UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington
, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21624
Allianz Variable Insurance Products Fund of Funds Trust
(Exact name of registrant as specified in charter)
5701 Golden Hills Drive, Minneapolis, MN 55416-1297
(Address of principal executive offices) (Zip code)
Citi Fund Services Ohio, Inc., 4400 Easton Commons, Suite 200, Columbus, OH 43219-8000
(Name and address of agent for service)
Registrant’s telephone number, including area code: 800-624-0197
Date of fiscal year end: December 31
Date of reporting period: December 31, 2023
Item 1. Reports to Stockholders.
AZL®
Balanced
Index
Strategy
Fund
Annual
Report
December
31,
2023
Table
of
Contents
AZL®
Balanced
Index
Strategy
Fund
Management
Discussion
and
Analysis
Page
1
Expense
Examples
and
Portfolio
Composition
Page
3
Schedule
of
Portfolio
Investments
Page
4
Statement
of
Assets
and
Liabilities
Page
5
Statement
of
Operations
Page
5
Statements
of
Changes
in
Net
Assets
Page
6
Financial
Highlights
Page
7
Notes
to
the
Financial
Statements
Page
8
Report
of
Independent
Registered
Public
Accounting
Firm
Page
13
Other
Federal
Income
Tax
Information
Page
14
Other
Information
Page
15
Approval
of
Investment
Advisory
Agreement
Page
16
Information
about
the
Board
of
Trustees
and
Officers
Page
19
This
report
is
submitted
for
the
general
information
of
the
shareholder
of
the
Fund.
The
report
is
not
authorized
for
distribution
to
prospective
investors
in
the
Fund
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
contains
details
concerning
the
sales
charges
and
other
pertinent
information.
1
AZL®
Balanced
Index
Strategy
Fund
Review
(Unaudited)
Allianz
Investment
Management
LLC
serves
as
the
Manager
for
the
AZL
®
Balanced
Index
Strategy
Fund.
What
factors
affected
the
Fund’s
performance
during
the
year
ended
December
31,
2023?*
For
the
year
ended
December
31,
2023,
the
AZL
Balanced
Index
Strategy
Fund
(the
“Fund”)
returned
13.21%.
That
compared
to
26.29%,
5.53%
and
15.62%
total
return
for
its
benchmarks,
the
S&P
500
Index,
the
Bloomberg
U.S.
Aggregate
Bond
Index,
and
the
Balanced
Composite
Index,
respectively.
1
The
AZL
Balanced
Index
Strategy
Fund
is
a
fund
of
funds
that
pursues
broad
diversification
across
four
underlying
equity
sub-
portfolios
and
one
fixed
income
sub-portfolio.
The
four
equity
sub-portfolios
pursue
passive
strategies
that
aim
to
achieve,
before
fees,
returns
similar
to
the
S&P
500
Index,
the
S&P
MidCap
400
Index
2
,
the
S&P
SmallCap
600
Index
3
,
and
the
MSCI
EAFE
Index
4
.
The
fixed-income
sub-portfolio
is
an
enhanced
bond
index
strategy
that
seeks
to
achieve
a
return
that
exceeds
that
of
the
Bloomberg
U.S.
Aggregate
Bond
Index.
Generally,
the
Fund
allocates
40%-60%
of
its
assets
to
the
underlying
equity
index
funds
and
40%-60%
of
its
assets
to
the
underlying
AZL
Enhanced
Bond
Index
Fund.
U.S.
equities
generally
had
positive
performance
in
2023,
due
in
part
to
falling
inflation,
better-than-expected
company
earnings,
and
resilient
consumer
demand.
While
large-cap
stocks
led
the
way,
small-cap
and
mid-cap
stock
indexes
also
ended
the
year
with
double-digit
gains.
The
European
Central
Bank’s
(ECB)
monetary
tightening
weighed
on
Eurozone
equities,
while
Russia’s
continued
war
with
Ukraine
weighed
on
international
equities.
Despite
these
economic
headwinds,
international
developed
market
equities
returned
double-digit
gains
for
the
year.
The
U.S.
fixed
income
market
received
a
boost
after
the
Federal
Reserve
indicated
it
could
be
near
the
end
of
its
cycle
of
interest
rate
hikes.
Most
sectors
of
the
bond
market
finished
with
positive
performance
in
2023,
led
by
high
yield
bonds
that
posted
double-digit
returns.
The
Fund,
which
invests
in
both
U.S.
and
international
markets,
underperformed
its
blended
benchmark
during
the
year
ended
December
31,
2023.
Its
off-benchmark
allocation
to
developed
market
non-U.S.
equities
slightly
detracted
from
relative
performance,
as
these
underperformed
U.S.
equities.
The
Fund’s
off-benchmark
allocation
to
mid-cap
and
small-cap
U.S.
equities
also
detracted
from
relative
performance,
as
these
underperformed
the
S&P
500
Index.
Past
performance
does
not
guarantee
future
results.
*
The
Fund’s
portfolio
composition
is
subject
to
change.
There
is
no
guarantee
that
any
sectors
mentioned
will
continue
to
perform
as
described
or
that
securities
in
such
sectors
will
be
held
by
the
Fund
in
the
future.
The
information
contained
in
this
commentary
is
for
informational
purposes
only
and
should
not
be
construed
as
a
recommendation
to
purchase
or
sell
securities
in
the
sector
mentioned.
The
Fund’s
holdings
and
weightings
are
as
of
December
31,
2023.
1
For
a
complete
description
of
the
Fund’s
performance
benchmark
please
refer
to
page
2
of
this
report.
2
The
Standard
&
Poor’s
MidCap
400
Index
(“S&P
400”)
is
a
widely
used
index
for
mid-sized
companies.
The
S&P
400
covers
7%
of
the
U.S.
equities
market,
and
is
part
of
a
series
of
S&P
U.S.
indexes
that
can
be
used
as
building
blocks
for
portfolio
composition.
3
The
Standard
&
Poor’s
SmallCap
600
Index
(“S&P
600”)
is
a
widely
used
index
for
small-capitalization
companies.
The
S&P
600
covers
3%
of
the
U.S.
equities
market,
and
is
part
of
a
series
of
S&P
indexes
that
can
be
used
as
building
blocks
for
portfolio
composition.
4
The
Morgan
Stanley
Capital
International,
Europe,
Australasia
and
Far
East
(“MSCI
EAFE”)
Index
is
a
free
float-adjusted
market
capitalization-weighted
index
that
is
designed
to
measure
the
equity
market
performance
of
developed
markets,
excluding
the
U.S.
&
Canada.
The
indexes
defined
above
are
unmanaged.
Investors
cannot
invest
directly
in
an
index.
2
AZL®
Balanced
Index
Strategy
Fund
Review
(Unaudited)
Fund
Objective
The
Fund’s
investment
objective
is
to
seek
long-term
capital
appreciation
with
preservation
of
capital
as
an
important
consideration.
This
objective
may
be
changed
by
the
Trustees
of
the
Fund
without
shareholder
approval.
The
Fund
seeks
to
achieve
its
objective
by
investing
in
a
combination
of
five
underlying
index
funds
(the
“Index
Strategy
Underlying
Funds”),
allocating
approximately
40%-60%
of
its
assets
in
the
underlying
equity
index
funds
and
approximately
40%-60%
of
its
assets
in
the
underlying
bond
index
fund.
Investment
Concerns
The
Fund
invests
in
underlying
funds,
so
its
investment
performance
is
directly
related
to
the
performance
of
those
underlying
funds.
Before
investing,
investors
should
assess
the
risks
associated
with
and
types
of
investments
made
by
each
of
the
underlying
funds
in
which
the
Fund
invests.
Stocks
are
more
volatile
and
carry
more
risk
and
return
potential
than
other
forms
of
investments.
International
investing
may
involve
risk
of
capital
loss
from
unfavorable
fluctuations
in
currency
values,
from
differences
in
generally
accepted
accounting
principles
or
from
economic
or
political
instability
in
other
nations.
Small-
to
mid-capitalization
companies
typically
have
a
higher
risk
of
failure
and
historically
have
experienced
a
greater
degree
of
volatility.
The
performance
of
the
underlying
funds
is
expected
to
be
lower
than
that
of
the
Indexes
because
of
fees
and
expenses.
Securities
in
which
the
underlying
funds
will
invest
may
involve
substantial
risk
and
may
be
subject
to
sudden
severe
price
declines.
Investing
in
a
single
industry
or
sector,
or
concentrating
investments
in
a
limited
number
of
industries
or
sectors,
tends
to
increase
the
risk
that
economic,
political,
or
regulatory
developments
affecting
certain
industries
or
sectors
will
have
a
large
impact
on
the
value
of
the
portfolio.
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
Mortgage-backed
investments
involve
risk
of
loss
due
to
prepayments
and,
like
any
bond,
due
to
default.
Because
of
the
sensitivity
of
mortgage-
related
securities
to
changes
in
interest
rates,
an
underlying
fund’s
performance
may
be
more
volatile
than
if
it
did
not
hold
these
securities.
Bonds
offer
a
relatively
stable
level
of
income,
although
bond
prices
will
fluctuate,
providing
the
potential
for
principal
gain
or
loss.
For
a
complete
description
of
these
and
other
risks
associated
with
investing
in
the
Fund,
please
refer
to
the
Fund’s
prospectus.
Growth
of
$10,000
Investment
The
chart
above
represents
a
comparison
of
a
hypothetical
investment
in
the
Fund
versus
a
similar
investment
in
the
Fund’s
benchmarks
and
represents
the
reinvestment
of
dividends
and
capital
gains
in
the
Fund.
Past
performance
does
not
guarantee
future
results.
The
performance
data
quoted
represents
past
performance
and
current
returns
may
be
lower
or
higher.
The
investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
the
original
cost.
To
obtain
performance
information
current
to
the
most
recent
month
end,
please
visit
www.Allianzlife.com.
The
above
expense
ratio
is
based
on
the
current
Fund
prospectus
dated
May
1,
2023.
The
Manager
and
the
Fund
have
entered
into
a
written
agreement
limiting
operating
expenses,
excluding
certain
expenses
(such
as
interest
expense
and
acquired
fund
fees
and
expenses),
to
0.20%
through
April
30,
2025.
Additional
information
pertaining
to
the
December
31,
2023
expense
ratio
can
be
found
in
the
Financial
Highlights.
Acquired
fund
fees
and
expenses
are
incurred
indirectly
by
the
Fund
through
the
valuation
of
the
Fund’s
investments
in
the
Index
Strategy
Underlying
Funds.
Accordingly,
acquired
fund
fees
and
expenses
affect
the
Fund’s
total
returns.
Because
these
fees
and
expenses
are
not
included
in
the
Fund’s
financial
highlights,
the
Fund’s
total
annual
fund
operating
expenses,
as
shown
in
the
current
prospectus,
do
not
correlate
to
the
ratios
of
expenses
to
average
net
assets
shown
in
the
Financial
Highlights.
Without
acquired
fund
fees
and
expenses
the
Fund’s
gross
expense
ratio
would
be
0.09%.
The
total
return
of
the
Fund
does
not
reflect
the
effect
of
any
insurance
charges,
the
annual
maintenance
fee
or
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Such
charges,
fees
and
tax
payments
would
reduce
the
performance
quoted.
The
Fund’s
performance
is
measured
against
the
Standard
&
Poor’s
500
Index
(“S&P
500”),
the
Bloomberg
U.S.
Aggregate
Bond
Index
and
the
Balanced
Composite
Index
(“Composite”).
The
S&P
500
is
representative
of
500
selected
common
stocks,
most
of
which
are
listed
on
the
New
York
Stock
Exchange,
and
is
a
measure
of
the
U.S.
Stock
market
as
a
whole.
The
Bloomberg
U.S.
Aggregate
Bond
Index
is
a
market
value-
weighted
performance
benchmark
for
investment-grade
fixed-rate
debt
issues,
including
government,
corporate,
asset-backed,
and
mortgage-
backed
securities,
with
maturities
of
at
least
one
year.
The
Composite
is
a
blended
index
comprised
of
(50%)
S&P
500
and
(50%)
Bloomberg
U.S.
Aggregate
Bond
Index.
These
indexes
are
unmanaged
and
do
not
reflect
the
deduction
of
fees
associated
with
a
mutual
fund,
such
as
investment
management
and
fund
accounting
fees.
The
Fund’s
performance
reflects
the
deduction
of
fees
for
services
provided
to
the
Fund.
Investors
cannot
invest
directly
in
an
index.
Average
Annual
Total
Returns
as
of
December
31,
2023
1
Year
3
Years
5
Years
10
Years
AZL
®
Balanced
Index
Strategy
Fund
13.21%
1.89%
6.84%
5.33%
Balanced
Composite
Index
15.62%
3.37%
8.63%
7.12%
Bloomberg
U.S.
Aggregate
Bond
Index
5.53%
(3.31)%
1.10%
1.81%
S&P
500
Index
26.29%
10.00%
15.69%
12.03%
Expense
Ratio
Gross
AZL
®
Balanced
Index
Strategy
Fund
0.68%
AZL
Balanced
Index
Strategy
Fund
3
Expense
Examples
(Unaudited)
As
a
shareholder
of
the
AZL
Balanced
Index
Strategy
Fund
(the
“Fund”),
you
incur
ongoing
costs,
including
management
fees,
distribution
fees,
and
other
Fund
expenses.
These
examples
are
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
Please
note
that
the
expenses
shown
in
each
table
do
not
reflect
expenses
that
apply
to
the
subaccount
or
the
insurance
contract.
If
the
expenses
that
apply
to
the
subaccount
or
the
insurance
contract
were
included,
your
costs
would
have
been
higher.
These
examples
are
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
periods
presented
below.
The
Actual
Expense
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
below,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
table
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
this
period.
The
Hypothetical
Expense
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
Balanced
Index
Strategy
Fund
$1,000.00
$1,051.80
$0.47
0.09%
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
Balanced
Index
Strategy
Fund
$1,000.00
$1,024.75
$0.46
0.09%
*
Expenses
are
equal
to
the
average
account
value
multiplied
by
the
Fund's
annualized
expense
ratio
multiplied
by
184/365
(the
number
of
days
in
the
most
recent
fiscal
half-year
divided
by
the
number
of
days
in
the
fiscal
year).
Portfolio
Composition
(Unaudited)
Investments
Percent
of
Net
Assets
Fixed
Income
Fund
49
.9
%
Domestic
Equity
Funds
37
.6
International
Equity
Fund
12
.6
Total
Investment
Securities
100
.1
Net
other
assets
(liabilities)
(
0
.1
)
Net
Assets
100
.0
%
AZL
Balanced
Index
Strategy
Fund
Schedule
of
Portfolio
Investments
December
31,
2023
4
See
accompanying
notes
to
the
financial
statements.
Percentages
indicated
are
based
on
net
assets
as
of
December
31,
2023
.
Shares
Value
Affiliated
Investment
Companies
(
100
.1
%
):
Domestic
Equity
Funds
(
37
.6
%
):
1,227,280
AZL
Mid
Cap
Index
Fund,
Class
2
$
26,067,425
4,487,709
AZL
S&P
500
Index
Fund,
Class
2
90,517,098
1,137,345
AZL
Small
Cap
Stock
Index
Fund,
Class
2
13,921,104
130,505,627
1
Fixed
Income
Fund
(
49
.9
%
):
17,672,914
AZL
Enhanced
Bond
Index
Fund
173,548,020
Shares
Value
Affiliated
Investment
Companies,
continued
International
Equity
Fund
(
12
.6
%
):
2,510,841
AZL
International
Index
Fund,
Class
2
$
43,789,066
Total
Affiliated
Investment
Companies
(Cost
$281,965,135)
347,842,713
Total
Investment
Securities
(Cost
$281,965,135)
—
100.1%(a)
347,842,713
Net
other
assets
(liabilities)
—
(0.1)%
(
217,323
)
Net
Assets
—
100.0%
$
347,625,390
(a)
See
Federal
Tax
Information
listed
in
the
Notes
to
the
Financial
Statements.
AZL
Balanced
Index
Strategy
Fund
5
See
accompanying
notes
to
the
financial
statements.
Statement
of
Assets
and
Liabilities
December
31,
2023
Statement
of
Operations
For
the
Year
Ended
December
31,
2023
Assets:
Investments
in
affiliates,
at
cost
$
281,965,135
Investments
in
affiliates,
at
value
$
347,842,713
Interest
and
dividends
receivable
138
Receivable
for
affiliated
investments
sold
394,453
Prepaid
expenses
1,576
Total
Assets
348,238,880
Liabilities:
Cash
overdraft
394,453
Payable
for
capital
shares
redeemed
188,200
Management
fees
payable
14,587
Administration
fees
payable
6,714
Custodian
fees
payable
1,296
Administrative
and
compliance
services
fees
payable
405
Transfer
agent
fees
payable
698
Trustee
fees
payable
1,682
Other
accrued
liabilities
5,455
Total
Liabilities
613,490
Commitments
and
contingent
liabilities^
Net
Assets
$
347,625,390
Net
Assets
Consist
of:
Paid
in
capital
$
271,854,340
Total
distributable
earnings
75,771,050
Net
Assets
$
347,625,390
Shares
of
beneficial
interest
(unlimited
number
of
shares
authorized,
no
par
value)
24,355,007
Net
Asset
Value
(offering
and
redemption
price
per
share)
$
14.28
*
^
See
Note
3
in
Notes
to
the
Financial
Statements.
*
Per
share
amounts
may
not
recalculate
due
to
rounding
of
net
assets
and
shares
outstanding.
Investment
Income:
Dividends
from
affiliates
$
5,239,596
Dividends
from
non-affiliates
1,045
Total
Investment
Income
5,240,641
Expenses:
Management
fees
172,112
Administration
fees
71,509
Custodian
fees
8,408
Administrative
and
compliance
services
fees
4,672
Transfer
agent
fees
7,306
Trustee
fees
19,169
Professional
fees
18,445
Shareholder
reports
4,480
Other
expenses
6,745
Total
expenses
312,846
Net
Investment
Income/(Loss)
4,927,795
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments:
Net
realized
gains/(losses)
on
affiliated
underlying
funds
4,075,076
Net
realized
gains
distributions
from
affiliated
underlying
funds
4,972,925
Change
in
net
unrealized
appreciation/depreciation
on
affiliated
underlying
funds
28,511,992
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments
37,559,993
Change
in
Net
Assets
Resulting
From
Operations
$
42,487,788
AZL
Balanced
Index
Strategy
Fund
6
See
accompanying
notes
to
the
financial
statements.
