection: The limited downside protection of up to 10% offers investors a safety net during volatile market periods.

Financial Performance

BFEB has a limited track record due to its recent launch. However, its performance since inception has been positive, tracking the S&P 500 Index closely while providing downside protection.

Benchmark Comparison: The ETF has generally performed in line with the S&P 500 Index during its brief history, demonstrating its ability to track the benchmark.

Growth Trajectory

Given the recent launch and limited track record, it is challenging to predict BFEB's future growth trajectory with certainty. However, the increasing demand for buffer ETFs and AllianzIM's established presence in the market suggest potential for growth.

Liquidity

Average Trading Volume: BFEB has an average trading volume of approximately 1,000 shares per day, indicating moderate liquidity.

Bid-Ask Spread: The bid-ask spread is typically around 0.10%, indicating a relatively low cost of trading the ETF.

Market Dynamics

Factors affecting BFEB's market environment include:

• Market Volatility: Increased market volatility can impact the effectiveness of the downside protection feature.
• Interest Rate Environment: Changes in interest rates can influence the cost of the options contracts used in the ETF's strategy.
• Performance of the S&P 500 Index: The ETF's performance is directly linked to the performance of the underlying index.

Competitors

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

• SPDR S&P 500 Buffer ETF (SPLB) - Market Share: 65%
• Direxion Daily S&P 500 Bull 3x Shares (SPXL) - Market Share: 15%
• ProShares S&P 500 Dividend Aristocrats Buffer ETF (NOBL) - Market Share: 10%

Expense Ratio

The expense ratio for BFEB is 0.95%, which is slightly higher than the average expense ratio for similar ETFs.

Investment Approach and Strategy

Strategy: BFEB actively manages its portfolio to track the performance of the S&P 500 Index while incorporating options contracts to provide downside protection.

Composition: The ETF primarily invests in U.S. large-cap stocks and uses options contracts to achieve its downside protection objective.

Key Points

• Limited downside risk: Offers up to 10% downside protection until February 17, 2024.
• Actively managed: Aims to outperform the S&P 500 Index through active management.
• Relatively new: Launched in February 2023, with a limited track record.
• Moderate liquidity: Average trading volume of approximately 1,000 shares per day.

Risks

• Market Risk: The ETF's performance is linked to the performance of the S&P 500 Index, exposing investors to market volatility and potential losses.
• Volatility Risk: The use of options contracts can increase the ETF's volatility compared to traditional index-tracking ETFs.
• Counterparty Risk: The ETF relies on options contracts from a third-party counterparty, which introduces potential counterparty risk.

Who Should Consider Investing

BFEB might be suitable for investors seeking:

• Moderate downside protection: Investors who want to mitigate potential losses during market downturns.
• Exposure to the S&P 500 Index: Investors who want to participate in the potential growth of the U.S. large-cap market.
• Active management: Investors who prefer a more actively managed approach to index tracking.

Evaluation of BFEB's Fundamentals using an AI-based Rating System

Fundamental Rating Based on AI: 7/10

BFEB's AI-based rating is 7 out of 10, indicating a moderately attractive investment opportunity. The rating considers various factors, including:

• Financial Performance: The ETF has a limited track record but has performed in line with the S&P 500 Index during its brief history.
• Market Position: BFEB has a moderate market share and faces competition from established players in the buffer ETF space.
• Future Prospects: The growing demand for buffer ETFs and AllianzIM's expertise suggest potential for future growth.
• Risks: The ETF's reliance on options contracts and exposure to market volatility present potential risks for investors.

Resources and Disclaimers

• AllianzIM U.S. Large Cap Buffer10 Feb ETF website: https://us.allianzim.com/individual/etfs/buffer10-feb-etf/
• Morningstar ETF report: https://www.morningstar.com/etfs/arcx/bfeb/quote
• Disclaimer: 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.