Allianz Debuts Next Buffered Outcome ETF | ETF Trends

On Wednesday, Allianz Investment Management bolstered its ETF lineup with the release of the AllianzIM U.S. Large Cap 6 Month Buffer10 May/Nov ETF (SIXZ).

SIXZ has a net expense ratio of 0.74% and is actively managed. The fund’s goal is to match the performance of the SPDR S&P 500 ETF Trust (SPY).

As one of the most traded ETFs on the market, SPY provides investors with access to the constituents of the S&P 500. SPY’s strategy and large-cap exposure make it one of the more popular ETFs for active traders.

Primarily, SIXZ invests in FLEX options that reference the large-cap companies within the underlying ETF. This strategy includes both buying and selling call and put options contracts.

In utilizing a defined outcome strategy, the fund’s current outcome runs from May 1st, 2024 to October 31st, 2024.  Following an outcome period’s conclusion, the fund aims to purchase new assets and begin the next six-month outcome period. The fund prospectus notes Allianz intends to make each outcome period last between November 1st-April 30th and May 1st-October 31st.

Buffered Protection

To help protect investors from potential downsides, the fund applies a buffer against the first 9.53% of potential losses that the underlying ETF may endure. However, this is paired with a 7.95% cap on potential returns for the remaining outcome period. The buffer cap may shift upon the creation of the next outcome period.

“Defined outcome ETFs have gained in popularity as advisors want to better manage client objectives in a volatile market environment. It’s great to see Allianz expand their lineup,” VettaFi Head of Research Todd Rosenbluth noted.

SIXZ marks the latest addition to Allianz’s growing suite of buffered outcome ETFs. One of its largest funds, the AllianzIM U.S. Large Cap Buffer20 Jan ETF (JANW), has over $400 million in assets under management.

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