Statements
of
Changes
in
Net
Assets
For
the
Year
Ended
December
31,
2023
For
the
Year
Ended
December
31,
2022
Change
In
Net
Assets:
Operations:
Net
investment
income/(loss)
$
4,927,795
$
5,062,254
Net
realized
gains/(losses)
on
investments
9,048,001
20,001,210
Change
in
unrealized
appreciation/depreciation
on
investments
28,511,992
(
90,623,801
)
Change
in
net
assets
resulting
from
operations
42,487,788
(
65,560,337
)
Distributions
to
Shareholders:
Distributions
(
27,030,919
)
(
33,007,068
)
Change
in
net
assets
resulting
from
distributions
to
shareholders
(
27,030,919
)
(
33,007,068
)
Capital
Transactions:
Proceeds
from
shares
issued
6,724,552
5,020,134
Proceeds
from
dividends
reinvested
27,030,919
33,007,068
Value
of
shares
redeemed
(
44,668,426
)
(
41,552,550
)
Change
in
net
assets
resulting
from
capital
transactions
(
10,912,955
)
(
3,525,348
)
Change
in
net
assets
4,543,914
(
102,092,753
)
Net
Assets:
Beginning
of
period
343,081,476
445,174,229
End
of
period
$
347,625,390
$
343,081,476
Share
Transactions:
Shares
issued
470,754
321,940
Dividends
reinvested
2,095,420
2,474,293
Shares
redeemed
(
3,142,148
)
(
2,652,854
)
Change
in
shares
(
575,974
)
143,379
AZL
Balanced
Index
Strategy
Fund
Financial
Highlights
(Selected
data
for
a
share
of
beneficial
interest
outstanding
throughout
the
periods
indicated.
Does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.)
7
See
accompanying
notes
to
the
financial
statements.
Year
Ended
December
31,
2023
Year
Ended
December
31,
2022
Year
Ended
December
31,
2021
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Net
Asset
Value,
Beginning
of
Period
$13.76
$17.96
$17.48
$16.46
$14.89
Investment
Activities:
Net
Investment
Income/(Loss)(a)
0
.20
0
.21
0
.15
0
.33
0
.30
Net
Realized
and
Unrealized
Gains/(Losses)
on
Investments
1
.49
(
2
.97
)
1
.56
1
.62
2
.22
Total
from
Investment
Activities
1
.69
(
2
.76
)
1
.71
1
.95
2
.52
Distributions
to
Shareholders
From:
Net
Investment
Income
(
0
.27
)
(
0
.37
)
(
0
.34
)
(
0
.33
)
(
0
.38
)
Net
Realized
Gains
(
0
.90
)
(
1
.07
)
(
0
.89
)
(
0
.60
)
(
0
.57
)
Total
Dividends
(
1
.17
)
(
1
.44
)
(
1
.23
)
(
0
.93
)
(
0
.95
)
Net
Asset
Value,
End
of
Period
$14.28
$13.76
$17.96
$17.48
$16.46
Total
Return
(b)
13.21
%
(
15.10
)
%
10.04
%
12.24
%
17.24
%
Ratios
to
Average
Net
Assets/Supplemental
Data:
Net
Assets,
End
of
Period
(000's)
$347,625
$343,081
$445,174
$417,253
$397,402
Net
Investment
Income/(Loss)
1
.43
%
1
.35
%
0
.85
%
2
.01
%
1
.87
%
Expenses
Before
Reductions*(c)
0
.09
%
0
.09
%
0
.08
%
0
.09
%
0
.09
%
Expenses
Net
of
Reductions*
0
.09
%
0
.09
%
0
.08
%
0
.09
%
0
.09
%
Portfolio
Turnover
Rate
5
%
8
%
13
%
19
%
5
%
*
The
expense
ratios
exclude
the
impact
of
fees/expenses
paid
by
each
underlying
fund.
(a)
Calculated
using
the
average
shares
method.
(b)
The
returns
include
reinvested
dividends
and
fund
level
expenses,
but
exclude
insurance
contract
charges. If
these
charges
were
included,
the
returns
would
have
been
lower.
(c)
Excludes
fee
reductions. If
such
fee
reductions
had
not
occurred,
the
ratios
would
have
been
as
indicated.
AZL
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
8
1.
Organization
The
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”)
was
organized
as
a
Delaware
statutory
trust
on
June
16,
2004.
The
Trust
is
an
open-end
management
investment
company
registered
under
the
Investment
Company
Act
of
1940,
as
amended,
(the
“1940
Act”)
and
thus
is
determined
to
be
an
investment
company,
and
follows
the
investment
company
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946
“Financial
Services—Investment
Companies”.
The
Trust
consists
of 9
separate
investment
portfolios
(collectively,
the
“Funds”),
of
which
one
is
included
in
this
report,
the
AZL
Balanced
Index
Strategy
Fund (the
“Fund”),
and 8
are
presented
in
separate
reports.
The
Fund
is
a
diversified
series
of
the
Trust.
The
Fund
is
a
“fund
of
funds”,
which
means
that
the
Fund
invests
primarily
in
other
mutual
funds
(the
"Underlying
Funds").
Underlying
Funds
invest
in
stocks,
bonds,
and
other
securities
and
reflect
varying
amounts
of
potential
investment
risk
and
reward.
The
Underlying
Funds
record
their
investments
at
fair
value.
Periodically,
the
Fund
will
adjust
its
asset
allocation
as
it
seeks
to
achieve
its
investment
objective.
The
Trust
is
authorized
to
issue
an
unlimited
number
of
shares
of
the
Fund
without
par
value.
Shares
of
the
Fund
are
available
through
the
variable
annuity
contracts
offered
through
the
separate
accounts
of
participating
insurance
companies.
Currently,
the
Fund
only
offers
its
shares
to
separate
accounts
of
Allianz
Life
Insurance
Company
of
North
America
and
Allianz
Life
Insurance
Company
of
New
York,
affiliates
of
the
Trust
and
the
Manager,
as
defined
below.
Under
the
Trust’s
organizational
documents,
its
officers
and
trustees
are
indemnified
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
In
addition,
in
the
normal
course
of
business,
the
Fund
may
enter
into
contracts
with
its
vendors
and
others
that
provide
for
general
indemnifications.
The
Fund’s
maximum
exposure
under
these
arrangements
is
unknown,
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund.
However,
based
on
experience,
the
Fund
expects
that
risk
of
loss
to
be
remote.
2.
Significant
Accounting
Policies
The
following
is
a
summary
of
significant
accounting
policies
followed
by
the
Fund
in
the
preparation
of
its
financial
statements.
The
policies
conform
with
U.S.
generally
accepted
accounting
principles
(“U.S.
GAAP”).
The
preparation
of
financial
statements
requires
management
to
make
certain
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
and
disclosure
of
contingent
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
Security
Valuation
The
Fund
records
its
investments
at
fair
value.
Fair
value
is
defined
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
willing
market
participants
at
the
measurement
date.
The
valuation
techniques
used
to
determine
fair
value
are
further
described
in
Note
4
below.
Investment
Transactions
and
Investment
Income
Investment
transactions
are
accounted
for
on
trade
date.
Net
realized
gains
and
losses
on
investments
sold
and
on
foreign
currency
transactions
are
recorded
on
the
basis
of
identified
cost.
Interest
income
is
recorded
on
the
accrual
basis
and
includes,
where
applicable,
the
amortization
of
premiums
or
accretion
of
discounts.
Dividend
income
is
recorded
on
the
ex-
dividend
date
except
in
the
case
of
foreign
securities,
in
which
case
dividends
are
recorded
as
soon
as
such
information
becomes
available.
Distributions
to
Shareholders
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
The
Fund
distributes
its
dividends
from
net
investment
income
and
net
realized
capital
gains,
if
any,
on
an
annual
basis.
The
amount
of
distributions
from
net
investment
income
and
from
net
realized
gains
is
determined
in
accordance
with
federal
income
tax
regulations,
which
may
differ
from
U.S.
GAAP.
These
“book/tax”
differences
are
either
temporary
or
permanent
in
nature.
To
the
extent
these
differences
are
permanent
in
nature
(e.g.,
return
of
capital,
net
operating
loss,
reclassification
of
certain
market
discounts,
gain/loss,
paydowns,
and
distributions),
such
amounts
are
reclassified
within
the
composition
of
net
assets
based
on
their
federal
tax-basis
treatment;
temporary
differences
(e.g.,
wash
sales
and
differing
treatment
on
certain
investments)
do
not
require
reclassification.
Distributions
to
shareholders
that
exceed
net
investment
income
and
net
realized
gains
for
tax
purposes
are
reported
as
distributions
of
capital.
Expense
Allocation
Expenses
directly
attributable
to
the
Fund
are
charged
directly
to
the
Fund,
while
expenses
attributable
to
more
than
one
Fund
are
allocated
among
the
respective
Funds
based
upon
relative
net
assets
or
some
other
reasonable
method.
Expenses
which
are
attributable
to
more
than
one
Trust
are
allocated
across
the
Allianz
Variable
Insurance
Products
Trust,
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
AIM
ETF
Products
Trust
based
upon
relative
net
assets
or
another
reasonable
basis.
Allianz
Investment
Management
LLC
(the
“Manager”),
serves
as
the
investment
manager
for
the
Trust,
Allianz
Variable
Insurance
Products
Trust
and
AIM
ETF
Products
Trust.
This
report
does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.
Affiliated
Securities
Transactions
Pursuant
to
Rule
17a-7
under
the
1940
Act,
the
Fund
may
engage
in
securities
transactions
with
affiliated
investment
companies
and
advisory
accounts
managed
by
the
Manager.
Any
such
purchase
or
sale
transaction
must
be
effected
without
a
brokerage
commission
or
other
remuneration,
except
for
customary
transfer
fees.
The
transaction
must
be
effected
at
the
current
market
price,
which
is
either
the
security’s
last
sale
price
on
an
exchange
or,
if
there
are
no
transactions
in
the
security
that
day,
at
the
average
of
the
highest
bid
and
lowest
asked
price.
During
the
year
ended
December
31,
2023,
the
Fund
did
not
engage
in
any
Rule
17a-7
transactions.
AZL
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
9
3.
Fees
and
Transactions
with
Affiliates
and
Other
Parties
The
Manager
provides
investment
advisory
and
management
services
for
the
Fund.
The
Manager
has
contractually
agreed
to
waive
fees
and
reimburse
the
Fund
to
limit
the
annual
expenses,
excluding
interest
expense
(e.g.,
cash
overdraft
fees),
taxes,
brokerage
commissions,
acquired
fund
fees
and
expenses,
other
expenditures
that
are
capitalized
in
accordance
with
U.S.
GAAP
and
other
extraordinary
expenses
not
incurred
in
the
ordinary
course
of
the
Fund’s
business,
based
on
the
daily
net
assets
of
the
Fund,
through
April
30,
2025.
Expenses
incurred
for
investment
advisory
and
management
services
are
reflected
on
the
Statement
of
Operations
as
“Management
fees.”
For
the
year
ended
December
31,
2023,
the
annual
rate
due
to
the
Manager
and
the
annual
expense
limit
were
as
follows:
Any
amounts
contractually
waived
or remitted
to
the
Fund by
the
Manager
with
respect
to
the
annual
expense
limit
in
a
particular
fiscal
year
may
be
reimbursed
by
the
Fund
to
the
Manager,
provided
that
such
reimbursement
will
not
cause
the
Fund
to
exceed
the
lesser
of
any
applicable
expense
limit
in
effect
(i)
at
the
time
of
the
original
waiver
or
payment
and
(ii)
at
the
time
of
such
reimbursement,
as
supported
by
standard accounting
practices.
Such
reimbursement
only
applies
to
amounts
waived
or
paid
by
the
Manager
within
the
three
years
prior
to
the
date
of
such
reimbursement,
calculated
monthly
from
when
the
waiver
or
payment
was
recorded.
Any
amounts
recouped
by
the
Manager
during
the
period
are
reflected
on
the
Statement
of
Operations
as
“Recoupment
of
prior
expenses
reimbursed
by
the
Manager.”
At
December
31,
2023,
there
were
no
remaining
contractual
reimbursements
subject
to
repayment
by
the
Fund
in
subsequent
years,
and
no
commitment
or
contingent
liability
is
expected.
Management
fees,
which
the
Manager
may
waive
in
order
to
maintain
more
competitive
expense
ratios,
are
not
subject
to
repayment
in
subsequent
years.
Information
on
the
total
amount
waived/reimbursed
by
the
Manager
or
repaid
to
the
Manager
by
the
Fund
during
the
period
can
be
found
on
the
Statement
of
Operations,
as
applicable.
During
the
year
ended
December
31,
2023,
there
were
no
such
waivers.
The
Manager
serves
as
the
investment
adviser
of the
underlying
funds
in
which
the
Fund
invests.
At
December
31,
2023,
these
underlying
funds
are
noted
as
Affiliated
Investment
Companies
in
the
Fund’s
Schedule
of
Portfolio
Investments.
Additional
information,
including
financial
statements,
about
these
Funds
is
available
at
www.allianzlife.com.
The
Manager
is
paid
a
separate
fee
from
the
underlying
funds
for
such
services.
A
summary
of
the
Fund’s
investments
in
affiliated
investment
companies
for
the
year
ended
December
31,
2023
is
as
follows:
Pursuant
to
separate
agreements
between
the
Trust
and
the
Manager,
the
Manager
provides
a
Chief
Compliance
Officer
(“CCO”)
and
certain
compliance
oversight
and
regulatory
filing
services
to
the
Trust.
Under
these
agreements,
the
Manager
is
entitled
to
an
amount
equal
to
a
portion
of
the
compensation
and
certain
other
expenses
related
to
the
individuals
performing
the
CCO
and
compliance
oversight
services,
as
well
as
$100
per
hour
for
time
incurred
in
connection
with
the
preparation
and
filing
of
certain
documents
with
the
SEC.
The
fees
are
paid
to
the
Manager
on
a
quarterly
basis.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administrative
and
compliance
services
fees.”
Citi
Fund
Services
Ohio,
Inc.
(“Citi”
or
the
“Administrator”),
a
wholly
owned
subsidiary
of
Citigroup,
Inc.,
with
which
an
officer
of
the
Trust
is
affiliated,
serves
as
the
Trust’s
administrator
and
fund
accountant,
and
assists
the
Trust
in
all
aspects
of
its
administration
and
operation.
The
Administrator
is
entitled
to
a
fee,
accrued
daily
and
paid
monthly.
The
Administrator
is
entitled
to
an
annual
fee
for
each
additional
class
of
shares
of
any
Fund,
certain
annual
fees
in
supporting
fair
value
services,
and
a
Trust-wide
annual
fee
for
providing
infrastructure
and
support
in
implementing
the
written
policies
and
procedures
comprising
the
Fund’s
compliance
program.
The
Administrator
is
also
reimbursed
for
certain
expenses
incurred.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administration
fees.”
FIS
Investor
Services
LLC
(“FIS”)
serves
as
the
Fund's
transfer
agent.
Under
the
Transfer
Agent
Agreement,
the
Trust
pays
FIS
a
fee
for
its
services
and
reimburses
FIS
for
all
of
their
reasonable
out-of-pocket
expenses
incurred
in
providing
these
services.
The
Bank
of
New
York
Mellon
(“BNY
Mellon”
or
the
“Custodian”)
serves
as
the
Trust’s
custodian.
For
these
services
as
custodian,
the
Funds
pay
BNY
Mellon
a
fee
based
on
a
percentage
of
assets
held
on
behalf
of
the
Funds,
plus
certain
out-of-pocket
charges.
Allianz
Life
Financial
Services,
LLC
(“ALFS”),
an
affiliate
of
the
Manager,
serves
as
distributor
of
the
Fund.
ALFS
receives
an
annual
Trust-wide
annual
fee
of
$7,500,
paid
by
the
Manager
from
its
profits
and
not
by
the
Trust,
for
recordkeeping
and
reporting
services.
Certain
Officers
and
Trustees
of
the
Trust
are
affiliated
with
the
Manager
or
the
Administrator.
Such
Officers
(except
for
the
Trust’s
CCO
as
noted
above)
and
Trustees
receive
no
compensation
from
the
Trust
for
serving
in
their
respective
roles.
Annual
Rate
Annual
Expense
Limit
AZL
Balanced
Index
Strategy
Fund
0.05%
0.20%
Value
12/31/22
Purchases
at
Cost
Proceeds
from
Sales
Net
Realized
Gains
(Losses)
Change
in
Net
Unrealized
Appreciation
(Depreciation)
Value
12/31/23
Shares
as
of
12/31/23
Dividend
Income
Net
Realized
Gains
Distributions
from
Affiliated
Underlying
Funds
AZL
Enhanced
Bond
Index
Fund
$
171,530,181
$
5,775,872
$
(9,874,542)
$
(2,111,613)
$
8,228,122
$
173,548,020
17,672,914
$
2,795,594
$
—
AZL
International
Index
Fund,
Class
2
43,179,803
1,164,761
(6,531,753)
1,236,520
4,739,735
43,789,066
2,510,841
1,040,093
—
AZL
Mid
Cap
Index
Fund,
Class
2
26,036,905
2,519,032
(5,487,977)
921,326
2,078,139
26,067,425
1,227,280
190,595
869,406
AZL
S&P
500
Index
Fund,
Class
2
88,495,341
5,583,796
(19,883,953)
3,699,343
12,622,571
90,517,098
4,487,709
1,069,880
3,323,331
AZL
Small
Cap
Stock
Index
Fund,
Class
2
13,969,790
1,473,662
(2,695,273)
329,500
843,425
13,921,104
1,137,345
143,434
780,188
$
343,212,020
$
16,517,123
$
(44,473,498)
$
4,075,076
$
28,511,992
$
347,842,713
27,036,0
89
$
5,239,596
$
4,972,925
AZL
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
10
4.
Investment
Valuation
Summary
The
valuation
techniques
employed
by
the
Fund,
as
described
below,
maximize
the
use
of
observable
inputs
and
minimize
the
use
of
unobservable
inputs
in
determining
fair
value.
The
inputs
used
for
valuing
the
Fund’s
investments
are
summarized
in
the
three
broad
levels
listed
below:
•
Level
1
-
quoted
prices
in
active
markets
for
identical
assets
•
Level
2
-
other
significant
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayments
speeds,
credit
risk,
etc.)
•
Level
3
-
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
investments)
Changes
in
valuation
techniques
may
result
in
transfers
in
or
out
of
an
assigned
level
within
the
disclosure
hierarchy.
The
inputs
or
methodology
used
for
valuing
investments
is
not
necessarily
an
indication
of
the
risk
associated
with
investing
in
those
investments.
