AIM ETF Products Trust - AllianzIM U.S. Large Cap Buffer20 Feb ETF (FEBW)

Overview

The AllianzIM U.S. Large Cap Buffer20 Feb ETF (FEBL) seeks to provide investors with buffered exposure to the S&P 500, protecting against the first 20% of losses over a one-year period, while limiting upside participation. It focuses on the large-cap segment of the U.S. equity market. The fund uses a defined outcome strategy, utilizing options to achieve its buffer and cap.

Reputation and Reliability

Allianz Investment Management LLC (AllianzIM) is the issuer. Allianz is a well-established global financial services company with a strong reputation.

Management Expertise

AllianzIM has experience managing various investment strategies, including those involving derivatives like options, crucial for the defined outcome strategy of FEBL.

Goal

The investment goal of FEBL is to provide investors with returns that match the price return of the S&P 500 Index up to a predetermined cap, while buffering investors against the first 20% of losses over a specified outcome period (approximately one year).

Investment Approach and Strategy

Strategy: FEBL employs a defined outcome strategy using FLexible EXchange Options ('FLEX Options') on the S&P 500 Index to provide a buffer against potential losses. The fund does not directly track an index but aims to provide index-linked returns with downside protection and upside limitation.

Composition The ETF primarily holds FLEX Options contracts on the S&P 500 index and cash/cash equivalents.

Market Share: The market share of FEBL within the defined outcome ETF category is growing but is not a market leader, with several competitors in the space.

Total Net Assets (AUM): 95000000

Key Competitors

• Innovator U.S. Equity Buffer ETF (BJUL)
• FT Cboe Vest U.S. Equity Buffer ETF - July (JULY)
• AGFIQ Hedged Dividend Income Fund (DIVA)

Competitive Landscape

The defined outcome ETF market is becoming increasingly crowded. FEBL competes with numerous other buffer ETFs offering similar protection levels and outcome periods. Advantages may include AllianzIM's established reputation and specific option strategies. Disadvantages could include potentially lower liquidity compared to larger competitors and variations in cap rates that can impact investor returns.

Historical Performance: The fund's performance will vary based on the S&P 500's performance and the defined cap and buffer in place. Performance is limited by the cap rate.

Benchmark Comparison: FEBL's performance will deviate from the S&P 500 due to the defined outcome strategy. It will underperform in periods of strong S&P 500 gains and outperform if the S&P 500 declines within the buffered range.

Expense Ratio: 0.74

Average Trading Volume

The average trading volume for FEBL is moderate, which could lead to slightly wider bid-ask spreads compared to more liquid ETFs.

Bid-Ask Spread

The bid-ask spread for FEBL is typically wider than that of highly liquid, broad-market ETFs but acceptable.

Market Environment Factors

FEBL's performance is influenced by overall market sentiment, interest rate movements (which affect options pricing), and volatility in the S&P 500. The ETF is designed to offer protection during market downturns, making it appealing in uncertain environments.

Growth Trajectory

The growth trajectory of FEBL depends on investor demand for defined outcome strategies, particularly during periods of market volatility. Changes to strategy and holdings are periodically made based on the option strategy used.

Competitive Edge

FEBL's competitive advantages stem from AllianzIM's experience in managing options-based strategies and the defined outcome approach, which appeals to investors seeking downside protection. The fund offers a transparent and relatively straightforward way to gain exposure to the S&P 500 with a predefined buffer. The defined outcome approach can be attractive to risk-averse investors who want to limit potential losses. The structured nature of the options strategy provides a predictable risk/reward profile over the outcome period. It's important to note that the cap rate can limit upside participation.

Volatility

FEBL's volatility should be lower than the S&P 500's volatility during periods of market decline due to the buffer. However, it will also likely have lower upside participation.

Market Risk

The primary market risk is that the cap rate may limit potential gains in strongly rising markets. There is also the risk that the buffer will not fully protect against losses exceeding 20%.

Ideal Investor Profile

The ideal investor for FEBL is a risk-averse individual or institution seeking to participate in the S&P 500's returns while limiting potential losses over a defined period.

Market Risk

FEBL is best suited for long-term investors who are concerned about market volatility and are willing to forgo some upside potential in exchange for downside protection.

The AllianzIM U.S. Large Cap Buffer20 Feb ETF (FEBL) offers a defined outcome strategy that seeks to provide downside protection against the first 20% of losses in the S&P 500 over a one-year period, while capping upside potential. It utilizes FLEX Options to achieve this buffer. While providing some protection, its capped upside and expense ratio should be considered carefully against other ETFs. It is designed for risk-averse investors seeking buffered exposure to the U.S. large-cap market.

Data Sources:

• AllianzIM Website
• ETF.com
• FactSet

Disclaimers:

The data and analysis provided are for informational purposes only and do not constitute investment advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions. Market share data is estimated and may not be precise. Performance data can change.