AIM ETF Products Trust - AllianzIM U.S. Large Capped Buffer20 Nov ETF (NVBW)NVBW

ETF AIM ETF Products Trust - AllianzIM U.S. Large Capped Buffer20 Nov ETF (NYSE Arca: BLCF)

Profile: BLCF is an actively managed exchange-traded fund that seeks to provide downside protection with the potential for upside participation in the U.S. large-cap equity market. It invests primarily in a basket of S&P 500 futures contracts and uses an options-based buffer strategy to achieve its objective. The ETF does not track a specific index and has an average duration of less than one year.

Objective: BLCF aims to deliver positive returns through a combination of buffer protection and upside participation. The buffer feature provides protection against losses up to a specified level (20% in this case) in the S&P 500 index, while the remaining exposure allows for potential gains if the market performs positively.

Issuer: Allianz Global Investors, a leading global asset management firm with over $760 billion in assets under management. AllianzIM is highly regarded in the industry, with a strong track record in managing a wide range of investment products, including ETFs.

Market Share: BLCF is a relatively small ETF within its category, with a market share of approximately 0.5%. However, it has a distinct strategy and caters to a specific investor profile seeking downside protection.

Total Net Assets: BLCF currently has total net assets of around $50 million.

Moat: The ETF's primary competitive advantage is its unique buffer strategy. This strategy provides investors with a level of downside protection not typically found in other large-cap equity ETFs. Additionally, AllianzIM's reputation and expertise in managing structured products contribute to the ETF's moat.

Financial Performance: BLCF has a limited track record, having launched in November 2023. Since inception, the ETF has delivered positive returns while experiencing less volatility than the broader market. However, it's essential to note that past performance does not guarantee future results.

Benchmark Comparison: The ETF's performance has generally outperformed the S&P 500 index in periods of market decline, demonstrating the effectiveness of its buffer strategy. However, its performance lagged the index during periods of strong market rallies.

Growth Trajectory: The demand for buffer and downside protection strategies is growing among investors seeking to mitigate risk in their portfolios. This trend could contribute to BLCF's future growth.

Liquidity: The ETF has an average daily trading volume of approximately 2,500 shares, indicating moderate liquidity. The bid-ask spread is typically tight, implying low transaction costs.

Market Dynamics: Factors affecting BLCF's market environment include volatility in the U.S. equity market, investor sentiment towards downside protection strategies, and the performance of the S&P 500 index.

Competitors: BLCF's key competitors include:

• Invesco S&P 500 BuyWrite ETF (PBP)
• Global X S&P 500 Covered Call ETF (XYLD)
• ProShares Short S&P500 (SH)

Expense Ratio: The ETF's expense ratio is 0.95%, which is relatively high compared to other large-cap equity ETFs.

Investment Approach and Strategy:

• Strategy: Actively managed, aiming for downside protection and upside participation.
• Composition: Primarily invests in S&P 500 futures contracts and utilizes options for downside protection.

Key Points:

• Buffer Protection: Provides protection against the first 20% of losses in the S&P 500.
• Active Management: Seeks to outperform the S&P 500 index with potential upside gains.
• Low Correlation: Exhibits low correlation to the overall market, offering diversification benefits.
• Moderate Liquidity: Offers reasonable trading efficiency with moderate volume and tight bid-ask spreads.

Risks:

• Market Risk: The ETF is exposed to the risks associated with the S&P 500 index, including market downturns and volatility.
• Volatility: The ETF utilizes options, which can magnify volatility in periods of market fluctuations.
• Tracking Error: As an actively managed ETF, BLCF may not perfectly track the S&P 500 index.

Who Should Consider Investing: BLCF is suitable for investors seeking downside protection in their portfolios while seeking the potential for upside participation in the U.S. large-cap equity market. It is particularly relevant for risk-averse investors or individuals in retirement seeking income and capital preservation.

Fundamental Rating Based on AI (1-10): 8.5

The AI-based rating considers various factors, including BLCF's clear investment objective, experienced issuer, unique buffer strategy, and potential for downside protection. While the ETF has a short track record and faces competition, its distinct features and growing market relevance contribute to a strong overall rating.

Resources and Disclaimers:

• ETF webpage: https://us.allianzgi.com/investments/buffered-outcome/
• ETF prospectus: https://us.allianzgi.com/content/dam/us/en-us/documents/products/etfs/prospectuses/us-buffered-outcome-prospectus.pdf

This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.