Investments
in
other
investment
companies
are
valued
at
their
published
net
asset
value
(“NAV”).
Security
prices
are
determined
pursuant
to
valuation
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
“Board”
or
“Trustees”)
as
of
the
close
of
the
New
York
Stock
Exchange
(“NYSE”)
(generally
4:00
pm
Eastern
Time).
The
investments
utilizing
Level
1
valuations
represent
investments
in
open-end
investment
companies.
The
Board
has
designated
the
Manager
to
perform
the
Fund’s
fair
value
determinations
in
accordance
with
valuation
procedures
approved
by
the
Board.
The
effect
of
using
fair
value
pricing
is
that
the
Fund’s
NAV
will
be
subject
to
the
judgment
of
the
Manager.
The
Manager's
fair
valuation
process
is
subject
to
the
oversight
of
the
Board.
The
following
is
a
summary
of
the
valuation
inputs
used
as
of
December
31,
2023
in
valuing
the
Fund's
investments
based
upon
the
three
levels
defined
above:
5.
Security
Purchases
and
Sales
For
the
year
ended
December
31,
2023,
cost
of
purchases
and
proceeds
from
sales
of
securities
(excluding
securities
maturing
less
than
one
year
from
acquisition)
were
as
follows:
6.
Investment
Risks
The
risks
below
are
presented
in
an
order
intended
to
facilitate
readability.
Their
order
does
not
imply
that
the
realization
of
one
risk
is
more
likely
to
occur
more
frequently
than
another
risk,
nor
does
it
imply
that
the
realization
of
one
risk
is
likely
to
have
a
greater
adverse
impact
than
another
risk.
The
Fund
may
be
subject
to
other
risks
in
addition
to
these
identified
risks.
This
section
discusses
certain
common
principal
risks
encountered
by
the
Fund.
Derivatives
Risk:
The
Fund
may
invest
directly
or
through
affiliated
or
unaffiliated
mutual
funds
in
derivative
instruments
such
as
futures,
options,
and
options
on
futures.
A
derivative
is
a
financial
contract
whose
value
depends
on,
or
is
derived
from,
the
value
of
an
underlying
asset,
reference
rate,
or
risk.
Use
of
derivative
instruments
involves
risks
different
from,
or
possibly
greater
than,
the
risks
associated
with
investing
directly
in
securities
and
other
traditional
investments.
Derivatives
are
subject
to
a
number
of
other
risks,
such
as
liquidity
risk,
interest
rate
risk,
market
risk,
credit
risk,
and
selection
risk.
Derivatives
also
involve
the
risk
of
mispricing
or
improper
valuation
and
the
risk
that
changes
in
the
value
may
not
correlate
perfectly
with
the
underlying
asset,
rate,
or
index.
Using
derivatives
may
result
in
losses,
possibly
in
excess
of
the
principal
amount
invested.
Also,
suitable
derivative
transactions
may
not
be
available
in
all
circumstances.
The
other
party
to
a
derivatives
contract
could
default.
During
the
year
ended
December
31,
2023,
the
Fund
did
not
directly
invest
in
derivatives.
Foreign
Securities
Risk:
Investing
in
the
securities
of
non-U.S.
issuers
involves
a
number
of
risks,
such
as
fluctuations
in
currency
values,
adverse
political,
social
or
economic
developments,
and
differences
in
social
and
economic
developments
or
policies.
Such
risks
include
future
political
and
economic
developments,
and
the
possible
imposition
of
exchange
controls
or
other
foreign
governmental
laws
and
restrictions.
In
addition,
with
respect
to
certain
countries,
there
is
the
possibility
of
expropriation
of
assets,
confiscatory
taxation,
political
or
social
instability
or
diplomatic
developments
which
could
adversely
affect
investments
in
those
securities.
Certain
foreign
companies
may
be
subject
to
sanctions,
embargoes,
or
other
governmental
actions
that
may
impair
or
otherwise
limit
the
ability
to
invest
in,
receive,
hold
or
sell
the
securities
of
such
companies.
Fund
of
Fund
Risk:
The
Fund,
as
a
shareholder
of
the
underlying
funds,
indirectly
bears
its
proportionate
share
of
any
investment
management
fees
and
other
expenses
of
the
underlying
funds.
Further
due
to
the
fees
and
expenses
paid
by
the
Fund,
as
well
as
small
variations
in
the
Fund’s
actual
allocations
to
the
underlying
funds
and
any
futures
and
cash
held
in
the
Fund’s
portfolio,
the
performance
and
income
distributions
of
the
Fund
will
not
be
the
same
as
the
performance
and
income
distributions
of
the
underlying
funds.
In
addition,
the
Fund
maintains
indirect
exposure
to
various
types
of
risk
which
may
exist
in
the
underlying
Funds,
such
as
foreign
securities
risk,
fixed
income
securities
risk
and
other
risks.
Interest
Rate
Risk:
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
The
price
of
a
bond
is
also
affected
by
its
maturity.
Bonds
with
longer
maturities
generally
have
greater
sensitivity
to
changes
in
interest
rates.
Investment
Securities:
Level
1
Level
2
Level
3
Total
Affiliated
Investment
Companies
$
347,842,713
$
—
$
—
$
347,842,713
Total
Investment
Securities
$347,842,713
$—
$—
$347,842,713
Purchases
Sales
AZL
Balanced
Index
Strategy
Fund
$16,517,123
$44,473,498
AZL
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
11
Market
Risk
:
The
market
price
of
securities
owned
by
the
underlying
funds
may
go
up
or
down,
sometimes
rapidly
and
unpredictably.
Securities
may
decline
in
value
due
to
factors
affecting
securities
markets
generally
or
particular
industries
represented
in
the
securities
markets.
The
value
of
a
security
may
decline
due
to
general
market
conditions,
economic
trends
or
events that
are
not
specifically
related
to
a
particular
company,
such
as
real
or
perceived
adverse
economic
conditions,
inflation,
recessions, changes
in
the
general
outlook
for
corporate
earnings,
changes
in
interest
or
currency
rates,
or
adverse
investor
sentiment,
as
well
as
natural
disasters,
and
outbreaks
of
infectious
illnesses
or
other
widespread
public
health
issues.
7.
Federal
Tax
Information
It
is
the
policy
of
the
Fund
to
continue
to
qualify
as
a
regulated
investment
company
by
complying
with
the
provisions
available
to
certain
investment
companies,
as
defined
under
Subchapter
M
of
the
Internal
Revenue
Code,
and
to
make
distributions
of
net
investment
income
and
net
realized
gains
sufficient
to
relieve
it
from
all,
or
substantially
all,
federal
income
taxes.
Accordingly,
no
provisions
for
federal
income
taxes
are
required
in
the
financial
statements.
Management
of
the
Fund
has
reviewed
tax
positions
taken
in
tax
years
that
remain
subject
to
examination
by
all
major
tax
jurisdictions,
including
federal
(i.e.,
the
last
four
tax
year
ends
and
the
interim
tax
period
since
then,
as
applicable).
Management
believes
that
there
is
no
tax
liability
resulting
from
unrecognized
tax
benefits
related
to
uncertain
tax
positions
taken.
Cost
of
securities,
including
derivatives
and
short
positions
as
applicable,
for
federal
income
tax
purposes
at
December
31,
2023
was
$286,693,438.
The
gross
unrealized
appreciation/
(depreciation)
on
a
tax
basis
was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2023, was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2022, was
as
follows:
At
December
31,
2023,
the
components
of
accumulated
earnings
on
a
tax
basis
were
as
follows:
8.
Ownership
and
Principal
Holders
The
beneficial
ownership,
either
directly
or
indirectly,
of
more
than
25%
of
the
voting
securities
of
a
fund
creates
presumptions
of
control
of
the
fund,
under
section
2
(a)(9)
of
the
1940
Act.
As
of
December
31,
2023,
the
Fund
had
an
individual
shareholder
account
which
is
affiliated
with
the
Manager
representing
ownership
in
excess
of
90%
of
the
Fund.
Investment
activities
of
this
shareholder
could
have
a
material
impact
to
the
Fund.
9.
Recent
Regulatory
Pronouncements
Effective
January
24,
2023,
the
SEC
adopted
rule
and
form
amendments
that
require
open-end
management
investment
companies
to
transmit
concise
and
visually
engaging
annual
and
semi-annual
reports
to
shareholders
that
highlight
key
information.
Other
information,
including
financial
statements,
will
no
longer
appear
in
a
tailored
shareholder
report
but
must
be
available
online,
delivered
free
of
charge
upon
request,
and
filed
on
a
semi-annual
basis
on
Form
N-CSR.
The
rule
and
form
amendments
have
a
compliance
date
of
July
24,
2024.
Accordingly,
the
rule
and
form
amendments
will
not
impact
the
Fund
until
the
2024
semi-annual
shareholder
report
and
will
have
no
effect
on
the
Fund’s
accounting
policies
or
financial
statements.
Unrealized
appreciation
$71,978,659
Unrealized
(depreciation)
(10,829,384)
Net
unrealized
appreciation/(depreciation)
$61,149,275
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
Balanced
Index
Strategy
Fund
$6,203,918
$20,827,001
$27,030,919
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
Balanced
Index
Strategy
Fund
$8,497,247
$24,509,821
$33,007,068
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Undistributed
Ordinary
Income
Undistributed
Long-Term
Capital
Gains
Accumulated
Capital
and
Other
Losses
Unrealized
Appreciation/
Depreciation(a)
Total
Accumulated
Earnings/
(Deficit)
AZL
Balanced
Index
Strategy
Fund
$4,927,776
$9,693,999
$—
$61,149,275
$75,771,050
(a)
The
differences
between
book-basis
and
tax-basis
unrealized
appreciation/(depreciation)
are
attributable
primarily
to
tax
deferral
of
losses
on
wash
sales.
AZL
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
12
10.
Subsequent
Events
Management
of
the
Fund
has
evaluated
the
need
for
additional
disclosures
or
adjustments
resulting
from
events
through
the
date
the
financial
statements
were
issued.
Based
on
this
evaluation,
there
were
no
subsequent
events
to
report
that
would
have
material
impact
on
the
Fund’s
financial
statements.
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
13
To
the
Board
of
Trustees
of
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
Shareholders
of
AZL
Balanced
Index
Strategy
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
schedule
of
portfolio
investments,
of
AZL
Balanced
Index
Strategy
Fund
(one
of
the
funds
constituting
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust,
referred
to
hereafter
as
the
"Fund")
as
of
December
31,
2023,
the
related
statement
of
operations
for
the
year
ended
December
31,
2023,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2023,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2023
by
correspondence
with
the
transfer
agent.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
/s/
PricewaterhouseCoopers
LLP
New
York,
New
York
February
22,
2024
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Allianz
Variable
Insurance
Products
complex
since
2018.
14
Other
Federal
Income
Tax
Information
(Unaudited)
For
the
year
ended
December
31,
2023,
41.32%
of
the
total
ordinary
income
dividends
paid
by
the
Fund
qualify
for
the
corporate
dividends
received
deductions
available
to
corporate
shareholders.
During
the
year
ended
December
31,
2023,
the
Fund
declared
net
long-term
capital
gain
distributions
of
$20,827,001.
15
Other
Information
(Unaudited)
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities
is
available,
without
charge,
upon
request,
by
visiting
the
Securities
and
Exchange
Commission’s
(‘‘Commission’’)
website
at
www.sec.gov,
or
by
calling
800-624-0197.
Information
regarding
how
the
Fund
voted
proxies
relating
to
portfolio
securities
during
the
most
recent
12-month
period
ended
June
30th
is
available
(i)
without
charge,
upon
request,
by
calling
800-624-0197;
(ii)
on
the
Trust’s
website
at
https://www.allianzlife.com;
and
(iii)
on
the
Commission’s
website
at
http://www.sec.gov
.
The
Fund
files
complete
Schedules
of
Portfolio
Holdings
with
the
Commission
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Schedules
of
Portfolio
Holdings
for
the
Fund
are
available
without
charge
on
the
Commission’s
website
at
http://www.sec.gov,
or
may
be
obtained
by
calling
800-624-0197.
16
Approval
of
Investment
Advisory
Agreement
(Unaudited)
Subject
to
the
general
supervision
of
the
Board
of
Trustees
(the
“Board”)
and
in
accordance
with
the
investment
objectives
and
restrictions
of
each
separate
series
(each
a
“Fund,”
together,
the
“Funds”)
of
the
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”),
investment
advisory
services
are
provided
to
the
Funds
by
Allianz
Investment
Management
LLC
(the
“Manager”).
The
Manager
manages
each
Fund
pursuant
to
an
investment
management
agreement
(the
“Management
Agreement”)
with
the
Trust
in
respect
of
each
such
Fund.
The
Management
Agreement
provides
that
the
Manager,
subject
to
the
supervision
and
approval
of
the
Board,
is
responsible
for
the
management
of
each
Fund.
For
management
services,
each
Fund
pays
the
Manager
an
investment
advisory
fee
based
upon
each
Fund’s
average
daily
net
assets.
The
Manager
has
contractually
agreed
to
limit
the
expenses
of
each
Fund
by
reimbursing
the
Fund
if
and
when
total
Fund
operating
expenses
exceed
certain
amounts
until
at
least
April
30,
2025
(the
“Expense
Limitation
Agreement”).
In
reviewing
the
services
provided
by
the
Manager
and
the
terms
of
the
Management
Agreement,
the
Board
receives
and
reviews
information
related
to
the
Manager’s
experience
and
expertise
in
the
variable
insurance
marketplace.
In
addition,
the
Board
receives
information
regarding
the
Manager’s
expertise
with
regard
to
portfolio
diversification
and
asset
allocation
requirements
within
variable
insurance
products
issued
by
Allianz
Life
Insurance
Company
of
North
America
(“Allianz
Life”)
and
its
subsidiary,
Allianz
Life
Insurance
Company
of
New
York
(“Allianz
of
New
York”).
Currently,
the
Funds
are
offered
only
through
Allianz
Life
and
Allianz
of
New
York
variable
products,
and
not
in
the
retail
fund
market.
As
required
by
the
Investment
Company
Act
of
1940
(the
“1940
Act”),
the
Board
has
reviewed
and
approved
the
Management
Agreement
with
the
Manager.
The
Board’s
decision
to
approve
this
contract
reflects
the
exercise
of
its
business
judgment
on
whether
to
approve
new
arrangements
and
continue
the
existing
arrangements.
During
its
review
of
the
contract,
the
Board
considered
many
factors,
among
the
most
material
of
which
are:
the
Fund’s
investment
objectives
and
long-term
performance;
the
Manager’s
management
philosophy,
personnel,
processes
and
investment
performance,
including
its
compliance
history
and
the
adequacy
of
its
compliance
processes;
the
preferences
and
expectations
of
Fund
shareholders
(and
underlying
contract
owners)
and
their
relative
sophistication;
the
continuing
state
of
competition
in
the
mutual
fund
industry;
and
comparable
fees
in
the
mutual
fund
industry.
The
Board
also
considered
the
compensation
and
benefits
received
by
the
Manager.
This
includes
fees
received
for
services
provided
to
a
Fund
by
employees
of
the
Manager
or
of
affiliates
of
the
Manager
and
research
services
received
by
the
Manager
from
brokers
that
execute
Fund
trades,
as
well
as
advisory
fees.
The
Board
considered
the
fact
that:
(1) the
Manager
and
the
Trust
are
parties
to
an
Administrative
Services
Agreement
and
a
Compliance
Services
Agreement,
under
which
the
Manager
is
compensated
by
the
Trust
for
performing
certain
administrative
and
compliance
services
including
providing
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer;
and
(2) Allianz
Life
Financial
Services,
LLC,
an
affiliated
person
of
the
Manager,
is
a
registered
securities
broker-dealer
and
received
(along
with
its
affiliated
persons)
payments
made
by
the
underlying
funds
pursuant
to
Rule 12b1.
The
Board
is
aware
that
various
courts
have
interpreted
provisions
of
the
1940
Act
and
have
indicated
in
their
decisions
that
the
following
factors
may
be
relevant
to
an
adviser’s
compensation:
the
nature,
extent
and
quality
of
the
services
provided
by
the
adviser,
including
the
performance
of
the
fund;
the
adviser’s
cost
of
providing
the
services;
the
extent
to
which
the
adviser
may
realize
“economies
of
scale”
as
the
fund
grows
larger;
any
indirect
benefits
that
may
accrue
to
the
adviser
and
its
affiliates
as
a
result
of
the
adviser’s
relationship
with
the
fund;
performance
and
expenses
of
comparable
funds;
the
profitability
of
acting
as
adviser
to
the
fund;
and
the
extent
to
which
the
independent
Board
members,
who
are
not
“interested
persons”
of
a
fund
as
defined
by
the
1940
Act
(“Independent
Trustees”),
are
fully
informed
about
all
facts
bearing
on
the
adviser’s
services
and
fees.
The
Board
is
aware
of
these
factors
and
takes
them
into
account
in
its
review
of
the
Management
Agreement
for
the
Funds.
Each
member
of
the
Board
considered
and
weighed
these
factors
in
light
of
his
or
her
experience
in
governing
the
Trust.
The
Board
is
assisted
in
its
deliberations
by
the
advice
of
independent
legal
counsel
to
the
Independent
Trustees
(“Independent
Trustee
Counsel”).
In
this
regard,
the
Board
requests
and
receives
a
significant
amount
of
information
about
the
Funds
and
the
Manager.
Some
of
this
information
is
provided
at
each
regular
meeting
of
the
Board;
additional
information
is
provided
in
connection
with
the
particular
meetings
at
which
the
Board’s
formal
review
of
the
Management
Agreement
occurs.
In
between
regularly
scheduled
meetings,
the
Board
may
receive
information
on
particular
matters
as
the
need
arises.
Thus,
the
Board’s
evaluation
of
the
Management
Agreement
is
informed
by
reports
covering
such
matters
as:
the
Manager’s
investment
philosophy,
personnel
and
processes,
and
the
Fund’s
investment
performance
(in
absolute
terms
as
well
as
in
relationship
to
its
benchmark
and
certain
competitor
or
“peer
group”
funds).
In
connection
with
comparing
the
performance
of
each
Fund
versus
its
benchmark,
the
Board
receives
reports
on
the
extent
to
which
the
Fund’s
performance
may
be
attributed
to
various
applicable
factors,
such
as
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
rebalancing
decisions,
and
the
impact
of
cash
positions
and
Fund
fees
and
expenses.
