Before the pandemic, risk management “got lost in the shuffle,” said Allianz Investment Management’s head of ETF strategy Johan Grahn. Volatility was low, interest rates were low, and the Federal Reserve “was providing the put in the market.” But following the early days of the pandemic and high inflation, risk management is “back in vogue.”
“People need to spend more time thinking about preserving their wealth,” Grahn told NYSE’s Judy Shaw at Exchange 2023. He added that this is “a very timely topic” when the Fed is “looking to destroy the wealth” investors have created.
Earlier this year, Wall Street banks were predicting “some of the widest” returns Grahn had seen “in many, many years.”
“That tells you you’re going to have different types of volatility in the market,” he said. “Nobody really knows where we’re going to end.”
So, AllianzIM has products that can help investors navigate through this uncertainty. For example, AllianzIM has a series of U.S. large-cap 20% buffer ETFs. These funds give exposure to the S&P 500 while providing a downside buffer of 20% against market drops.
“So, if the market’s going up to a certain level, you can participate in that,” Grahn said. “If the market is down by 20% or less, you actually get to keep all your money.”