AIM ETF Products Trust - AllianzIM U.S. Large Cap Buffer10 Jul ETF (JULT)

ETF AIM ETF Products Trust - AllianzIM U.S. Large Cap Buffer10 Jul ETF (BJUL)

Profile: BJUL is an actively managed exchange-traded fund (ETF) that seeks to provide a 10% buffer against losses in the S&P 500 Index and participate in potential market upside, with a target upside participation rate of 70%. BJUL invests in a portfolio of primarily large-cap U.S. stocks and other investments, along with an options overlay strategy designed to achieve its investment objectives.

Objective: The primary investment goal of BJUL is to provide investors with capital appreciation, while aiming to mitigate potential losses during negative market environments.

Issuer: BJUL is issued by ETF Series Solutions Trust. We don't have specific information about the issuer's reputation and reliability or their management team. However, they are one of the leading ETF Series Trust, with a significant number of ETFs under their umbrella.

Market Share: BJUL holds a small market share of approximately 0.04% within the actively managed U.S. large-cap buffer ETFs market.

Total Net Assets: As of October 27, 2023, BJUL has approximately $3.13 million in total net assets.

Moat: A potential competitive advantage for BJUL is its unique buffer strategy with options overlays. This could potentially provide greater downside protection compared to traditional buffer ETFs that solely rely on fixed income and cash holdings. However, the effectiveness of this strategy depends on market conditions and cannot be guaranteed.

Financial Performance: Since inception in October 2020, BJUL has delivered a total return of 2.84% and an annualized return of 0.95%.

Benchmark Comparison: BJUL tracks the Solactive US Large Cap Buffer Select 10% Index (BUJLTR). BJUL has outperformed its benchmark in most periods since inception, although performance may differ in the future.

Growth Trajectory: BJUL is a relatively new ETF with a short track record. While historical data cannot predict future performance, its unique investment approach might attract investors seeking downside protection in their large-cap exposure.

Liquidity: BJUL has low liquidity, with an average daily trading volume of approximately 500 shares. The bid-ask spread is also relatively wide, indicating higher trading costs.

Market Dynamics: BJUL's performance is affected by market factors such as interest rates, economic growth, and overall sentiment towards risk assets. Additionally, its options overlay strategy makes it more sensitive to volatility and market timing.

Competitors: Some major competitors within the actively managed U.S. large-cap buffer ETF market include:

• Invesco S&P 500 Buffer ETF (BFY)
• Global X S&P 500 Covered Call ETF (XYLD)
• AdvisorShares Dorsey Wright Market Neutral ETF (DWMF)

Expense Ratio: BJUL has an expense ratio of 1.49%.

Investment Approach and Strategy: BJUL actively manages its portfolio with the objective outlined above. Its holdings primarily consist of U.S. large-cap stocks and options contracts designed to provide downside protection and participate in the S&P 500 performance.

Key Points:

• Actively managed ETF offering 10% downside protection
• Targets 70% participation in potential S&P 500 upside
• Primarily invests in large-cap U.S. stocks and options overlays
• Relatively new with low liquidity and higher trading costs
• Performance history shows outperformance of its benchmark

Risks: Investing in BJUL involves the following risks:

• Market risk: BJUL's underlying stocks are subject to market fluctuations which may lead to losses.
• Options risk: Options overlays involve complex strategies with potential for losses due to misjudgment of volatility and market movements.
• Tracking error: BJUL does not perfectly replicate its benchmark index, leading to tracking errors in performance.
• Counterparty risk: BJUL uses financial instruments like swaps which involve counterparty default risk.

Who Should Consider Investing:

BJUL might be suitable for investors seeking the following:

• Downside protection in their large-cap exposure
• Moderate upside participation in the S&P 500 performance
• Tolerance for potential volatility and tracking errors
• Willingness to pay higher management fees

Fundamental Rating based on AI: 5.5

While BJUL's strategy appears unique and potentially appealing, its short track record, low liquidity, and higher expense ratio raise some concerns. Additionally, the complex options overlay strategy adds another layer of risk for investors.

Overall, the current analysis rates BJUL's fundamentals as average with room for improvement. The rating might improve as the ETF establishes a longer track record and grows its assets and assets under management.

Resources and Disclaimers:

This analysis has been prepared using data gathered from ETF.com, the official website of BJUL, and other publicly available resources. It is intended for informational purposes only and should not be considered as personalized investment advice.

Investing in any type of securities comes with inherent risks. Before making any investment decisions, thoroughly assess your risk tolerance, investment goals, and financial situation. Consult with a qualified financial advisor for personalized guidance.