The
Board
also
receives
reports
on
the
Funds’
expenses
(including
the
advisory
fee
itself
and
the
overall
expense
structure
of
the
Funds,
both
in
absolute
terms
and
relative
to
peer
group
and/or
competing
funds,
with
due
regard
for
the
Expense
Limitation
Agreement
and
additional
voluntary
expense
limitations);
the
use
and
allocation
of
any
brokerage
commissions
derived
from
trading
the
Funds’
portfolio
securities;
the
nature,
extent
and
quality
of
the
advisory
and
other
services
provided
to
the
Fund
by
the
Manager
and
its
affiliates;
compliance
and
audit
reports
concerning
the
Funds
and
the
companies
that
service
them;
and
relevant
developments
in
the
mutual
fund
industry
and
how
the
Funds
and/or
the
Manager
are
responding
to
them.
The
Board
also
receives
financial
information
about
the
Manager,
including
reports
on
the
compensation
and
benefits
the
Manager
derives
from
its
relationships
with
the
Funds.
These
reports
cover
not
only
the
fees
under
the
Management
Agreement,
but
also
the
fees,
if
any,
received
for
providing
other
services
to
the
Funds.
The
reports
also
discuss
any
indirect
or
“fall-out”
benefits
the
Manager
or
its
affiliates
may
derive
from
their
relationships
with
the
Funds.
The
Management
Agreement
was
most
recently
considered
at
Board
meetings
held
in
the
summer
and
fall
of
2023.
Information
relevant
to
the
approval
of
the
Management
Agreement
was
considered
at
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
as
well
as
at
various
other
meetings
preceding
those
meetings.
Accordingly,
the
Management
Agreement
was
approved
by
the
Board
at
an
in-person
meeting
on
September
19,
2023.
At
such
meeting
the
Board
also
approved
the
Expense
Limitation
Agreement
between
the
Manager
and
the
Trust
for
the
period
ending
April 30,
2025.
In
connection
with
such
meetings,
the
Board
requested
and
evaluated
extensive
materials
from
the
Manager,
including
performance
and
expense
information
for
other
investment
companies
with
similar
investment
objectives
derived
from
data
compiled
by
an
independent
third-party
provider
and
other
sources
believed
to
be
reliable
by
the
Manager
and
the
Trustees.
Prior
to
voting,
the
Trustees
reviewed
the
proposed
approval
of
the
Management
Agreement
with
management
and
with
Independent
Trustee
Counsel
and
received
a
memorandum
from
such
counsel
discussing
the
legal
standards
for
their
consideration
of
the
proposed
approval.
The
Independent
Trustees
also
discussed
the
proposed
approval
in
private
sessions
with
Independent
Trustee
Counsel
at
which
no
representatives
of
the
Manager
were
present.
In
reaching
their
determinations
relating
to
the
approval
of
the
Management
Agreement,
in
respect
of
each
Fund,
each
member
of
the
Board
considered
all
factors
he
or
she
believed
relevant.
The
Board
based
its
decision
to
approve
17
the
Management
Agreement
on
the
totality
of
the
circumstances
and
relevant
factors,
and
with
a
view
to
past
and
future
long-term
considerations.
Not
all
of
the
factors
and
considerations
discussed
above
and
below
are
necessarily
relevant
to
every
Fund,
and
the
Board
did
not
assign
relative
weights
to
factors
discussed
herein
or
deem
any
one
or
group
of
them
to
be
controlling
in
and
of
themselves.
Shareholder
reports
must
include
a
discussion
of
certain
factors
relating
to
the
selection
of
the
investment
adviser
and
the
approval
of
the
advisory
fee.
The
“factors”
enumerated
by
the
SEC
are
set
forth
below
in
italics,
as
well
as
the
Board’s
conclusions
regarding
such
factors:
(1)
The
nature,
extent
and
quality
of
services
provided
by
the
Manager.
The
Trustees
noted
that
the
Manager,
subject
to
the
oversight
of
the
Board,
administers
each
Fund’s
business
and
other
affairs.
The
Trustees
noted
that
the
Manager
also
provides
the
Trust
and
each
Fund
with
such
administrative
and
other
services
(exclusive
of,
and
in
addition
to,
any
such
services
provided
by
any
other
service
providers
retained
by
the
Trust
on
behalf
of
the
Funds)
and
executive
and
other
personnel
as
are
necessary
for
the
operation
of
the
Trust
and
the
Funds.
Except
for
the
Trust’s
Chief
Compliance
Officer
and
certain
compliance
staff,
the
Manager
pays
all
of
the
compensation
of
Trustees
and
officers
of
the
Trust
who
are
employees
of
the
Manager
or
its
affiliates.
The
Board
considered
the
scope
and
quality
of
services
provided
by
the
Manager
and
noted
that
the
scope
of
the
services
provided
has
continued
to
expand
as
a
result
of
regulatory
and
other
developments.
The
Board
noted,
for
example,
that
the
Manager
is
responsible
for
maintaining
and
monitoring
its
own
compliance
program,
and
this
compliance
program
has
been
continuously
refined
and
enhanced
in
light
of
new
regulatory
requirements.
The
Board
considered
the
capabilities
and
resources
which
the
Manager
has
dedicated
to
performing
services
on
behalf
of
the
Trust
and
its
Funds.
The
quality
of
administrative
and
other
services,
including
the
Manager’s
role
in
coordinating
the
activities
of
the
Trust’s
other
service
providers,
also
were
considered.
The
Board
concluded
that,
overall,
they
were
satisfied
with
the
nature,
extent
and
quality
of
services
provided
(and
expected
to
be
provided)
to
the
Trust
and
to
each
of
the
Funds
under
the
Management
Agreement.
(2)
The
investment
performance
of
the
Funds
and
the
Manager.
In
connection
with
every
quarterly
Board
meeting
and
the
summer
and
fall
2023
contract
review
process,
Trustees
received
extensive
information
on
the
performance
results
of
each
Fund.
This
included,
for
example,
performance
information
on
absolute
total
return,
performance
versus
the
appropriate
benchmark(s)
and
performance
versus
peer
groups
as
reported
by
Lipper,
the
contribution
to
performance
of
the
Manager’s
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
and
the
impact
on
performance
of
rebalancing
decisions,
cash
and
Fund
fees.
This
included
Lipper
performance
information
on
the
Funds
for
the
previous
quarter,
and
previous
one-,
three-
and
five-year
periods,
to
the
extent
available.
For
example,
in
connection
with
the
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
the
Manager
reported
that,
for
the
five-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
reported
that
for
the
three-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
four
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
also
reported
on
the
performance
of
the
MVP
Funds
compared
to
custom
managed-volatility
peer
groups.
For
the
five-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
middle
20%
of
its
respective
custom
managed-volatility
peer
group.
For
the
three-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%
and
three
were
in
the
middle
20%
of
their
respective
custom
managed-volatility
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
bottom
40%
of
its
respective
custom
managed-volatility
peer
group.
The
Board
members
discussed
with
the
Manager
and
considered
the
impact
of
the
volatility
management
strategies
on
performance
in
different
market
environments,
where
applicable,
and
considered
whether
they
were
operating
as
intended.
The
Board
noted,
in
particular,
the
impact
on
longer-term
performance
of
certain
characteristics
of
the
Funds’
volatility
management
strategies
in
relation
to
volatility
experienced
as
a
result
of
the
COVID-19
pandemic,
and
that
relative
performance
had
improved
as
the
markets
stabilized.
At
the
Board
meeting
held
September
19,
2023,
the
Board
also
received
updated
performance
information
for
the
Funds,
including
updated
Lipper
peer
group
ranking
information,
for
various
periods
ending
June
30,
2023.
At
the
Board
meeting
held
September
19,
2023,
the
Trustees
determined
that
the
investment
performance
of
the
Funds
was
acceptable.
(3)
The
costs
of
services
to
be
provided
and
profits
to
be
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Funds.
The
Board
considered
that
the
Manager
receives
an
advisory
fee
from
each
of
the
Funds.
The
Manager
reported
that
for
the
four
MVP
Index
Strategy
Funds,
the
advisory
fee
paid
was
in
the
31st
percentile
of
the
customized
peer
group,
and
for
the
AZL
Balanced
Index
Strategy
Fund,
the
advisory
fee
paid
was
in
the
8th
percentile
of
the
customized
peer
group.
The
Manager
reported
that
for
the
AZL
DFA
Multi-Strategy
Fund,
the
advisory
fee
paid
was
in
the
6th
percentile.
The
Manager
reported
that
for
the
AZL
MVP
DFA
Multi-Strategy,
AZL
MVP
FIAM
Multi-Strategy,
and
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Funds,
the
advisory
fee
paid
was
in
the
1st
percentile.
(A
lower
percentile
reflects
lower
fund
fees
and
is
better
for
fund
shareholders.)
Trustees
were
provided
with
information
on
the
total
expense
ratios
of
the
Funds
and
other
funds
in
the
customized
peer
groups,
and
the
Manager
reported
upon
the
challenges
in
making
peer
group
comparisons
for
the
Funds.
The
Board
further
considered
and
found
that
the
advisory
fee
paid
to
the
Manager
with
respect
to
each
Fund
was
based
on
services
provided
to
the
Fund
that
were
in
addition
to,
rather
than
duplicative
of,
the
services
provided
pursuant
to
the
advisory
agreements
for
the
underlying
funds
in
which
the
Fund
invests.
The
Manager
provided
information
concerning
the
profitability
of
the
Manager’s
investment
advisory
activities
for
the
period
from
2020
through
2022.
The
Board
recognized
that
it
is
difficult
to
make
comparisons
of
profitability
from
investment
company
advisory
agreements
because
comparative
information
is
not
generally
publicly
available
and
is
affected
by
numerous
factors,
including
the
structure
of
the
particular
adviser,
the
types
of
funds
it
manages,
its
business
mix,
numerous
assumptions
regarding
allocation
of
expenses
and
the
adviser’s
capital
structure
and
cost
of
capital.
In
considering
profitability
information,
the
Board
considered
the
possible
effect
of
certain
fall-out
benefits
to
the
Manager
and
its
affiliates.
The
Board
focused
on
profitability
of
the
Manager’s
relationships
with
the
Funds
before
taxes
and
distribution
expenses.
The
Board
recognized
that
the
Manager
should
earn
a
reasonable
level
of
profits
for
the
services
it
provides
to
each
Fund.
(4)
and
(5)
The
extent
to
which
economies
of
scale
would
be
realized
as
the
Funds
grow,
and
whether
fee
levels
reflect
these
economies
of
scale.
The
Board
noted
that
the
advisory
fee
schedules
for
the
Funds
do
not
contain
breakpoints
that
reduce
the
fee
rate
on
assets
above
specified
levels.
The
Board
recognized
that
breakpoints
may
be
an
appropriate
way
for
the
Manager
to
share
its
economies
of
scale,
if
any,
with
Funds
that
have
substantial
assets.
The
Board
found
there
was
no
uniform
methodology
for
establishing
breakpoints
that
give
effect
to
Fund-specific
services
provided
by
the
Manager.
The
Board
noted
that
in
the
fund
industry
as
a
whole,
as
well
as
among
funds
similar
to
the
Funds,
there
is
no
uniformity
or
pattern
in
the
fees
and
asset
levels
at
which
breakpoints
(if
any)
apply.
Depending
on
the
age,
size,
and
other
characteristics
of
a
particular
fund
and
its
manager’s
cost
structure,
different
conclusions
can
be
drawn
as
to
whether
there
are
economies
of
scale
to
be
realized
at
any
particular
level
of
assets,
notwithstanding
the
intuitive
conclusion
that
such
economies
exist,
or
will
be
realized
at
some
level
of
total
assets.
Moreover,
because
different
managers
have
different
cost
structures
and
service
models,
it
is
difficult
to
draw
meaningful
18
conclusions
from
the
breakpoints
that
may
have
been
adopted
by
other
funds.
The
Board
also
noted
that
the
advisory
agreements
for
many
funds
do
not
have
breakpoints
at
all,
or
if
breakpoints
exist,
they
may
be
at
asset
levels
significantly
greater
than
those
of
the
individual
Funds.
The
Board
noted
that
the
total
assets
in
all
of
the
Funds,
as
of
June
30,
2023,
were
approximately
$7.8 billion
and
that
the
largest
Fund,
the
AZL
MVP
Growth
Index
Strategy
Fund,
had
assets
of
approximately
$2.0 billion.
The
Board
noted
that
the
Manager
has
agreed
to
temporarily
limit
Fund
expenses
under
the
Expense
Limitation
Agreement,
which
has
the
effect
of
reducing
expenses
similar
to
implementation
of
advisory
fee
breakpoints.
The
Manager
has
committed
to
continue
to
consider
the
continuation
of
expense
limits
and/or
advisory
fee
breakpoints
as
Fund
assets
change.
The
Board
receives
quarterly
reports
on
the
level
of
Fund
assets.
The
Board
expects
to
continue
to
consider:
(a) the
extent
to
which
economies
of
scale
have
been
realized,
and
(b) whether
the
advisory
fee
should
be
modified,
either
in
connection
with
the
next
renewal
of
the
Management
Agreement
or
by
modifying
the
Expense
Limitation
Agreement,
to
reflect
such
economies
of
scale,
if
any.
Having
taken
these
factors
into
account,
the
Board
concluded
that
the
absence
of
breakpoints
in
the
Funds’
advisory
fee
rate
schedules
was
acceptable
under
each
Fund’s
circumstances.
In
conclusion,
after
full
consideration
of
the
above
factors,
as
well
as
such
other
factors
as
each
member
of
the
Board
considered
instructive
in
evaluating
the
Management
Agreement,
the
Board
concluded
that
the
advisory
fees
were
reasonable,
and
that
the
continuation
of
the
Management
Agreement
was
in
the
best
interest
of
the
Funds.
19
Information
about
the
Board
of
Trustees
and
Officers
(Unaudited)
The
Trust
is
managed
by
the
Trustees
in
accordance
with
the
laws
of
the
state
of
Delaware
governing
business
trusts.
In
addition
to
serving
on
the
Board
of
Trustees
of
the
Trust,
each
Trustee
serves
on
the
Board
of
the
Allianz
Variable
Insurance
Products
Trust
(“VIP
Trust”)
and
the
AIM
ETF
Products
Trust
(“ETF
Trust”)
(collectively,
the
Trust,
the
VIP
Trust,
and
ETF
Trust
are
the
“AIM
Complex”).
There
are
currently
six
Trustees,
one
of
whom
is
an
“interested
person”
of
the
Trust
within
the
meaning
of
that
term
under
the
1940
Act.
The
Trustees
and
Officers
of
the
Trust,
their
addresses,
years
of
birth,
their
positions
held
with
the
Trust,
their
terms
of
office
with
the
Trust
and
length
of
time
served,
their
principal
occupation(s)
during
the
past
five
years,
the
number
of
portfolios
in
the
Trust
they
oversee,
and
their
other
directorships
held
during
the
past
five
years
are
as
follows:
Independent
Trustees
(
1)
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Peggy
L.
Ettestad
(1957)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Lead
Independent
Trustee
Since
10/14
(Trustee
since
2/07)
Managing
Director,
Red
Canoe
Management
Consulting
LLC,
2008
to
present
56
None
Tamara
Lynn
Fagely
(1958)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Chief
Operations
Officer,
Hartford
Funds,
2012
to
2013
56
Diamond
Hill
Funds
(10
Funds)
Richard
H.
Forde
(1953)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Member
of
the
Board
and
Chairman
of
the
Finance
and
Investment
Committee,
Connecticut
Water
Service,
Inc.,
2013
to
2019
56
Connecticut
Water
Service,
Inc.
Jack
Gee
(1959)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
01/22
Retired;
previously,
Managing
Director,
BlackRock,
Inc.,
Treasurer
and
Chief
Financial
Officer
U.S.
iShares,
2004
to
2019
56
TCW
ETF
Trust
(3
Funds);
Esoterica
Thematic
Trust
(2019
-
2020)
Claire
R.
Leonardi
(1955)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
02/04
Retired;
previously,
CEO,
Health
eSense
Inc.
(a
medical
device
company),
2015
to
2018,
and
Connecticut
Innovations,
Inc.
(a
venture
capital
firm),
2012
to
2015
56
None
20
Interested
Trustee
(
3)
(1)
Each
of
the
Independent
Trustees
is
a
member
of
the
Audit
and
Operational
Risk
Oversight
Committee.
(2)
Indefinite.
(3)
Is
an
“interested
person,”
as
defined
by
the
1940
Act,
due
to
employment
by
Allianz
Life
and
the
Manager.
Officers
(1)
Indefinite.
(2)
The
Manager
and
the
Trust
are
parties
to
a
Compliance
Services
Agreement
under
which
the
Manager
provides
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer.
The
Fund’s
Statement
of
Additional
Information
(“SAI”)
contains
additional
information
about
the
Trust’s
Trustees
and
Officers.
The
SAI
is
available
without
charge,
upon
request,
by
calling
toll-free
800-624-0197
or
at
https://www.allianzlife.com.
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
06/11
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
56
None
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(1)
/
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
President
Since
11/10
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
Amanda
Farren
(1978)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Secretary
Since
02/24
Chief
Legal
Officer,
Allianz
Investment
Management
LLC;
Senior
Counsel,
Allianz
Life,
January
2024
to
present;
Senior
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2023;
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2015
-2023
Bashir
C.
Asad
(1963)
Citi
Fund
Services
Ohio,
Inc.
4400
Easton
Commons,
Suite
200
Columbus,
OH
43219
Treasurer,
Principal
Accounting
Officer
and
Principal
Financial
Officer
Since
06/16
Senior
Vice
President,
Citi
Fund
Services
Ohio,
Inc.,
2011
to
present
Chris
R.
Pheiffer
(1968)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Chief
Compliance
Officer
(2)
and
Anti-Money
Laundering
Compliance
Officer
Since
02/14
Chief
Compliance
Officer
of
the
Trust
and
the
VIP
Trust,
2014
to
present,
and
the
ETF
Trust,
2020
to
present
Michael
Tanski
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
04/09
Assistant
Vice
President,
Allianz
Investment
Management
LLC,
2013
to
present.
Laura
Quade
(1969)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
08/23
Vice
President,
Allianz
Investment
Management
LLC,
2023
to
present,
previously
Director
at
Wealth
Enhancement
Group,
November
2019
to
November
2022;
Vice
President,
Head
of
Operations
at
Hartford
Funds
2014
to
2019
ANNRPT1223
02/24
The
Allianz
VIP
Fund
of
Funds
are
distributed
by
Allianz
Life
Financial
Services,
LLC.
These
Funds
are
not
FDIC
Insured.
