Allianz Investment Management LLC (AllianzIM), a subsidiary of Allianz Life Insurance Company of North America, has created a new exchange-traded fund (ETF) product line tailored for investors who want to manage their wealth against unexpected market and economic events. The 6 Month Floor5 series launched with the AllianzIM U.S. Equity 6 Month Floor5 Jan/Jul ETF (NYSE: FLJJ). This spring, it will be followed by the AllianzIM U.S. Equity 6 Month Floor5 Apr/Oct ETF (NYSE: FLAO), set to launch April 1, 2024.
The Floor5 series marks a significant expansion in AllianzIM’s ETF offerings and complements the firm’s comprehensive suite of risk mitigation tools, including the firm’s lineup of Buffered ETFs. AllianzIM created these ETFs for investors who want to shield their portfolios against abrupt market fluctuations, mitigate sequence of return risk, and build long-term wealth. The Allianz Life suite of Buffered ETFs recently exceeded $2 billion in assets under management.
AllianzIM drew on its extensive familiarity with derivatives and the use of options to create the signature risk mitigation traits of the Floor5 ETF series. The ETFs seek to provide a floor with a maximum loss of five percent of the SPDR® S&P 500® ETF Trust losses for the duration of the outcome period, with upside returns subject to a cap.
“The Floor5 ETF series embodies our commitment to providing adaptable and forward-thinking risk management solutions,” says Chris Chambs, CEO, Allianz Investment Management LLC. “Risk is an inevitable part of the investing journey, particularly in today’s uncertain macroeconomic environment. This expanded ETF portfolio helps meet a growing investor demand for robust tools designed to weather ever-changing market cycles.”
Charlie Champagne, vice president of AllianzIM ETF Strategy noted “We are excited to broaden the scope of our risk mitigation solutions. Two of the features the Floor5 series offers are a known level of downside protection to secure years of asset accumulation for retirees and risk averse investors plus it removes timing risk that is inherent with other solutions.”
AllianzIM’s Floor5 ETFs are offered with an expense ratio of 74 basis points, and portfolio management conducted in-house by AllianzIM. The initial Outcome Period for FLJJ will be Feb. 1, 2024 to June 30, 2024, with subsequent Outcome Periods from July 1, 2024 to Dec. 31, 2024 and Jan. 1, 2025 to June 30, 2025. The initial 6-month Outcome Period for FLAO will be April 1, 2024 to Sept. 30, 2024. Each Outcome Period reflects a new stated Cap commensurate with prevailing market conditions.
AllianzIM ETFs provide outcome oriented solutions with 27 ETFs and more than $2 billion in assets under management. The AllianzIM Floor5 ETF product line taps into AllianzIM’s core strengths, which include risk management experience and in-house hedging capabilities. As part of one of the largest asset management and diversified insurance companies in the world (Allianz SE), AllianzIM uses the same proprietary in-house hedging platform that is used among affiliates to help manage more than $149 billion (as of 12/31/23) in hedged assets for institutional and retail investors around the globe. Offering a new way to help investors mitigate risk and reduce volatility, these ETFs complement Allianz Life’s suite of annuity and life insurance products.
For more information on the AllianzIM 6 Month Floor5 ETF series, please visit www.AllianzIMetfs.com.
AllianzIM, a wholly owned subsidiary of Allianz Life Insurance Company of North America, is a registered investment adviser. AllianzIM provides hedging and other derivatives-based risk management solutions through its proprietary platform.
Recognized as one of the Ethisphere World’s Most Ethical Companies®, Allianz Life Insurance Company of North America has been steadfast in its commitments since 1896, concentrating on retirement income and protection goals through various annuity and life insurance products. As a part of Allianz SE, a global leader in the financial services industry, Allianz Life employs approximately 150,000 professionals across over 70 countries.
Investing involves risk, including possible loss of principal. For more information on investment objectives, risks, charges, and expenses, please visit www.allianzIMetfs.com or call 877.429.3837. Investors should read the prospectus carefully before investing. There is no guarantee the funds will achieve their investment objectives, and investors may lose their entire investment. Holding Fund Shares for the entire Outcome Period is necessary to achieve the target outcomes.
The Buffered Outcome and Floor ETFs investment strategies are different from more typical investment products, and the Funds may be unsuitable for some investors. It is important that investors understand the investment strategy before making an investment. For more information regarding whether an investment in the Funds is right for you, please see the prospectus including “Investor Considerations.”
The Funds seek to deliver returns that match, at the end of a specified six-month or one-year period (Outcome Period), the returns of the SPDR S&P 500 ETF Trust up to a predetermined Cap, while limiting downside losses by the amount of a specified Buffer or Floor, before fees and expenses.
The Fund will utilize FLEX Options issued and guaranteed for settlement by the Options Clearing Corporation (“OCC”). The Fund bears the risk that the OCC will be unable or unwilling to perform its obligations under the FLEX Options contracts. In the unlikely event that the OCC becomes insolvent or is otherwise unable to meet its settlement obligations, the Fund could suffer significant losses.
ETFs are distributed by Foreside Fund Services, LLC. Allianz Investment Management LLC and Allianz Life Insurance Company of North America are not affiliated with Foreside Fund Services, LLC.
