AllianzIM launches buffered outcome ETFs

Allianz Investment Management LLC (AllianzIM), a wholly owned subsidiary of Allianz Life Insurance Company of North America (Allianz Life), has launched the AllianzIM US Large Cap Buffer10 Apr ETF (NYSE Arca: AZAA) and the AllianzIM U.S. Large Cap Buffer20 Apr ETF (NYSE Arca: AZBA).

AllianzIM Buffered Outcome ETFs are designed to expand the risk management solutions available to investors as prevailing market dynamics and declining appetite for risk create new challenges. These ETFs are built to deliver outcome-based solutions to investors by utilising buffers, caps and index-linked returns that may provide investors a greater degree of confidence.

AllianzIM Buffered Outcome ETFs will leverage AllianzIM’s core strengths, which include risk management experience and in-house hedging capabilities, managing over USD145 billion in hedged assets and serving as a bridge between insurance and capital markets. Offering a new way to help investors seek to mitigate risk and reduce volatility, these new ETFs will complement Allianz Life’s suite of annuity and life insurance products.

“Our ETF offerings seek to provide a clearer path of return expectations by providing a level of downside protection over a defined time period,” says Brian Muench, president of AllianzIM. “The ability to remain invested in broad based equities while reducing downside risk in an ETF vehicle is creating strong interest from financial professionals.”

Now offering lower-cost buffered outcome ETFs, the AllianzIM ETFs seek to match the returns of the S&P 500 Price Return Index up to a stated Cap, while providing downside protection (through the Buffer) against the first 10 per cent and 20 per cent of S&P 500 Price Return Index losses for AZAA and AZBA, respectively.

“Allianz Life and AllianzIM have a long track record of risk management experience that is core to our businesses,” says Muench. “AllianzIM is uniquely equipped to manage outcome-based ETFs and help investors address their risk management needs.”

AllianzIM’s Buffered Outcome ETFs are offered at an expense ratio of 74 basis points, with portfolio management conducted in-house by AllianzIM. The initial outcome period of the ETFs will be 1 June, 2020, to 31 March, 2021; thereafter, subsequent outcome periods are expected to be 12-months with each outcome period reflecting a new stated cap commensurate with prevailing market conditions, allowing investors to remain invested with downside protection.