AZL®
DFA
Multi-Strategy
Fund
Annual
Report
December
31,
2023
Table
of
Contents
AZL®
DFA
Multi-Strategy
Fund
Management
Discussion
and
Analysis
Page
1
Expense
Examples
and
Portfolio
Composition
Page
3
Schedule
of
Portfolio
Investments
Page
4
Statement
of
Assets
and
Liabilities
Page
5
Statement
of
Operations
Page
5
Statements
of
Changes
in
Net
Assets
Page
6
Financial
Highlights
Page
7
Notes
to
the
Financial
Statements
Page
8
Report
of
Independent
Registered
Public
Accounting
Firm
Page
13
Other
Federal
Income
Tax
Information
Page
14
Other
Information
Page
15
Approval
of
Investment
Advisory
Agreement
Page
16
Information
about
the
Board
of
Trustees
and
Officers
Page
19
This
report
is
submitted
for
the
general
information
of
the
shareholder
of
the
Fund.
The
report
is
not
authorized
for
distribution
to
prospective
investors
in
the
Fund
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
contains
details
concerning
the
sales
charges
and
other
pertinent
information.
1
AZL®
DFA
Multi-Strategy
Fund
Review
(Unaudited)
Allianz
Investment
Management
LLC
serves
as
the
Manager
for
the
AZL®
DFA
Multi-
Strategy
Fund.
What
factors
affected
the
Fund’s
performance
during
the
year
ended
December
31,
2023?*
For
the
year
ended
December
31,
2023,
the
AZL
DFA
Multi-
Strategy
Fund
(the
“Fund”)
returned
13.22%.
That
compared
to
26.29%,
5.53%
and
17.71%
total
return
for
its
benchmarks,
the
S&P
500
Index,
the
Bloomberg
U.S.
Aggregate
Bond
Index,
and
the
Moderate
Composite
Index,
respectively.
1
The
Fund
is
a
fund
of
funds
that
pursues
broad
diversification
across
three
equity
sub-portfolios
subadvised
by
Dimensional
Fund
Advisors
and
one
fixed
income
sub-portfolio
subadvised
by
Blackrock
Financial
Management.
Generally,
the
Fund
allocates
50%
to
70%
of
its
assets
to
the
underlying
equity
funds
and
between
30%
and
50%
to
the
underlying
fixed-income
fund.
U.S.
equities
generally
had
positive
performance
in
2023,
due
in
part
to
falling
inflation,
better-than-expected
company
earnings,
and
resilient
consumer
demand.
While
large-cap
stocks
led
the
way,
small-cap
and
mid-cap
stock
indexes
also
ended
the
year
with
double-digit
gains.
The
European
Central
Bank’s
(ECB)
monetary
tightening
weighed
on
Eurozone
equities,
while
Russia’s
continued
war
with
Ukraine
weighed
on
international
equities.
Despite
these
economic
headwinds,
international
developed
market
equities
returned
double-digit
gains
for
the
year.
The
U.S.
fixed
income
market
received
a
boost
after
the
Federal
Reserve
indicated
it
could
be
near
the
end
of
its
cycle
of
interest
rate
hikes.
Most
sectors
of
the
bond
market
finished
with
positive
performance
in
2023,
led
by
high
yield
bonds
that
posted
double-digit
returns.
The
Fund,
which
invests
in
both
U.S.
and
international
markets,
underperformed
its
blended
benchmark
during
the
year
ended
December
31,
2023.
Its
off-benchmark
allocation
to
developed
market
non-U.S.
equities
slightly
detracted
from
relative
performance,
as
these
underperformed
U.S.
equities.
The
Fund’s
off-benchmark
allocation
to
mid-cap
and
small-cap
U.S.
equities
also
slightly
detracted
from
relative
performance,
as
these
underperformed
the
S&P
500
Index.
Past
performance
does
not
guarantee
future
results.
*
The
Fund’s
portfolio
composition
is
subject
to
change.
There
is
no
guarantee
that
any
sectors
mentioned
will
continue
to
perform
as
described
or
that
securities
in
such
sectors
will
be
held
by
the
Fund
in
the
future.
The
information
contained
in
this
commentary
is
for
informational
purposes
only
and
should
not
be
construed
as
a
recommendation
to
purchase
or
sell
securities
in
the
sector
mentioned.
The
Fund’s
holdings
and
weightings
are
as
of
December
31,
2023.
1
For
a
complete
description
of
the
Fund’s
performance
benchmark
please
refer
to
page
2
of
this
report.
2
AZL®
DFA
Multi-Strategy
Fund
Review
(Unaudited)
Fund
Objective
The
Fund’s
investment
objective
is
to
seek
long-term
capital
appreciation.
This
objective
may
be
changed
by
the
Trustees
of
the
Fund
without
shareholder
approval.
The
Fund
seeks
to
achieve
its
objective
by
investing
in
a
combination
of
underlying
funds
that
represent
different
classes
in
the
Fund’s
asset
allocation.
Investment
Concerns
The
Fund
invests
in
underlying
funds,
so
its
investment
performance
is
directly
related
to
the
performance
of
those
underlying
funds.
Before
investing,
investors
should
assess
the
risks
associated
with
and
types
of
investments
made
by
each
of
the
underlying
funds
in
which
the
Fund
invests.
Stocks
are
more
volatile
and
carry
more
risk
and
return
potential
than
other
forms
of
investments.
Small-
to
mid-capitalization
companies
typically
have
a
higher
risk
of
failure
and
historically
have
experienced
a
greater
degree
of
volatility.
International
investing
may
involve
risk
of
capital
loss
from
unfavorable
fluctuations
in
currency
values,
from
differences
in
generally
accepted
accounting
principles
or
from
economic
or
political
instability
in
other
nations.
Value-based
investments
are
subject
to
the
risk
that
the
broad
market
may
not
recognize
their
intrinsic
value.
Investing
in
a
single
industry
or
sector,
or
concentrating
investments
in
a
limited
number
of
industries
or
sectors,
tends
to
increase
the
risk
that
economic,
political,
or
regulatory
developments
affecting
certain
industries
or
sectors
will
have
a
large
impact
on
the
value
of
the
portfolio.
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
Mortgage-backed
investments
involve
risk
of
loss
due
to
prepayments
and,
like
any
bond,
due
to
default.
Because
of
the
sensitivity
of
mortgage-related
securities
to
changes
in
interest
rates,
an
underlying
fund's
performance
may
be
more
volatile
than
if
it
did
not
hold
these
securities.
Investing
in
derivative
instruments
involves
risks
that
may
be
different
from
or
greater
than
the
risk
associated
with
investing
directly
in
securities
or
other
traditional
instruments.
For
a
complete
description
of
these
and
other
risks
associated
with
investing
in
the
Fund,
please
refer
to
the
Fund’s
prospectus.
Growth
of
$10,000
Investment
The
chart
above
represents
a
comparison
of
a
hypothetical
investment
in
the
Fund
versus
a
similar
investment
in
the
Fund’s
benchmarks
and
represents
the
reinvestment
of
dividends
and
capital
gains
in
the
Fund.
Past
performance
does
not
guarantee
future
results.
The
performance
data
quoted
represents
past
performance
and
current
returns
may
be
lower
or
higher.
The
investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
the
original
cost.
To
obtain
performance
information
current
to
the
most
recent
month
end,
please
visit
www.Allianzlife.com.
The
above
expense
ratio
is
based
on
the
current
Fund
prospectus
dated
May
1,
2023.
The
Manager
and
the
Fund
have
entered
into
a
written
agreement
limiting
operating
expenses,
excluding
certain
expenses
(such
as
interest
expense
and
acquired
fund
fees
and
expenses),
to
0.20%
through
April
30,
2025.
Additional
information
pertaining
to
the
December
31,
2023
expense
ratio
can
be
found
in
the
Financial
Highlights.
Acquired
fund
fees
and
expenses
are
incurred
indirectly
by
the
Fund
through
the
valuation
of
the
Fund’s
investments
in
the
permitted
Underlying
Funds.
Accordingly,
acquired
fund
fees
and
expenses
affect
the
Fund’s
total
returns.
Because
these
fees
and
expenses
are
not
included
in
the
Fund’s
financial
highlights,
the
Fund’s
total
annual
fund
operating
expenses,
as
shown
in
the
current
prospectus,
do
not
correlate
to
the
ratios
of
expenses
to
average
net
assets
shown
in
the
Financial
Highlights.
Without
acquired
fund
fees
and
expenses
the
Fund’s
gross
expense
ratio
would
be
0.08%.
The
total
return
of
the
Fund
does
not
reflect
the
effect
of
any
insurance
charges,
the
annual
maintenance
fee
or
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Such
charges,
fees
and
tax
payments
would
reduce
the
performance
quoted.
The
Fund’s
performance
is
measured
against
the
Standard
&
Poor’s
500
Index
(“S&P
500”),
the
Bloomberg
U.S.
Aggregate
Bond
Index
and
the
Moderate
Composite
Index
(“Composite”).
The
S&P
500
is
representative
of
500
selected
common
stocks,
most
of
which
are
listed
on
the
New
York
Stock
Exchange,
and
is
a
measure
of
the
U.S.
Stock
market
as
a
whole.
The
Bloomberg
U.S.
Aggregate
Bond
Index
is
a
market
value-weighted
performance
benchmark
for
investment-grade
fixed-rate
debt
issues,
including
government,
corporate,
asset-backed,
and
mortgage-backed
securities,
with
maturities
of
at
least
one
year.
The
Composite
is
a
blended
index
comprised
of
(60%)
S&P
500
and
(40%)
Bloomberg
U.S.
Aggregate
Bond
Index.
These
indexes
are
unmanaged
and
do
not
reflect
the
deduction
of
fees
associated
with
a
mutual
fund,
such
as
investment
management
and
fund
accounting
fees.
The
Fund’s
performance
reflects
the
deduction
of
fees
for
services
provided
to
the
Fund.
Investors
cannot
invest
directly
in
an
index.
Average
Annual
Total
Returns
as
of
December
31,
2023
1
Year
3
Years
5
Years
10
Years
AZL
®
DFA
Multi-Strategy
Fund
13.22%
4.51%
8.04%
6.09%
Bloomberg
U.S.
Aggregate
Bond
Index
5.53%
(3.31)%
1.10%
1.81%
Moderate
Composite
Index
17.71%
4.70%
10.09%
8.14%
S&P
500
Index
26.29%
10.00%
15.69%
12.03%
Expense
Ratio
Gross
AZL
®
DFA
Multi-Strategy
Fund
0.85%
AZL
DFA
Multi-Strategy
Fund
3
Expense
Examples
(Unaudited)
As
a
shareholder
of
the
AZL
DFA
Multi-Strategy
Fund
(the
“Fund”),
you
incur
ongoing
costs,
including
management
fees,
distribution
fees,
and
other
Fund
expenses.
These
examples
are
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
Please
note
that
the
expenses
shown
in
each
table
do
not
reflect
expenses
that
apply
to
the
subaccount
or
the
insurance
contract.
If
the
expenses
that
apply
to
the
subaccount
or
the
insurance
contract
were
included,
your
costs
would
have
been
higher.
These
examples
are
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
periods
presented
below.
The
Actual
Expense
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
below,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
table
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
this
period.
The
Hypothetical
Expense
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
DFA
Multi-Strategy
Fund
$1,000.00
$1,058.80
$0.42
0.08%
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
DFA
Multi-Strategy
Fund
$1,000.00
$1,024.80
$0.41
0.08%
*
Expenses
are
equal
to
the
average
account
value
multiplied
by
the
Fund's
annualized
expense
ratio
multiplied
by
184/365
(the
number
of
days
in
the
most
recent
fiscal
half-year
divided
by
the
number
of
days
in
the
fiscal
year).
Portfolio
Composition
(Unaudited)
Investments
Percent
of
Net
Assets
Domestic
Equity
Funds
48
.2
%
Fixed
Income
Fund
39
.6
International
Equity
Fund
12
.3
Total
Investment
Securities
100
.1
Net
other
assets
(liabilities)
(
0
.1
)
Net
Assets
100
.0
%
AZL
DFA
Multi-Strategy
Fund
Schedule
of
Portfolio
Investments
December
31,
2023
4
See
accompanying
notes
to
the
financial
statements.
Percentages
indicated
are
based
on
net
assets
as
of
December
31,
2023
.
Shares
Value
Affiliated
Investment
Companies
(
100
.1
%
):
Domestic
Equity
Funds
(
48
.2
%
):
19,324,100
AZL
DFA
U.S.
Core
Equity
Fund
$
274,015,735
7,093,658
AZL
DFA
U.S.
Small
Cap
Fund
72,497,188
346,512,923
1
Fixed
Income
Fund
(
39
.6
%
):
28,973,792
AZL
Enhanced
Bond
Index
Fund
284,522,638
Shares
Value
Affiliated
Investment
Companies,
continued
International
Equity
Fund
(
12
.3
%
):
8,554,084
AZL
DFA
International
Core
Equity
Fund
$
87,850,444
Total
Affiliated
Investment
Companies
(Cost
$616,988,993)
718,886,005
Total
Investment
Securities
(Cost
$616,988,993)
—
100.1%(a)
718,886,005
Net
other
assets
(liabilities)
—
(0.1)%
(
370,732
)
Net
Assets
—
100.0%
$
718,515,273
(a)
See
Federal
Tax
Information
listed
in
the
Notes
to
the
Financial
Statements.
AZL
DFA
Multi-Strategy
Fund
5
See
accompanying
notes
to
the
financial
statements.
Statement
of
Assets
and
Liabilities
December
31,
2023
Statement
of
Operations
For
the
Year
Ended
December
31,
2023
Assets:
Investments
in
affiliates,
at
cost
$
616,988,993
Investments
in
affiliates,
at
value
$
718,886,005
Receivable
for
affiliated
investments
sold
240,099
Prepaid
expenses
3,162
Total
Assets
719,129,266
Liabilities:
Cash
overdraft
240,099
Payable
for
capital
shares
redeemed
315,418
Management
fees
payable
30,050
Administration
fees
payable
7,543
Custodian
fees
payable
3,671
Administrative
and
compliance
services
fees
payable
886
Transfer
agent
fees
payable
766
Trustee
fees
payable
3,678
Other
accrued
liabilities
11,882
Total
Liabilities
613,993
Commitments
and
contingent
liabilities^
Net
Assets
$
718,515,273
Net
Assets
Consist
of:
Paid
in
capital
$
642,538,373
Total
distributable
earnings
75,976,900
Net
Assets
$
718,515,273
Shares
of
beneficial
interest
(unlimited
number
of
shares
authorized,
no
par
value)
59,753,966
Net
Asset
Value
(offering
and
redemption
price
per
share)
$
12.02
^
See
Note
3
in
Notes
to
the
Financial
Statements.
Investment
Income:
Dividends
from
affiliates
$
9,942,553
Dividends
from
non-affiliates
229
Total
Investment
Income
9,942,782
Expenses:
Management
fees
356,643
Administration
fees
78,569
Custodian
fees
20,711
Administrative
and
compliance
services
fees
9,710
Transfer
agent
fees
7,519
Trustee
fees
39,575
Professional
fees
38,031
Shareholder
reports
8,307
Other
expenses
14,092
Total
expenses
573,157
Net
Investment
Income/(Loss)
9,369,625
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments:
Net
realized
gains/(losses)
on
affiliated
underlying
funds
(45,099,978)
Net
realized
gains
distributions
from
affiliated
underlying
funds
15,402,933
Change
in
net
unrealized
appreciation/depreciation
on
affiliated
underlying
funds
109,232,505
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments
79,535,460
Change
in
Net
Assets
Resulting
From
Operations
$
88,905,085
AZL
DFA
Multi-Strategy
Fund
6
See
accompanying
notes
to
the
financial
statements.
Statements
of
Changes
in
Net
Assets
For
the
Year
Ended
December
31,
2023
For
the
Year
Ended
December
31,
2022
Change
In
Net
Assets:
Operations:
Net
investment
income/(loss)
$
9,369,625
$
17,025,463
Net
realized
gains/(losses)
on
investments
(
29,697,045
)
62,057,323
Change
in
unrealized
appreciation/depreciation
on
investments
109,232,505
(
183,469,466
)
Change
in
net
assets
resulting
from
operations
88,905,085
(
104,386,680
)
Distributions
to
Shareholders:
Distributions
(
82,785,004
)
(
82,510,932
)
Change
in
net
assets
resulting
from
distributions
to
shareholders
(
82,785,004
)
(
82,510,932
)
Capital
Transactions:
Proceeds
from
shares
issued
1,804,943
589,750
Proceeds
from
dividends
reinvested
82,785,004
82,510,932
Value
of
shares
redeemed
(
95,508,526
)
(
110,533,399
)
Change
in
net
assets
resulting
from
capital
transactions
(
10,918,579
)
(
27,432,717
)
Change
in
net
assets
(
4,798,498
)
(
214,330,329
)
Net
Assets:
Beginning
of
period
723,313,771
937,644,100
End
of
period
$
718,515,273
$
723,313,771
Share
Transactions:
Shares
issued
158,191
45,986
Dividends
reinvested
7,658,187
7,022,207
Shares
redeemed
(
7,761,226
)
(
8,112,112
)
Change
in
shares
55,152
(
1,043,919
)
AZL
DFA
Multi-Strategy
Fund
Financial
Highlights
(Selected
data
for
a
share
of
beneficial
interest
outstanding
throughout
the
periods
indicated.
Does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.)
7
See
accompanying
notes
to
the
financial
statements.
Year
Ended
December
31,
2023
Year
Ended
December
31,
2022
Year
Ended
December
31,
2021
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Net
Asset
Value,
Beginning
of
Period
$12.12
$15.44
$14.52
$14.36
$12.99
Investment
Activities:
Net
Investment
Income/(Loss)(a)
0.16
0.29
0.08
0.22
0.38
Net
Realized
and
Unrealized
Gains/(Losses)
on
Investments
1.27
(2.10
)
1.89
1.20
1.73
Total
from
Investment
Activities
1.43
(1.81
)
1.97
1.42
2.11
Distributions
to
Shareholders
From:
Net
Investment
Income
(0.37
)
(0.16
)
(0.25
)
(0.45
)
(0.16
)
Net
Realized
Gains
(1.16
)
(1.35
)
(0.80
)
(0.81
)
(0.58
)
Total
Dividends
(1.53
)
(1.51
)
(1.05
)
(1.26
)
(0.74
)
Net
Asset
Value,
End
of
Period
$12.02
$12.12
$15.44
$14.52
$14.36
Total
Return
(b)
13.22
%
(11.41
)%
13.81
%
10.64
%
16.57
%
Ratios
to
Average
Net
Assets/Supplemental
Data:
Net
Assets,
End
of
Period
(000's)
$718,515
$723,314
$937,644
$940,773
$983,277
Net
Investment
Income/(Loss)
1.31
%
2.14
%
0.50
%
1.60
%
2.74
%
Expenses
Before
Reductions*(c)
0.08
%
0.08
%
0.07
%
0.08
%
0.07
%
Expenses
Net
of
Reductions*
0.08
%
0.08
%
0.07
%
0.08
%
0.07
%
Portfolio
Turnover
Rate
44
%
10
%
6
%
18
%
6
%
*
The
expense
ratios
exclude
the
impact
of
fees/expenses
paid
by
each
underlying
fund.
