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Opportunities amid uncertainties

When crisis comes, we start rethinking and reevaluating our nest eggs and future plans.

Although making decisions amid uncertainty and crisis is not easy, we oftentimes have do exactly that. What we learn from it might reshape our outlook and change our plans. The coronavirus pandemic has certainly proven to be a crisis that challenged and continues to challenge so many aspects of our lives – our health, relationships, communities, personal finances as well as the global economy.

Have the recent market developments made us more risk-averse when it comes to our money?

In their recently published Q4 Quarterly Market Perceptions Study, Allianz Life Insurance Company of North America (Allianz Life) explored the perceptions of Americans regarding market developments, their readiness to invest, and their retirement strategies. *

The findings show that 44 percent of Americans feel that the market has yet to reach its lowest levels and nearly three-quarters (72 percent) believe that the markets will continue to be very volatile in 2021.

"We’ve watched as the pandemic continues to wreak havoc on people’s financial and retirement strategies, whether that is from unexpected job loss or early withdrawal of retirement assets,” says Aimee Lynn Johnson, Vice President of Advanced Markets and Solutions, Allianz Life. “It’s clear that people remain nervous about market risks and how their finances will continue to be impacted, not only in 2021, but for many years ahead."

allianz life savings trends
Source: AllianzIM

Prudence ahead

As a result of recent developments, the analysis of the last quarter of 2020 indicates that fewer people feel ready to invest now (25 percent compared with 29 percent in the last quarter).

Many are rethinking their retirement and investment strategies as the importance of some market loss protection remains high: 43 percent are willing to give up some potential gains for a financial product that protects a portion of their retirement savings and 61 percent say that it is important for them to have some of their retirement savings linked with a financial product that protects against market loss.

Among those with higher investable assets ($200,000+), 79 percent say that it is important to have some retirement savings tied in a financial product that protects them from market loss and 65 percent are willing to give up some potential gains for a financial product protecting  parts of their savings.

Reputation is key

Throughout the pandemic, Americans strongly associated the risk/protection balancing with the strength and reputation of a company: 83 percent said that they evaluate a company's financial strength when making decisions about purchasing financial products and for 79 percent, a company's approach to managing investment risk is important in their decision-making when buying financial products

Many (81 percent) consider the reputation of a company managing a fund to be of great importance when making an investment decision. The reputation of a company is even more important to those with higher investable assets.

Rethinking risk mitigation 

Given the sentiment around risk management, many investors are seeking to achieve a balance between generating meaningful returns and managing downside exposure.

In the midst of a volatile 2020, Allianz Investment Management LLC (AllianzIM) debuted new strategies to serve these very investors with the launch of their new business line of Buffered Outcome Exchange-Traded Funds (ETFs). These fully-liquid Buffered Outcome ETFs provide investors with an opportunity to participate in the growth potential of an equity index up to a stated cap, while providing a buffer against downside losses.  AllianzIM currently offers two strategies on the S&P 500 Price Return index: a 10 percent buffer and 20 percent buffer, each with quarterly offerings and 12-month outcome periods (that is, total of 8 ETFs). 

Click here for more information about how these products work.  

If the pandemic has taught us anything, it’s that there is inherent uncertainty all around us and value in paving a way toward a more secure future. "2020 was a reminder for many on the importance of managing risk within an overall financial portfolio," said Johan Grahn, Vice President, AllianzIM in Minneapolis. "So as investors look for a smoother ride in 2021 and beyond, we stand ready to do what we do best: help secure their future." 
Allianz Life conducted an online survey, the 2020 Q4 Allianz Life Quarterly Market Perceptions Study in December 2020 with a nationally representative sample of 1,003 respondents age 18+.

Investment involves risk including possible loss of principal. There is no guarantee the funds will achieve their investment objectives and may not be suitable for all investors.

Investors may lose their entire investment, regardless of when they purchase shares, and even if they hold shares for an entire Outcome Period.  Full extent of Caps and Buffers only apply if held for stated Outcome Period and are not guaranteed.  The Cap may increase or decrease and may vary significantly.

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 visit www.allianzim.com and review the prospectus. Investors should read the prospectus carefully before investing.

Allianz Investment Management LLC (AllianzIM) is a registered investment adviser and a wholly-owned subsidiary of Allianz Life Insurance Company of North America.

Distributed by Foreside Fund Services, LLC.

The Allianz Group is one of the world's leading insurers and asset managers with more than 100 million* private and corporate customers in more than 70 countries. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around 790 billion euros on behalf of its insurance customers. Furthermore, our asset managers PIMCO and Allianz Global Investors manage 1.7 trillion euros of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we are amongst the leaders in the insurance industry in the Dow Jones Sustainability Index. In 2020, over 150,000 employees achieved total revenues of 140 billion euros and an operating profit of 10.8 billion euros for the group.

These assessments are, as always, subject to the disclaimer provided below.

*Including non-consolidated entities with Allianz customers.

Press contacts

Brett Weinberg
Allianz Life Insurance Company of North America

 

As with all content published on this site, these statements are subject to our cautionary note regarding forward-looking statements:

Further information

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