AllianzIM Pioneers Risk-Managed Investment, Launches Two Laddered Buffer ETFs

Allianz Investment Management launched two innovative funds for a streamlined approach to risk management. The AllianzIM 6 Month Buffer10 Allocation ETF SPBX and AllianzIM Buffer20 Allocation ETF SPBW provide a laddered strategy, helping investors navigate unpredictable markets without the timing pitfalls often associated with buffered ETFs.

The concept of laddering isn't new to traditional investment portfolios, but applying it to buffered ETFs is a fresh strategy. These funds allow investors to reap the benefits of capped upside returns while providing downside protection, making them ideal during volatility in the markets.

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Both SPBX and SPBW invest in portfolios of existing AllianzIM ETFs but take advantage of staggered outcome periods. SPBX consists of six AllianzIM U.S. Large Cap 6 Month Buffer10 ETFs, each offering a six-month outcome period with a 10% downside buffer. SPBW, on the other hand, comprises a dozen AllianzIM U.S. Large Cap Buffer20 ETFs, each operating on a one-year outcome period with a 20% downside buffer.

This laddered structure eliminates the need to track multiple funds and ensures a seamless transition from one outcome period to the next. The funds carry competitive net expense ratios of 0.79%.

Buffered ETFs have been gaining traction for their ability to limit losses. However, their success often depends on cap timing — a challenge these laddered portfolios aim to do away with.

The launch of SPBX and SPBW adds to AllianzIM's success in the buffered ETF space, where funds like the AllianzIM U.S. Large Cap Buffer20 Jan ETF JANW have already shown robust growth, with $200 million in net flows in a month alone, as of Jan. 6.

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