(a)
Calculated
using
the
average
shares
method.
(b)
The
returns
include
reinvested
dividends
and
fund
level
expenses,
but
exclude
insurance
contract
charges. If
these
charges
were
included,
the
returns
would
have
been
lower.
(c)
Excludes
fee
reductions. If
such
fee
reductions
had
not
occurred,
the
ratios
would
have
been
as
indicated.
AZL
DFA
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
8
1.
Organization
The
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”)
was
organized
as
a
Delaware
statutory
trust
on
June
16,
2004.
The
Trust
is
an
open-end
management
investment
company
registered
under
the
Investment
Company
Act
of
1940,
as
amended,
(the
“1940
Act”)
and
thus
is
determined
to
be
an
investment
company,
and
follows
the
investment
company
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946
“Financial
Services—Investment
Companies”.
The
Trust
consists
of 9
separate
investment
portfolios
(collectively,
the
“Funds”),
of
which
one
is
included
in
this
report,
the
AZL
DFA
Multi-Strategy
Fund (the
“Fund”),
and 8
are
presented
in
separate
reports.
The
Fund
is
a
diversified
series
of
the
Trust.
The
Fund
is
a
“fund
of
funds”,
which
means
that
the
Fund
invests
primarily
in
other
mutual
funds
(the
"Underlying
Funds").
Underlying
Funds
invest
in
stocks,
bonds,
and
other
securities
and
reflect
varying
amounts
of
potential
investment
risk
and
reward.
The
Underlying
Funds
record
their
investments
at
fair
value.
Periodically,
the
Fund
will
adjust
its
asset
allocation
as
it
seeks
to
achieve
its
investment
objective.
The
Trust
is
authorized
to
issue
an
unlimited
number
of
shares
of
the
Fund
without
par
value.
Shares
of
the
Fund
are
available
through
the
variable
annuity
contracts
offered
through
the
separate
accounts
of
participating
insurance
companies.
Currently,
the
Fund
only
offers
its
shares
to
separate
accounts
of
Allianz
Life
Insurance
Company
of
North
America
and
Allianz
Life
Insurance
Company
of
New
York,
affiliates
of
the
Trust
and
the
Manager,
as
defined
below.
Under
the
Trust’s
organizational
documents,
its
officers
and
trustees
are
indemnified
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
In
addition,
in
the
normal
course
of
business,
the
Fund
may
enter
into
contracts
with
its
vendors
and
others
that
provide
for
general
indemnifications.
The
Fund’s
maximum
exposure
under
these
arrangements
is
unknown,
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund.
However,
based
on
experience,
the
Fund
expects
that
risk
of
loss
to
be
remote.
2.
Significant
Accounting
Policies
The
following
is
a
summary
of
significant
accounting
policies
followed
by
the
Fund
in
the
preparation
of
its
financial
statements.
The
policies
conform
with
U.S.
generally
accepted
accounting
principles
(“U.S.
GAAP”).
The
preparation
of
financial
statements
requires
management
to
make
certain
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
and
disclosure
of
contingent
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
Security
Valuation
The
Fund
records
its
investments
at
fair
value.
Fair
value
is
defined
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
willing
market
participants
at
the
measurement
date.
The
valuation
techniques
used
to
determine
fair
value
are
further
described
in
Note
4
below.
Investment
Transactions
and
Investment
Income
Investment
transactions
are
accounted
for
on
trade
date.
Net
realized
gains
and
losses
on
investments
sold
and
on
foreign
currency
transactions
are
recorded
on
the
basis
of
identified
cost.
Interest
income
is
recorded
on
the
accrual
basis
and
includes,
where
applicable,
the
amortization
of
premiums
or
accretion
of
discounts.
Dividend
income
is
recorded
on
the
ex-
dividend
date
except
in
the
case
of
foreign
securities,
in
which
case
dividends
are
recorded
as
soon
as
such
information
becomes
available.
Distributions
to
Shareholders
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
The
Fund
distributes
its
dividends
from
net
investment
income
and
net
realized
capital
gains,
if
any,
on
an
annual
basis.
The
amount
of
distributions
from
net
investment
income
and
from
net
realized
gains
is
determined
in
accordance
with
federal
income
tax
regulations,
which
may
differ
from
U.S.
GAAP.
These
“book/tax”
differences
are
either
temporary
or
permanent
in
nature.
To
the
extent
these
differences
are
permanent
in
nature
(e.g.,
return
of
capital,
net
operating
loss,
reclassification
of
certain
market
discounts,
gain/loss,
paydowns,
and
distributions),
such
amounts
are
reclassified
within
the
composition
of
net
assets
based
on
their
federal
tax-basis
treatment;
temporary
differences
(e.g.,
wash
sales
and
differing
treatment
on
certain
investments)
do
not
require
reclassification.
Distributions
to
shareholders
that
exceed
net
investment
income
and
net
realized
gains
for
tax
purposes
are
reported
as
distributions
of
capital.
Expense
Allocation
Expenses
directly
attributable
to
the
Fund
are
charged
directly
to
the
Fund,
while
expenses
attributable
to
more
than
one
Fund
are
allocated
among
the
respective
Funds
based
upon
relative
net
assets
or
some
other
reasonable
method.
Expenses
which
are
attributable
to
more
than
one
Trust
are
allocated
across
the
Allianz
Variable
Insurance
Products
Trust,
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
AIM
ETF
Products
Trust
based
upon
relative
net
assets
or
another
reasonable
basis.
Allianz
Investment
Management
LLC
(the
“Manager”),
serves
as
the
investment
manager
for
the
Trust,
Allianz
Variable
Insurance
Products
Trust
and
AIM
ETF
Products
Trust.
This
report
does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.
Affiliated
Securities
Transactions
Pursuant
to
Rule
17a-7
under
the
1940
Act,
the
Fund
may
engage
in
securities
transactions
with
affiliated
investment
companies
and
advisory
accounts
managed
by
the
Manager.
Any
such
purchase
or
sale
transaction
must
be
effected
without
a
brokerage
commission
or
other
remuneration,
except
for
customary
transfer
fees.
The
transaction
must
be
effected
at
the
current
market
price,
which
is
either
the
security’s
last
sale
price
on
an
exchange
or,
if
there
are
no
transactions
in
the
security
that
day,
at
the
average
of
the
highest
bid
and
lowest
asked
price.
During
the
year
ended
December
31,
2023,
the
Fund
did
not
engage
in
any
Rule
17a-7
transactions.
AZL
DFA
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
9
3.
Fees
and
Transactions
with
Affiliates
and
Other
Parties
The
Manager
provides
investment
advisory
and
management
services
for
the
Fund.
The
Manager
has
contractually
agreed
to
waive
fees
and
reimburse
the
Fund
to
limit
the
annual
expenses,
excluding
interest
expense
(e.g.,
cash
overdraft
fees),
taxes,
brokerage
commissions,
acquired
fund
fees
and
expenses,
other
expenditures
that
are
capitalized
in
accordance
with
U.S.
GAAP
and
other
extraordinary
expenses
not
incurred
in
the
ordinary
course
of
the
Fund’s
business,
based
on
the
daily
net
assets
of
the
Fund,
through
April
30,
2025.
Expenses
incurred
for
investment
advisory
and
management
services
are
reflected
on
the
Statement
of
Operations
as
“Management
fees.”
For
the
year
ended
December
31,
2023,
the
annual
rate
due
to
the
Manager
and
the
annual
expense
limit
were
as
follows:
Any
amounts
contractually
waived
or remitted
to
the
Fund by
the
Manager
with
respect
to
the
annual
expense
limit
in
a
particular
fiscal
year
may
be
reimbursed
by
the
Fund
to
the
Manager,
provided
that
such
reimbursement
will
not
cause
the
Fund
to
exceed
the
lesser
of
any
applicable
expense
limit
in
effect
(i)
at
the
time
of
the
original
waiver
or
payment
and
(ii)
at
the
time
of
such
reimbursement,
as
supported
by
standard accounting
practices.
Such
reimbursement
only
applies
to
amounts
waived
or
paid
by
the
Manager
within
the
three
years
prior
to
the
date
of
such
reimbursement,
calculated
monthly
from
when
the
waiver
or
payment
was
recorded.
Any
amounts
recouped
by
the
Manager
during
the
period
are
reflected
on
the
Statement
of
Operations
as
“Recoupment
of
prior
expenses
reimbursed
by
the
Manager.”
At
December
31,
2023,
there
were
no
remaining
contractual
reimbursements
subject
to
repayment
by
the
Fund
in
subsequent
years,
and
no
commitment
or
contingent
liability
is
expected.
Management
fees,
which
the
Manager
may
waive
in
order
to
maintain
more
competitive
expense
ratios,
are
not
subject
to
repayment
in
subsequent
years.
Information
on
the
total
amount
waived/reimbursed
by
the
Manager
or
repaid
to
the
Manager
by
the
Fund
during
the
period
can
be
found
on
the
Statement
of
Operations,
as
applicable.
During
the
year
ended
December
31,
2023,
there
were
no
such
waivers.
The
Manager
serves
as
the
investment
adviser
of the
underlying
funds
in
which
the
Fund
invests.
At
December
31,
2023,
these
underlying
funds
are
noted
as
Affiliated
Investment
Companies
in
the
Fund’s
Schedule
of
Portfolio
Investments.
Additional
information,
including
financial
statements,
about
these
Funds
is
available
at
www.allianzlife.com.
The
Manager
is
paid
a
separate
fee
from
the
underlying
funds
for
such
services.
A
summary
of
the
Fund’s
investments
in
affiliated
investment
companies
for
the
year
ended
December
31,
2023
is
as
follows:
Pursuant
to
separate
agreements
between
the
Trust
and
the
Manager,
the
Manager
provides
a
Chief
Compliance
Officer
(“CCO”)
and
certain
compliance
oversight
and
regulatory
filing
services
to
the
Trust.
Under
these
agreements,
the
Manager
is
entitled
to
an
amount
equal
to
a
portion
of
the
compensation
and
certain
other
expenses
related
to
the
individuals
performing
the
CCO
and
compliance
oversight
services,
as
well
as
$100
per
hour
for
time
incurred
in
connection
with
the
preparation
and
filing
of
certain
documents
with
the
SEC.
The
fees
are
paid
to
the
Manager
on
a
quarterly
basis.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administrative
and
compliance
services
fees.”
Citi
Fund
Services
Ohio,
Inc.
(“Citi”
or
the
“Administrator”),
a
wholly
owned
subsidiary
of
Citigroup,
Inc.,
with
which
an
officer
of
the
Trust
is
affiliated,
serves
as
the
Trust’s
administrator
and
fund
accountant,
and
assists
the
Trust
in
all
aspects
of
its
administration
and
operation.
The
Administrator
is
entitled
to
a
fee,
accrued
daily
and
paid
monthly.
The
Administrator
is
entitled
to
an
annual
fee
for
each
additional
class
of
shares
of
any
Fund,
certain
annual
fees
in
supporting
fair
value
services,
and
a
Trust-wide
annual
fee
for
providing
infrastructure
and
support
in
implementing
the
written
policies
and
procedures
comprising
the
Fund’s
compliance
program.
The
Administrator
is
also
reimbursed
for
certain
expenses
incurred.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administration
fees.”
FIS
Investor
Services
LLC
(“FIS”)
serves
as
the
Fund's
transfer
agent.
Under
the
Transfer
Agent
Agreement,
the
Trust
pays
FIS
a
fee
for
its
services
and
reimburses
FIS
for
all
of
their
reasonable
out-of-pocket
expenses
incurred
in
providing
these
services.
The
Bank
of
New
York
Mellon
(“BNY
Mellon”
or
the
“Custodian”)
serves
as
the
Trust’s
custodian.
For
these
services
as
custodian,
the
Funds
pay
BNY
Mellon
a
fee
based
on
a
percentage
of
assets
held
on
behalf
of
the
Funds,
plus
certain
out-of-pocket
charges.
Allianz
Life
Financial
Services,
LLC
(“ALFS”),
an
affiliate
of
the
Manager,
serves
as
distributor
of
the
Fund.
ALFS
receives
an
annual
Trust-wide
annual
fee
of
$7,500,
paid
by
the
Manager
from
its
profits
and
not
by
the
Trust,
for
recordkeeping
and
reporting
services.
Annual
Rate
Annual
Expense
Limit
AZL
DFA
Multi-Strategy
Fund
0.05%
0.20%
Value
12/31/22
Purchases
at
Cost
Proceeds
from
Sales
Net
Realized
Gains
(Losses)
Change
in
Net
Unrealized
Appreciation
(Depreciation)
Value
12/31/23
Shares
as
of
12/31/23
Dividend
Income
Net
Realized
Gains
Distributions
from
Affiliated
Underlying
Funds
AZL
DFA
Five-Year
Global
Fixed
Income
Fund
$
288,877,815
$
2,493,453
$
(290,348,855)
$
(48,462,076)
$
47,439,663
$
—
—
$
2,321,899
$
—
AZL
DFA
International
Core
Equity
Fund
87,434,596
4,287,085
(12,522,906)
143,505
8,508,164
87,850,444
8,554,084
1,567,334
2,719,751
AZL
DFA
U.S.
Core
Equity
Fund
274,198,533
10,262,463
(51,451,587)
3,612,222
37,394,104
274,015,735
19,324,100
1,268,378
8,994,083
AZL
DFA
U.S.
Small
Cap
Fund
73,002,157
3,918,297
(10,799,704)
(273,610)
6,650,048
72,497,188
7,093,658
182,187
3,689,099
AZL
Enhanced
Bond
Index
Fund
—
294,933,103
(19,530,972)
(120,019)
9,240,526
284,522,638
28,973,792
4,602,755
—
$
723,513,101
$
315,894,401
$
(384,654,024)
$
(45,099,978)
$
109,232,505
$
718,886,005
63,945,634
$
9,942,553
$
15,402,933
AZL
DFA
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
10
Certain
Officers
and
Trustees
of
the
Trust
are
affiliated
with
the
Manager
or
the
Administrator.
Such
Officers
(except
for
the
Trust’s
CCO
as
noted
above)
and
Trustees
receive
no
compensation
from
the
Trust
for
serving
in
their
respective
roles.
4.
Investment
Valuation
Summary
The
valuation
techniques
employed
by
the
Fund,
as
described
below,
maximize
the
use
of
observable
inputs
and
minimize
the
use
of
unobservable
inputs
in
determining
fair
value.
The
inputs
used
for
valuing
the
Fund’s
investments
are
summarized
in
the
three
broad
levels
listed
below:
•
Level
1
-
quoted
prices
in
active
markets
for
identical
assets
•
Level
2
-
other
significant
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayments
speeds,
credit
risk,
etc.)
•
Level
3
-
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
investments)
Changes
in
valuation
techniques
may
result
in
transfers
in
or
out
of
an
assigned
level
within
the
disclosure
hierarchy.
The
inputs
or
methodology
used
for
valuing
investments
is
not
necessarily
an
indication
of
the
risk
associated
with
investing
in
those
investments.
Investments
in
other
investment
companies
are
valued
at
their
published
net
asset
value
(“NAV”).
Security
prices
are
determined
pursuant
to
valuation
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
“Board”
or
“Trustees”)
as
of
the
close
of
the
New
York
Stock
Exchange
(“NYSE”)
(generally
4:00
pm
Eastern
Time).
The
investments
utilizing
Level
1
valuations
represent
investments
in
open-end
investment
companies.
The
Board
has
designated
the
Manager
to
perform
the
Fund’s
fair
value
determinations
in
accordance
with
valuation
procedures
approved
by
the
Board.
The
effect
of
using
fair
value
pricing
is
that
the
Fund’s
NAV
will
be
subject
to
the
judgment
of
the
Manager.
The
Manager's
fair
valuation
process
is
subject
to
the
oversight
of
the
Board.
The
following
is
a
summary
of
the
valuation
inputs
used
as
of
December
31,
2023
in
valuing
the
Fund's
investments
based
upon
the
three
levels
defined
above:
5.
Security
Purchases
and
Sales
For
the
year
ended
December
31,
2023,
cost
of
purchases
and
proceeds
from
sales
of
securities
(excluding
securities
maturing
less
than
one
year
from
acquisition)
were
as
follows:
6.
Investment
Risks
The
risks
below
are
presented
in
an
order
intended
to
facilitate
readability.
Their
order
does
not
imply
that
the
realization
of
one
risk
is
more
likely
to
occur
more
frequently
than
another
risk,
nor
does
it
imply
that
the
realization
of
one
risk
is
likely
to
have
a
greater
adverse
impact
than
another
risk.
The
Fund
may
be
subject
to
other
risks
in
addition
to
these
identified
risks.
This
section
discusses
certain
common
principal
risks
encountered
by
the
Fund.
Derivatives
Risk:
The
Fund
may
invest
directly
or
through
affiliated
or
unaffiliated
mutual
funds
in
derivative
instruments
such
as
futures,
options,
and
options
on
futures.
A
derivative
is
a
financial
contract
whose
value
depends
on,
or
is
derived
from,
the
value
of
an
underlying
asset,
reference
rate,
or
risk.
Use
of
derivative
instruments
involves
risks
different
from,
or
possibly
greater
than,
the
risks
associated
with
investing
directly
in
securities
and
other
traditional
investments.
Derivatives
are
subject
to
a
number
of
other
risks,
such
as
liquidity
risk,
interest
rate
risk,
market
risk,
credit
risk,
and
selection
risk.
Derivatives
also
involve
the
risk
of
mispricing
or
improper
valuation
and
the
risk
that
changes
in
the
value
may
not
correlate
perfectly
with
the
underlying
asset,
rate,
or
index.
Using
derivatives
may
result
in
losses,
possibly
in
excess
of
the
principal
amount
invested.
Also,
suitable
derivative
transactions
may
not
be
available
in
all
circumstances.
The
other
party
to
a
derivatives
contract
could
default.
During
the
year
ended
December
31,
2023,
the
Fund
did
not
directly
invest
in
derivatives.
