AllianzIM U.S. Large Cap Buffer10 Feb ETF (FEBT)

The AllianzIM U.S. Large Cap Buffer10 Feb ETF (FEBT) is an Allianz-managed fund that tracks large-cap U.S. equities with a 10% cushion against losses and a cap on gains, resetting annually each February. It uses FLEX options to construct these protective and limiting boundaries around the S&P 500.

FEBT — Key facts


Issuer	AllianzIM (Allianz Investment Management)
Reference Index	SPDR S&P 500 ETF Trust (SPY)
Buffer Size	10% of first losses
Upside	Capped at predetermined level
Outcome Period	12 months, resets annually in February
Expense Ratio	0.74% annually
Inception	January 31, 2023
Exchange	Cboe BZX

The structure

FEBT is a passive-turned-active fund. Its starting point is the SPDR S&P 500 ETF Trust — a simple, well-known tracker of the index. From there, Allianz wraps it with options to create a 12-month outcome. Investors who buy and hold for the full 12 months get:

Downside protection: The first 10% of losses is absorbed by the fund. If the S&P 500 falls 5%, the fund falls almost nothing. If it falls 15%, the fund falls roughly 5%.
Upside limitation: Gains are capped. The cap is set at the beginning of each outcome period (based on expected volatility and interest rates) and remains fixed through the 12 months.

The outcome period always resets in February, so the fund operates on a rolling calendar. An investor who buys in May is buying into the tail of a February-to-next-February period — meaning only nine months of protection remain. By February, the terms reset and a new 12-month cycle begins.

How the buffer is built

Allianz uses flexible exchange-traded options (FLEX options) to construct the buffer and cap simultaneously. The fund purchases out-of-the-money put options, which provide the downside protection, and finances them by selling call options, which create the upside cap. This is the standard architecture across modern outcome ETFs. It works because it avoids custom, counterparty-dependent derivatives and instead uses exchange-traded instruments that are liquid and transparent.

The 10% buffer represents a middle ground. A 5% buffer would be cheaper to buy (allowing a higher cap) but offer little protection. A 20% buffer would offer stronger protection but cap upside more severely. AllianzIM chose 10% as the sweet spot for investors who want meaningful downside cushioning without overly sacrificing upside participation.

The cost and the limitation

The 0.74% annual expense ratio covers the cost of maintaining the options positions, the active management, and the administrative overhead. That is not cheap — the underlying S&P 500 tracker costs roughly 0.03% — but it is reasonable for a sophisticated options strategy. Investors pay that tab in exchange for the buffer and the cap.

A critical limitation: the buffer only works if shares are held through the entire 12-month outcome period. An investor who sells FEBT six months in and the market has declined 8% will have realised a loss close to 8%, despite the 10% buffer in the full period. The buffer is not a put option that the investor owns — it is a structural feature of the fund that only works over the stated term.

The tradeoff in context

FEBT is designed for a specific profile: an equity investor who values the S&P 500’s long-term returns but is uncomfortable with the short-term volatility. It appeals to people in or near retirement, to investors who have suffered through drawdowns and want psychological relief, and to those who simply find 10% losses more bearable than 30% declines.

It is less suited to aggressive growth investors, who resent any cap on upside and who accept volatility as the price of equity returns. It is also not a place to hide cash — it is still an equity fund with the full risk profile of the S&P 500, just with the first 10% of downside clipped.

How to research FEBT

The starting point is AllianzIM’s website, where the current cap is always displayed — this number changes as the outcome period approaches its reset date. Read the fund’s fact sheet to understand what cap is currently available and how much time remains in the current outcome period. The prospectus describes the options strategy in detail and the risks of buying mid-period. Because FEBT has been trading since early 2023, one year’s worth of complete outcome periods are already history — review those results to see whether the buffer and cap worked as advertised in real conditions.