In a market characterized by lofty stock valuations and record low rates, traditional stock/bond portfolios aren’t enough anymore to protect investors from increased risks. Buffered outcome ETFs can help investors stay invested while positioning portfolios for any risk environment.
In the upcoming webcast, Buffered Outcome ETFs: Participate in Markets, Prepare for 2022 Risk, Brendan Cavanaugh, ETF Product Specialist, Allianz Investment Management LLC; and Charlie Ripley, VP of Portfolio Management, Allianz Investment Management U.S. LLC, will breakdown the components of Buffered Outcome ETF strategies and why now may be the right time to consider implementing them, as we transition to year-end and look to 2022.
Allianz has come out with a suite of buffered outcome ETFs designed to expand the risk management solutions available to investors. The lowest-cost buffered outcome ETFs on the market seek to match the returns of the S&P 500 Price Return Index up to a stated cap while providing a level of risk mitigation through a buffer against the first 10% and 20% of S&P 500 Price Return Index losses. The suite includes:
- AllianzIM U.S. Large Cap Buffer10 Jan ETF (AZAJ)
- AllianzIM U.S. Large Cap Buffer20 Jan ETF (AZBJ)
- AllianzIM U.S. Large Cap Buffer10 Apr ETF (AZAA)
- AllianzIM U.S. Large Cap Buffer20 Apr ETF (AZBA)
- AllianzIM U.S. Large Cap Buffer10 Jul ETF (AZAL)
- AllianzIM U.S. Large Cap Buffer20 Jul ETF (AZBL)
- AllianzIM U.S. Large Cap Buffer10 Oct ETF (AZAO)
- AllianzIM U.S. Large Cap Buffer20 Oct ETF (AZBO)
The ETFs follow a 12-month outcome period. Each outcome period reflects a new stated cap commensurate with prevailing market conditions, allowing investors to remain invested with a level of risk mitigation.
Allianz Investment Management LLC more recently launched a new buffered outcome ETF with a six-month outcome period: the AllianzIM U.S. Large Cap 6 Month Buffer10 Apr/Oct ETF (NYSE: SIXO). AllianzIM’s new ETF seeks to match the returns of the S&P 500 Price Return Index up to a stated cap while providing downside risk mitigation through a buffer against the first 10% of S&P 500 Price Return Index losses for SIXO over a six-month outcome period.
While there may be benefits to investing in the ETFs from the onset, investors can purchase the funds at any time within the stated outcome period. Each outcome period reflects a new stated cap, allowing investors to remain invested with a level of risk mitigation.
The AllianzIM buffered outcome ETFs leverage AllianzIM’s core strengths, including risk management experience and in-house hedging capabilities. As part of one of the largest asset management and diversified insurance companies globally, AllianzIM is powered by the same proprietary in-house hedging platform that is used among affiliates to help manage more than $145 billion in hedged assets for institutional retail investors around the globe. Offering a new way to help investors seek to mitigate risk and reduce volatility, these new ETFs complement Allianz Life’s suite of annuity and life insurance products.
Financial advisors who are interested in learning more about the Buffered Outcome ETF strategies can register for the Friday, December 10 webcast here.