Foreign
Securities
Risk:
Investing
in
the
securities
of
non-U.S.
issuers
involves
a
number
of
risks,
such
as
fluctuations
in
currency
values,
adverse
political,
social
or
economic
developments,
and
differences
in
social
and
economic
developments
or
policies.
Such
risks
include
future
political
and
economic
developments,
and
the
possible
imposition
of
exchange
controls
or
other
foreign
governmental
laws
and
restrictions.
In
addition,
with
respect
to
certain
countries,
there
is
the
possibility
of
expropriation
of
assets,
confiscatory
taxation,
political
or
social
instability
or
diplomatic
developments
which
could
adversely
affect
investments
in
those
securities.
Certain
foreign
companies
may
be
subject
to
sanctions,
embargoes,
or
other
governmental
actions
that
may
impair
or
otherwise
limit
the
ability
to
invest
in,
receive,
hold
or
sell
the
securities
of
such
companies.
Fund
of
Fund
Risk:
The
Fund,
as
a
shareholder
of
the
underlying
funds,
indirectly
bears
its
proportionate
share
of
any
investment
management
fees
and
other
expenses
of
the
underlying
funds.
Further
due
to
the
fees
and
expenses
paid
by
the
Fund,
as
well
as
small
variations
in
the
Fund’s
actual
allocations
to
the
underlying
funds
and
any
futures
and
cash
held
in
the
Fund’s
portfolio,
the
performance
and
income
distributions
of
the
Fund
will
not
be
the
same
as
the
performance
and
income
distributions
of
the
underlying
funds.
In
addition,
the
Fund
maintains
indirect
exposure
to
various
types
of
risk
which
may
exist
in
the
underlying
Funds,
such
as
foreign
securities
risk,
fixed
income
securities
risk
and
other
risks.
Interest
Rate
Risk:
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
The
price
of
a
bond
is
also
affected
by
its
maturity.
Bonds
with
longer
maturities
generally
have
greater
sensitivity
to
changes
in
interest
rates.
Investment
Securities:
Level
1
Level
2
Level
3
Total
Affiliated
Investment
Companies
$
718,886,005
$
—
$
—
$
718,886,005
Total
Investment
Securities
$718,886,005
$—
$—
$718,886,005
Purchases
Sales
AZL
DFA
Multi-Strategy
Fund
$315,894,401
$384,654,024
AZL
DFA
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
11
Market
Risk
:
The
market
price
of
securities
owned
by
the
underlying
funds
may
go
up
or
down,
sometimes
rapidly
and
unpredictably.
Securities
may
decline
in
value
due
to
factors
affecting
securities
markets
generally
or
particular
industries
represented
in
the
securities
markets.
The
value
of
a
security
may
decline
due
to
general
market
conditions,
economic
trends
or
events that
are
not
specifically
related
to
a
particular
company,
such
as
real
or
perceived
adverse
economic
conditions,
inflation,
recessions, changes
in
the
general
outlook
for
corporate
earnings,
changes
in
interest
or
currency
rates,
or
adverse
investor
sentiment,
as
well
as
natural
disasters,
and
outbreaks
of
infectious
illnesses
or
other
widespread
public
health
issues.
7.
Federal
Tax
Information
It
is
the
policy
of
the
Fund
to
continue
to
qualify
as
a
regulated
investment
company
by
complying
with
the
provisions
available
to
certain
investment
companies,
as
defined
under
Subchapter
M
of
the
Internal
Revenue
Code,
and
to
make
distributions
of
net
investment
income
and
net
realized
gains
sufficient
to
relieve
it
from
all,
or
substantially
all,
federal
income
taxes.
Accordingly,
no
provisions
for
federal
income
taxes
are
required
in
the
financial
statements.
Management
of
the
Fund
has
reviewed
tax
positions
taken
in
tax
years
that
remain
subject
to
examination
by
all
major
tax
jurisdictions,
including
federal
(i.e.,
the
last
four
tax
year
ends
and
the
interim
tax
period
since
then,
as
applicable).
Management
believes
that
there
is
no
tax
liability
resulting
from
unrecognized
tax
benefits
related
to
uncertain
tax
positions
taken.
Cost
of
securities,
including
derivatives
and
short
positions
as
applicable,
for
federal
income
tax
purposes
at
December
31,
2023
was
$620,268,582.
The
gross
unrealized
appreciation/
(depreciation)
on
a
tax
basis
was
as
follows:
As
of
the
end
of
its
tax
year
ended
December
31,
2023,
the
Fund
had
capital
loss
carry
forwards
(“CLCFs”)
as
summarized
in
the
table
below.
The
Board
does
not
intend
to
authorize
a
distribution
of
any
realized
gain
for
the
Fund
until
any
applicable
CLCF
has
been
offset.
CLCFs
not
subject
to
expiration:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2023, was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2022, was
as
follows:
At
December
31,
2023,
the
components
of
accumulated
earnings
on
a
tax
basis
were
as
follows:
8.
Ownership
and
Principal
Holders
The
beneficial
ownership,
either
directly
or
indirectly,
of
more
than
25%
of
the
voting
securities
of
a
fund
creates
presumptions
of
control
of
the
fund,
under
section
2
(a)(9)
of
the
1940
Act.
As
of December
31,
2023,
the
Fund
had
an
individual
shareholder
account
which
is
affiliated
with
the
Manager
representing
ownership
in
excess
of
90%
of
the
Fund.
Investment
activities
of
this
shareholder
could
have
a
material
impact
to
the
Fund.
As
of
December
31,
2023,
the
Fund
had
no
controlling
interest
(in
excess
of
50%)
in
the
Fund’s
investments.
Unrealized
appreciation
$98,617,423
Unrealized
(depreciation)
—
Net
unrealized
appreciation/(depreciation)
$98,617,423
Short-Term
Amount
Long-Term
Amount
Total
AZL
DFA
Multi-Strategy
Fund
$
—
$
32,040,228
$
32,040,228
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
DFA
Multi-Strategy
Fund
$19,999,004
$62,786,000
$82,785,004
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
DFA
Multi-Strategy
Fund
$8,932,252
$73,578,680
$82,510,932
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Undistributed
Ordinary
Income
Undistributed
Long-Term
Capital
Gains
Accumulated
Capital
and
Other
Losses
Unrealized
Appreciation/
Depreciation(a)
Total
Accumulated
Earnings/
(Deficit)
AZL
DFA
Multi-Strategy
Fund
$9,399,705
$—
$(32,040,228)
$98,617,423
$75,976,900
(a)
The
differences
between
book-basis
and
tax-basis
unrealized
appreciation/(depreciation)
are
attributable
primarily
to
tax
deferral
of
losses
on
wash
sales
.
AZL
DFA
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
12
9.
Recent
Regulatory
Pronouncements
Effective
January
24,
2023,
the
SEC
adopted
rule
and
form
amendments
that
require
open-end
management
investment
companies
to
transmit
concise
and
visually
engaging
annual
and
semi-annual
reports
to
shareholders
that
highlight
key
information.
Other
information,
including
financial
statements,
will
no
longer
appear
in
a
tailored
shareholder
report
but
must
be
available
online,
delivered
free
of
charge
upon
request,
and
filed
on
a
semi-annual
basis
on
Form
N-CSR.
The
rule
and
form
amendments
have
a
compliance
date
of
July
24,
2024.
Accordingly,
the
rule
and
form
amendments
will
not
impact
the
Fund
until
the
2024
semi-annual
shareholder
report
and
will
have
no
effect
the
Fund’s
accounting
policies
or
financial
statements.
10.
Subsequent
Events
Management
of
the
Fund
has
evaluated
the
need
for
additional
disclosures
or
adjustments
resulting
from
events
through
the
date
the
financial
statements
were
issued.
Based
on
this
evaluation,
there
were
no
subsequent
events
to
report
that
would
have
material
impact
on
the
Fund’s
financial
statements.
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
13
To
the
Board
of
Trustees
of
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
Shareholders
of
AZL
DFA
Multi-Strategy
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
schedule
of
portfolio
investments,
of
AZL
DFA
Multi-Strategy
Fund
(one
of
the
funds
constituting
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust,
referred
to
hereafter
as
the
"Fund")
as
of
December
31,
2023,
the
related
statement
of
operations
for
the
year
ended
December
31,
2023,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2023,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2023
by
correspondence
with
the
transfer
agent.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
/s/
PricewaterhouseCoopers
LLP
New
York,
New
York
February
22,
2024
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Allianz
Variable
Insurance
Products
complex
since
2018.
14
Other
Federal
Income
Tax
Information
(Unaudited)
For
the
year
ended
December
31,
2023,
26.18%
of
the
total
ordinary
income
dividends
paid
by
the
Fund
qualify
for
the
corporate
dividends
received
deductions
available
to
corporate
shareholders.
During
the
year
ended
December
31,
2023,
the
Fund
declared
net
long-term
capital
gain
distributions
of
$62,786,000.
15
Other
Information
(Unaudited)
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities
is
available,
without
charge,
upon
request,
by
visiting
the
Securities
and
Exchange
Commission’s
(‘‘Commission’’)
website
at
www.sec.gov,
or
by
calling
800-624-0197.
Information
regarding
how
the
Fund
voted
proxies
relating
to
portfolio
securities
during
the
most
recent
12-month
period
ended
June
30th
is
available
(i)
without
charge,
upon
request,
by
calling
800-624-0197;
(ii)
on
the
Trust’s
website
at
https://www.allianzlife.com;
and
(iii)
on
the
Commission’s
website
at
http://www.sec.gov
.
The
Fund
files
complete
Schedules
of
Portfolio
Holdings
with
the
Commission
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Schedules
of
Portfolio
Holdings
for
the
Fund
are
available
without
charge
on
the
Commission’s
website
at
http://www.sec.gov,
or
may
be
obtained
by
calling
800-624-0197.
16
Approval
of
Investment
Advisory
Agreement
(Unaudited)
Subject
to
the
general
supervision
of
the
Board
of
Trustees
(the
“Board”)
and
in
accordance
with
the
investment
objectives
and
restrictions
of
each
separate
series
(each
a
“Fund,”
together,
the
“Funds”)
of
the
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”),
investment
advisory
services
are
provided
to
the
Funds
by
Allianz
Investment
Management
LLC
(the
“Manager”).
The
Manager
manages
each
Fund
pursuant
to
an
investment
management
agreement
(the
“Management
Agreement”)
with
the
Trust
in
respect
of
each
such
Fund.
The
Management
Agreement
provides
that
the
Manager,
subject
to
the
supervision
and
approval
of
the
Board,
is
responsible
for
the
management
of
each
Fund.
For
management
services,
each
Fund
pays
the
Manager
an
investment
advisory
fee
based
upon
each
Fund’s
average
daily
net
assets.
The
Manager
has
contractually
agreed
to
limit
the
expenses
of
each
Fund
by
reimbursing
the
Fund
if
and
when
total
Fund
operating
expenses
exceed
certain
amounts
until
at
least
April
30,
2025
(the
“Expense
Limitation
Agreement”).
In
reviewing
the
services
provided
by
the
Manager
and
the
terms
of
the
Management
Agreement,
the
Board
receives
and
reviews
information
related
to
the
Manager’s
experience
and
expertise
in
the
variable
insurance
marketplace.
In
addition,
the
Board
receives
information
regarding
the
Manager’s
expertise
with
regard
to
portfolio
diversification
and
asset
allocation
requirements
within
variable
insurance
products
issued
by
Allianz
Life
Insurance
Company
of
North
America
(“Allianz
Life”)
and
its
subsidiary,
Allianz
Life
Insurance
Company
of
New
York
(“Allianz
of
New
York”).
Currently,
the
Funds
are
offered
only
through
Allianz
Life
and
Allianz
of
New
York
variable
products,
and
not
in
the
retail
fund
market.
As
required
by
the
Investment
Company
Act
of
1940
(the
“1940
Act”),
the
Board
has
reviewed
and
approved
the
Management
Agreement
with
the
Manager.
The
Board’s
decision
to
approve
this
contract
reflects
the
exercise
of
its
business
judgment
on
whether
to
approve
new
arrangements
and
continue
the
existing
arrangements.
During
its
review
of
the
contract,
the
Board
considered
many
factors,
among
the
most
material
of
which
are:
the
Fund’s
investment
objectives
and
long-term
performance;
the
Manager’s
management
philosophy,
personnel,
processes
and
investment
performance,
including
its
compliance
history
and
the
adequacy
of
its
compliance
processes;
the
preferences
and
expectations
of
Fund
shareholders
(and
underlying
contract
owners)
and
their
relative
sophistication;
the
continuing
state
of
competition
in
the
mutual
fund
industry;
and
comparable
fees
in
the
mutual
fund
industry.
The
Board
also
considered
the
compensation
and
benefits
received
by
the
Manager.
This
includes
fees
received
for
services
provided
to
a
Fund
by
employees
of
the
Manager
or
of
affiliates
of
the
Manager
and
research
services
received
by
the
Manager
from
brokers
that
execute
Fund
trades,
as
well
as
advisory
fees.
The
Board
considered
the
fact
that:
(1) the
Manager
and
the
Trust
are
parties
to
an
Administrative
Services
Agreement
and
a
Compliance
Services
Agreement,
under
which
the
Manager
is
compensated
by
the
Trust
for
performing
certain
administrative
and
compliance
services
including
providing
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer;
and
(2) Allianz
Life
Financial
Services,
LLC,
an
affiliated
person
of
the
Manager,
is
a
registered
securities
broker-dealer
and
received
(along
with
its
affiliated
persons)
payments
made
by
the
underlying
funds
pursuant
to
Rule 12b1.
The
Board
is
aware
that
various
courts
have
interpreted
provisions
of
the
1940
Act
and
have
indicated
in
their
decisions
that
the
following
factors
may
be
relevant
to
an
adviser’s
compensation:
the
nature,
extent
and
quality
of
the
services
provided
by
the
adviser,
including
the
performance
of
the
fund;
the
adviser’s
cost
of
providing
the
services;
the
extent
to
which
the
adviser
may
realize
“economies
of
scale”
as
the
fund
grows
larger;
any
indirect
benefits
that
may
accrue
to
the
adviser
and
its
affiliates
as
a
result
of
the
adviser’s
relationship
with
the
fund;
performance
and
expenses
of
comparable
funds;
the
profitability
of
acting
as
adviser
to
the
fund;
and
the
extent
to
which
the
independent
Board
members,
who
are
not
“interested
persons”
of
a
fund
as
defined
by
the
1940
Act
(“Independent
Trustees”),
are
fully
informed
about
all
facts
bearing
on
the
adviser’s
services
and
fees.
The
Board
is
aware
of
these
factors
and
takes
them
into
account
in
its
review
of
the
Management
Agreement
for
the
Funds.
Each
member
of
the
Board
considered
and
weighed
these
factors
in
light
of
his
or
her
experience
in
governing
the
Trust.
The
Board
is
assisted
in
its
deliberations
by
the
advice
of
independent
legal
counsel
to
the
Independent
Trustees
(“Independent
Trustee
Counsel”).
In
this
regard,
the
Board
requests
and
receives
a
significant
amount
of
information
about
the
Funds
and
the
Manager.
Some
of
this
information
is
provided
at
each
regular
meeting
of
the
Board;
additional
information
is
provided
in
connection
with
the
particular
meetings
at
which
the
Board’s
formal
review
of
the
Management
Agreement
occurs.
In
between
regularly
scheduled
meetings,
the
Board
may
receive
information
on
particular
matters
as
the
need
arises.
Thus,
the
Board’s
evaluation
of
the
Management
Agreement
is
informed
by
reports
covering
such
matters
as:
the
Manager’s
investment
philosophy,
personnel
and
processes,
and
the
Fund’s
investment
performance
(in
absolute
terms
as
well
as
in
relationship
to
its
benchmark
and
certain
competitor
or
“peer
group”
funds).
In
connection
with
comparing
the
performance
of
each
Fund
versus
its
benchmark,
the
Board
receives
reports
on
the
extent
to
which
the
Fund’s
performance
may
be
attributed
to
various
applicable
factors,
such
as
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
rebalancing
decisions,
and
the
impact
of
cash
positions
and
Fund
fees
and
expenses.
The
Board
also
receives
reports
on
the
Funds’
expenses
(including
the
advisory
fee
itself
and
the
overall
expense
structure
of
the
Funds,
both
in
absolute
terms
and
relative
to
peer
group
and/or
competing
funds,
with
due
regard
for
the
Expense
Limitation
Agreement
and
additional
voluntary
expense
limitations);
the
use
and
allocation
of
any
brokerage
commissions
derived
from
trading
the
Funds’
portfolio
securities;
the
nature,
extent
and
quality
of
the
advisory
and
other
services
provided
to
the
Fund
by
the
Manager
and
its
affiliates;
compliance
and
audit
reports
concerning
the
Funds
and
the
companies
that
service
them;
and
relevant
developments
in
the
mutual
fund
industry
and
how
the
Funds
and/or
the
Manager
are
responding
to
them.
The
Board
also
receives
financial
information
about
the
Manager,
including
reports
on
the
compensation
and
benefits
the
Manager
derives
from
its
relationships
with
the
Funds.
These
reports
cover
not
only
the
fees
under
the
Management
Agreement,
but
also
the
fees,
if
any,
received
for
providing
other
services
to
the
Funds.
The
reports
also
discuss
any
indirect
or
“fall-out”
benefits
the
Manager
or
its
affiliates
may
derive
from
their
relationships
with
the
Funds.
The
Management
Agreement
was
most
recently
considered
at
Board
meetings
held
in
the
summer
and
fall
of
2023.
Information
relevant
to
the
approval
of
the
Management
Agreement
was
considered
at
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
as
well
as
at
various
other
meetings
preceding
those
meetings.
Accordingly,
the
Management
Agreement
was
approved
by
the
Board
at
an
in-person
meeting
on
September
19,
2023.
At
such
meeting
the
Board
also
approved
the
Expense
Limitation
Agreement
between
the
Manager
and
the
Trust
for
the
period
ending
April 30,
2025.
In
connection
with
such
meetings,
the
Board
requested
and
evaluated
extensive
materials
from
the
Manager,
including
performance
and
expense
information
for
other
investment
companies
with
similar
investment
objectives
derived
from
data
compiled
by
an
independent
third-party
provider
and
other
sources
believed
to
be
reliable
by
the
Manager
and
the
Trustees.
Prior
to
voting,
the
Trustees
reviewed
the
proposed
approval
of
the
Management
Agreement
with
management
and
with
Independent
Trustee
Counsel
and
received
a
memorandum
from
such
counsel
discussing
the
legal
standards
for
their
consideration
of
the
proposed
approval.
