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AllianzIM October Series of Buffered Outcome ETFs Now Available on Halo Investing

Advisors seeking to diversify their investment portfolios can access a new approach to risk management with Buffered Outcome ETFs.


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With unprecedented levels of volatility in 2020, investors are showing a decreased appetite for risk, leading to lost opportunities for long-term investment returns.


How can financial advisors help clients stay invested in a choppy market, manage client emotions, and avoid costly panic selling? The answer - Buffered Outcome ETFs.

In the new decade, investors are facing an unprecedented market dynamic defined by persistent volatility, historically-low interest rates, and a global health crisis.

AllianzIM Buffered Outcome ETFs are designed to expand the risk management strategies available to investors as prevailing market dynamics and declining appetite for risk create new challenges.

In addition to being the lowest-cost Buffered Outcome ETF option, these ETFs seek to match the returns of the S&P 500 Price Return Index up to a cap. At the same time, they provide a downside buffer against the first 10% and 20% of S&P 500 Price Return Index losses for AZAO and AZBO, respectively over the 12-month outcome period.


October-Series


Pain Points Facing Advisors

Not only tasked with finding appropriate investment choices, advisors also play an important role in managing the emotions and expectations of clients.

As digital tools are becoming the norm, clients are demanding more personalized solutions and goal-based outcomes. The AllianzIM Buffered Outcome ETFs on Halo’s platform can help fill these needs.

Buffered-ETF-Decision


Typically investors do not come into your office and complain about upside volatility, nor do they thank you for providing them with that fantastic return last year.”

What they do care about is downside volatility and are concerned with how to navigate that,” said Greg Goin, Risk Management Consultant, Allianz Life Insurance Company of North America, in the recent webcast, Keep Calm and Buffer On: Seeking Stable Returns in Volatile Markets.

Looking ahead, Goin warned that the persistently low interest-rate environment presents a challenge to traditional 60/40, equity/fixed-income approaches, which is a problem for investors who are starved for yield. And in this environment, traditional bond exposure is not performing its primary function of being included in a portfolio, which is to add safety and diversification to equities.


THE BUFFERED OUTCOME ETF SOLUTION

As highlighted in Halo’s Guide to Buffered ETFs, here are three examples of how investors can use these strategies in portfolios.

  1. Help Reduce Volatility by De-Risking Equity Positions
  2. Diversify Traditional Allocations to Help Increase Return Potential
  3. Shift Cash Off the Sidelines to Increase Market Exposure


Portfolio-Use-Case


In the same recent Buffered Outcome ETF webcast hosted by Allianz and Halo, 60% of the advisors in attendance indicated they are Highly Likely or Likely to establish or increase allocations to Buffered Outcome ETFs in the next 12 months.

In the webcast Joanna Kanakis, Strategic Relationship Manager at Halo Investing, argues that incorporating a buffered strategy into an investment portfolio provides a smarter baseline, smarter decisions and smarter management for investors.

The strategy helps provide a rules-based structure to limit losses or improve downside protection. Jason Barsema, Halo’s President & Co-Founder, adds to this:

We’ve become more passive in our U.S. Large Cap equity exposure, and so what many advisors are doing is combining the buffered ETFs and other protective investment products with their long-only holdings.”

So let's say you have 15% of your portfolio allocated to U.S. Large Cap core, 10% to a full upside strategy - that means you’re also fully exposed to losses - and then what we’ve seen advisors do for the other 5% is layer in a Buffered Outcome ETF right on top.”

Advisors surveyed through the webcast are following the same trend. When asked ‘how would you consider using Buffered Outcome ETFs?’ the top answer at 46% was de-risk equity positions.

Unsurprisingly, 27% of advisors surveyed also see benefit of using Buffered Outcome ETFs for all of the following portfolio use cases: de-risk equities, diversify traditional allocation, and shift cash off the sidelines.

With the recent October series and Halo’s goal of solving the complicated investment selection process with technology tools, access and education of these protective investing options is top priority.


Smarter Portfolio Decisions

But with Buffered Outcome ETFs still being an emerging category, advisors surveyed identified two main challenges.

54% felt understanding the product was a hurdle, while 45% identified managing the product after investing as a challenge when being able to choose among multiple challenges.

To meet these needs, Halo built the first technology platform for Buffered Outcome ETFs. The platform includes real-time upside caps and downside buffers and portfolio tools for tracking outcome dates, remaining buffer and downside to cap levels.

On Halo, advisors can get customized notifications based on their specific holdings and purchase dates, while gaining access to much more information intra-period.

This is unique in the ETF technology landscape, and important when holding and managing this new type of ETF strategy.

Adding a protective allocation in portfolios is important in managing the lifecycle of client portfolios. Planning for different market scenarios and the optimal allocation for a better client experience is more important than just looking at a custodial statement,” adds Barsema.

To learn more about the October series and Halo’s platform, get your personalized demo today!



Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus with this and other information about the Fund, please call 877.429.3837 or download and review the prospectus. Read the prospectus carefully before investing.

1 Gross reflects the Cap and Buffer prior to taking into account the 0.74% expense ratio of the ETF while Net accounts for the expense ratio, but does not include brokerage commissions, trading fees, taxes and non-routine or extraordinary expenses. The Cap and Buffer experienced by investors may be different than the stated numbers. The funds’ website, at www.allianzim.com, provides important fund information as well as information relating to the potential outcomes of an investment in the Fund on a daily basis.

The Funds seek to deliver returns that match, at the end of a specified one-year period (outcome period) the returns of the S&P 500 Price Index up to a predetermined Cap, while limiting downside losses by the amount of a specified Buffer, before fees and expenses. There is no guarantee the funds will achieve their investment objectives. You may lose your entire investment, regardless of when you purchase shares, and even if you hold shares for an entire Outcome Period. The Fund may not be suitable for all investors.

The “S&P 500 Price Return Index” (“Index”) is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and Standard & Poor’s Financial Services LLC (“S&P”), and has been licensed for use by Allianz Investment Management LLC (“AllianzIM”). Standard & Poor’s®, S&P®, and S&P 500® are registered trademarks of S&P; Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by AllianzIM. AllianzIM U.S. Large Cap Buffer 10 Jul ETF and AllianzIM U.S. Large Cap Buffer 20 Jul ETF are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the Index.


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