The
Independent
Trustees
also
discussed
the
proposed
approval
in
private
sessions
with
Independent
Trustee
Counsel
at
which
no
representatives
of
the
Manager
were
present.
In
reaching
their
determinations
relating
to
the
approval
of
the
Management
Agreement,
in
respect
of
each
Fund,
each
member
of
the
Board
considered
all
factors
he
or
she
believed
relevant.
The
Board
based
its
decision
to
approve
17
the
Management
Agreement
on
the
totality
of
the
circumstances
and
relevant
factors,
and
with
a
view
to
past
and
future
long-term
considerations.
Not
all
of
the
factors
and
considerations
discussed
above
and
below
are
necessarily
relevant
to
every
Fund,
and
the
Board
did
not
assign
relative
weights
to
factors
discussed
herein
or
deem
any
one
or
group
of
them
to
be
controlling
in
and
of
themselves.
Shareholder
reports
must
include
a
discussion
of
certain
factors
relating
to
the
selection
of
the
investment
adviser
and
the
approval
of
the
advisory
fee.
The
“factors”
enumerated
by
the
SEC
are
set
forth
below
in
italics,
as
well
as
the
Board’s
conclusions
regarding
such
factors:
(1)
The
nature,
extent
and
quality
of
services
provided
by
the
Manager.
The
Trustees
noted
that
the
Manager,
subject
to
the
oversight
of
the
Board,
administers
each
Fund’s
business
and
other
affairs.
The
Trustees
noted
that
the
Manager
also
provides
the
Trust
and
each
Fund
with
such
administrative
and
other
services
(exclusive
of,
and
in
addition
to,
any
such
services
provided
by
any
other
service
providers
retained
by
the
Trust
on
behalf
of
the
Funds)
and
executive
and
other
personnel
as
are
necessary
for
the
operation
of
the
Trust
and
the
Funds.
Except
for
the
Trust’s
Chief
Compliance
Officer
and
certain
compliance
staff,
the
Manager
pays
all
of
the
compensation
of
Trustees
and
officers
of
the
Trust
who
are
employees
of
the
Manager
or
its
affiliates.
The
Board
considered
the
scope
and
quality
of
services
provided
by
the
Manager
and
noted
that
the
scope
of
the
services
provided
has
continued
to
expand
as
a
result
of
regulatory
and
other
developments.
The
Board
noted,
for
example,
that
the
Manager
is
responsible
for
maintaining
and
monitoring
its
own
compliance
program,
and
this
compliance
program
has
been
continuously
refined
and
enhanced
in
light
of
new
regulatory
requirements.
The
Board
considered
the
capabilities
and
resources
which
the
Manager
has
dedicated
to
performing
services
on
behalf
of
the
Trust
and
its
Funds.
The
quality
of
administrative
and
other
services,
including
the
Manager’s
role
in
coordinating
the
activities
of
the
Trust’s
other
service
providers,
also
were
considered.
The
Board
concluded
that,
overall,
they
were
satisfied
with
the
nature,
extent
and
quality
of
services
provided
(and
expected
to
be
provided)
to
the
Trust
and
to
each
of
the
Funds
under
the
Management
Agreement.
(2)
The
investment
performance
of
the
Funds
and
the
Manager.
In
connection
with
every
quarterly
Board
meeting
and
the
summer
and
fall
2023
contract
review
process,
Trustees
received
extensive
information
on
the
performance
results
of
each
Fund.
This
included,
for
example,
performance
information
on
absolute
total
return,
performance
versus
the
appropriate
benchmark(s)
and
performance
versus
peer
groups
as
reported
by
Lipper,
the
contribution
to
performance
of
the
Manager’s
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
and
the
impact
on
performance
of
rebalancing
decisions,
cash
and
Fund
fees.
This
included
Lipper
performance
information
on
the
Funds
for
the
previous
quarter,
and
previous
one-,
three-
and
five-year
periods,
to
the
extent
available.
For
example,
in
connection
with
the
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
the
Manager
reported
that,
for
the
five-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
reported
that
for
the
three-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
four
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
also
reported
on
the
performance
of
the
MVP
Funds
compared
to
custom
managed-volatility
peer
groups.
For
the
five-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
middle
20%
of
its
respective
custom
managed-volatility
peer
group.
For
the
three-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%
and
three
were
in
the
middle
20%
of
their
respective
custom
managed-volatility
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
bottom
40%
of
its
respective
custom
managed-volatility
peer
group.
The
Board
members
discussed
with
the
Manager
and
considered
the
impact
of
the
volatility
management
strategies
on
performance
in
different
market
environments,
where
applicable,
and
considered
whether
they
were
operating
as
intended.
The
Board
noted,
in
particular,
the
impact
on
longer-term
performance
of
certain
characteristics
of
the
Funds’
volatility
management
strategies
in
relation
to
volatility
experienced
as
a
result
of
the
COVID-19
pandemic,
and
that
relative
performance
had
improved
as
the
markets
stabilized.
At
the
Board
meeting
held
September
19,
2023,
the
Board
also
received
updated
performance
information
for
the
Funds,
including
updated
Lipper
peer
group
ranking
information,
for
various
periods
ending
June
30,
2023.
At
the
Board
meeting
held
September
19,
2023,
the
Trustees
determined
that
the
investment
performance
of
the
Funds
was
acceptable.
(3)
The
costs
of
services
to
be
provided
and
profits
to
be
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Funds.
The
Board
considered
that
the
Manager
receives
an
advisory
fee
from
each
of
the
Funds.
The
Manager
reported
that
for
the
four
MVP
Index
Strategy
Funds,
the
advisory
fee
paid
was
in
the
31st
percentile
of
the
customized
peer
group,
and
for
the
AZL
Balanced
Index
Strategy
Fund,
the
advisory
fee
paid
was
in
the
8th
percentile
of
the
customized
peer
group.
The
Manager
reported
that
for
the
AZL
DFA
Multi-Strategy
Fund,
the
advisory
fee
paid
was
in
the
6th
percentile.
The
Manager
reported
that
for
the
AZL
MVP
DFA
Multi-Strategy,
AZL
MVP
FIAM
Multi-Strategy,
and
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Funds,
the
advisory
fee
paid
was
in
the
1st
percentile.
(A
lower
percentile
reflects
lower
fund
fees
and
is
better
for
fund
shareholders.)
Trustees
were
provided
with
information
on
the
total
expense
ratios
of
the
Funds
and
other
funds
in
the
customized
peer
groups,
and
the
Manager
reported
upon
the
challenges
in
making
peer
group
comparisons
for
the
Funds.
The
Board
further
considered
and
found
that
the
advisory
fee
paid
to
the
Manager
with
respect
to
each
Fund
was
based
on
services
provided
to
the
Fund
that
were
in
addition
to,
rather
than
duplicative
of,
the
services
provided
pursuant
to
the
advisory
agreements
for
the
underlying
funds
in
which
the
Fund
invests.
The
Manager
provided
information
concerning
the
profitability
of
the
Manager’s
investment
advisory
activities
for
the
period
from
2020
through
2022.
The
Board
recognized
that
it
is
difficult
to
make
comparisons
of
profitability
from
investment
company
advisory
agreements
because
comparative
information
is
not
generally
publicly
available
and
is
affected
by
numerous
factors,
including
the
structure
of
the
particular
adviser,
the
types
of
funds
it
manages,
its
business
mix,
numerous
assumptions
regarding
allocation
of
expenses
and
the
adviser’s
capital
structure
and
cost
of
capital.
In
considering
profitability
information,
the
Board
considered
the
possible
effect
of
certain
fall-out
benefits
to
the
Manager
and
its
affiliates.
The
Board
focused
on
profitability
of
the
Manager’s
relationships
with
the
Funds
before
taxes
and
distribution
expenses.
The
Board
recognized
that
the
Manager
should
earn
a
reasonable
level
of
profits
for
the
services
it
provides
to
each
Fund.
(4)
and
(5)
The
extent
to
which
economies
of
scale
would
be
realized
as
the
Funds
grow,
and
whether
fee
levels
reflect
these
economies
of
scale.
The
Board
noted
that
the
advisory
fee
schedules
for
the
Funds
do
not
contain
breakpoints
that
reduce
the
fee
rate
on
assets
above
specified
levels.
The
Board
recognized
that
breakpoints
may
be
an
appropriate
way
for
the
Manager
to
share
its
economies
of
scale,
if
any,
with
Funds
that
have
substantial
assets.
The
Board
found
there
was
no
uniform
methodology
for
establishing
breakpoints
that
give
effect
to
Fund-specific
services
provided
by
the
Manager.
The
Board
noted
that
in
the
fund
industry
as
a
whole,
as
well
as
among
funds
similar
to
the
Funds,
there
is
no
uniformity
or
pattern
in
the
fees
and
asset
levels
at
which
breakpoints
(if
any)
apply.
Depending
on
the
age,
size,
and
other
characteristics
of
a
particular
fund
and
its
manager’s
cost
structure,
different
conclusions
can
be
drawn
as
to
whether
there
are
economies
of
scale
to
be
realized
at
any
particular
level
of
assets,
notwithstanding
the
intuitive
conclusion
that
such
economies
exist,
or
will
be
realized
at
some
level
of
total
assets.
Moreover,
because
different
managers
have
different
cost
structures
and
service
models,
it
is
difficult
to
draw
meaningful
18
conclusions
from
the
breakpoints
that
may
have
been
adopted
by
other
funds.
The
Board
also
noted
that
the
advisory
agreements
for
many
funds
do
not
have
breakpoints
at
all,
or
if
breakpoints
exist,
they
may
be
at
asset
levels
significantly
greater
than
those
of
the
individual
Funds.
The
Board
noted
that
the
total
assets
in
all
of
the
Funds,
as
of
June
30,
2023,
were
approximately
$7.8 billion
and
that
the
largest
Fund,
the
AZL
MVP
Growth
Index
Strategy
Fund,
had
assets
of
approximately
$2.0 billion.
The
Board
noted
that
the
Manager
has
agreed
to
temporarily
limit
Fund
expenses
under
the
Expense
Limitation
Agreement,
which
has
the
effect
of
reducing
expenses
similar
to
implementation
of
advisory
fee
breakpoints.
The
Manager
has
committed
to
continue
to
consider
the
continuation
of
expense
limits
and/or
advisory
fee
breakpoints
as
Fund
assets
change.
The
Board
receives
quarterly
reports
on
the
level
of
Fund
assets.
The
Board
expects
to
continue
to
consider:
(a) the
extent
to
which
economies
of
scale
have
been
realized,
and
(b) whether
the
advisory
fee
should
be
modified,
either
in
connection
with
the
next
renewal
of
the
Management
Agreement
or
by
modifying
the
Expense
Limitation
Agreement,
to
reflect
such
economies
of
scale,
if
any.
Having
taken
these
factors
into
account,
the
Board
concluded
that
the
absence
of
breakpoints
in
the
Funds’
advisory
fee
rate
schedules
was
acceptable
under
each
Fund’s
circumstances.
In
conclusion,
after
full
consideration
of
the
above
factors,
as
well
as
such
other
factors
as
each
member
of
the
Board
considered
instructive
in
evaluating
the
Management
Agreement,
the
Board
concluded
that
the
advisory
fees
were
reasonable,
and
that
the
continuation
of
the
Management
Agreement
was
in
the
best
interest
of
the
Funds.
19
Information
about
the
Board
of
Trustees
and
Officers
(Unaudited)
The
Trust
is
managed
by
the
Trustees
in
accordance
with
the
laws
of
the
state
of
Delaware
governing
business
trusts.
In
addition
to
serving
on
the
Board
of
Trustees
of
the
Trust,
each
Trustee
serves
on
the
Board
of
the
Allianz
Variable
Insurance
Products
Trust
(“VIP
Trust”)
and
the
AIM
ETF
Products
Trust
(“ETF
Trust”)
(collectively,
the
Trust,
the
VIP
Trust,
and
ETF
Trust
are
the
“AIM
Complex”).
There
are
currently
six
Trustees,
one
of
whom
is
an
“interested
person”
of
the
Trust
within
the
meaning
of
that
term
under
the
1940
Act.
The
Trustees
and
Officers
of
the
Trust,
their
addresses,
years
of
birth,
their
positions
held
with
the
Trust,
their
terms
of
office
with
the
Trust
and
length
of
time
served,
their
principal
occupation(s)
during
the
past
five
years,
the
number
of
portfolios
in
the
Trust
they
oversee,
and
their
other
directorships
held
during
the
past
five
years
are
as
follows:
Independent
Trustees
(
1)
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Peggy
L.
Ettestad
(1957)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Lead
Independent
Trustee
Since
10/14
(Trustee
since
2/07)
Managing
Director,
Red
Canoe
Management
Consulting
LLC,
2008
to
present
56
None
Tamara
Lynn
Fagely
(1958)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Chief
Operations
Officer,
Hartford
Funds,
2012
to
2013
56
Diamond
Hill
Funds
(10
Funds)
Richard
H.
Forde
(1953)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Member
of
the
Board
and
Chairman
of
the
Finance
and
Investment
Committee,
Connecticut
Water
Service,
Inc.,
2013
to
2019
56
Connecticut
Water
Service,
Inc.
Jack
Gee
(1959)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
01/22
Retired;
previously,
Managing
Director,
BlackRock,
Inc.,
Treasurer
and
Chief
Financial
Officer
U.S.
iShares,
2004
to
2019
56
TCW
ETF
Trust
(3
Funds);
Esoterica
Thematic
Trust
(2019
-
2020)
Claire
R.
Leonardi
(1955)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
02/04
Retired;
previously,
CEO,
Health
eSense
Inc.
(a
medical
device
company),
2015
to
2018,
and
Connecticut
Innovations,
Inc.
(a
venture
capital
firm),
2012
to
2015
56
None
20
Interested
Trustee
(
3)
(1)
Each
of
the
Independent
Trustees
is
a
member
of
the
Audit
and
Operational
Risk
Oversight
Committee.
(2)
Indefinite.
(3)
Is
an
“interested
person,”
as
defined
by
the
1940
Act,
due
to
employment
by
Allianz
Life
and
the
Manager.
Officers
(1)
Indefinite.
(2)
The
Manager
and
the
Trust
are
parties
to
a
Compliance
Services
Agreement
under
which
the
Manager
provides
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer.
The
Fund’s
Statement
of
Additional
Information
(“SAI”)
contains
additional
information
about
the
Trust’s
Trustees
and
Officers.
The
SAI
is
available
without
charge,
upon
request,
by
calling
toll-free
800-624-0197
or
at
https://www.allianzlife.com.
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
06/11
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
56
None
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(1)
/
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
President
Since
11/10
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
Amanda
Farren
(1978)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Secretary
Since
02/24
Chief
Legal
Officer,
Allianz
Investment
Management
LLC;
Senior
Counsel,
Allianz
Life,
January
2024
to
present;
Senior
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2023;
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2015
-2023
Bashir
C.
Asad
(1963)
Citi
Fund
Services
Ohio,
Inc.
4400
Easton
Commons,
Suite
200
Columbus,
OH
43219
Treasurer,
Principal
Accounting
Officer
and
Principal
Financial
Officer
Since
06/16
Senior
Vice
President,
Citi
Fund
Services
Ohio,
Inc.,
2011
to
present
Chris
R.
Pheiffer
(1968)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Chief
Compliance
Officer
(2)
and
Anti-Money
Laundering
Compliance
Officer
Since
02/14
Chief
Compliance
Officer
of
the
Trust
and
the
VIP
Trust,
2014
to
present,
and
the
ETF
Trust,
2020
to
present
Michael
Tanski
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
04/09
Assistant
Vice
President,
Allianz
Investment
Management
LLC,
2013
to
present.
Laura
Quade
(1969)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
08/23
Vice
President,
Allianz
Investment
Management
LLC,
2023
to
present,
previously
Director
at
Wealth
Enhancement
Group,
November
2019
to
November
2022;
Vice
President,
Head
of
Operations
at
Hartford
Funds
2014
to
2019
ANNRPT1223
02/24
The
Allianz
VIP
Fund
of
Funds
are
distributed
by
Allianz
Life
Financial
Services,
LLC.
These
Funds
are
not
FDIC
Insured.
AZL®
MVP
Balanced
Index
Strategy
Fund
Annual
Report
December
31,
2023
Table
of
Contents
AZL®
MVP
Balanced
Index
Strategy
Fund
Management
Discussion
and
Analysis
Page
1
Expense
Examples
and
Portfolio
Composition
Page
3
Schedule
of
Portfolio
Investments
Page
4
Statement
of
Assets
and
Liabilities
Page
5
Statement
of
Operations
Page
5
Statements
of
Changes
in
Net
Assets
Page
6
Financial
Highlights
Page
7
Notes
to
the
Financial
Statements
Page
8
Report
of
Independent
Registered
Public
Accounting
Firm
Page
14
Other
Federal
Income
Tax
Information
Page
15
Other
Information
Page
16
Approval
of
Investment
Advisory
Agreement
Page
17
Information
about
the
Board
of
Trustees
and
Officers
Page
20
This
report
is
submitted
for
the
general
information
of
the
shareholder
of
the
Fund.
The
report
is
not
authorized
for
distribution
to
prospective
investors
in
the
Fund
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
contains
details
concerning
the
sales
charges
and
other
pertinent
information.
1
AZL®
MVP
Balanced
Index
Strategy
Fund
Review
(Unaudited)
Allianz
Investment
Management
LLC
serves
as
the
Manager
for
the
AZL
®
MVP
Balanced
Index
Strategy
Fund.
What
factors
affected
the
Fund’s
performance
during
the
year
ended
December
31,
2023?*
For
the
year
ended
December
31,
2023,
the
AZL
MVP
Balanced
Index
Strategy
Fund
(the
“Fund”)
returned
12.85%.
That
compared
to
26.29%,
5.53%
and
15.62%
total
return
for
its
benchmarks,
the
S&P
500
Index,
the
Bloomberg
U.S.
Aggregate
Bond
Index,
and
the
Balanced
Composite
Index,
respectively.
1
The
AZL
MVP
Balanced
Index
Strategy
Fund
is
a
fund
of
funds
that
pursues
broad
diversification
across
four
underlying
equity
sub-portfolios
and
one
fixed
income
sub-portfolio.
The
four
equity
sub-portfolios
pursue
passive
strategies
that
aim
to
achieve,
before
fees,
returns
similar
to
the
S&P
500
Index,
the
S&P
MidCap
400
Index
2
,
the
S&P
SmallCap
600
Index
3
,
and
the
MSCI
EAFE
Index
4
.
The
fixed-income
sub-portfolio
is
an
enhanced
bond
index
strategy
that
seeks
to
achieve
a
return
that
exceeds
that
of
the
Bloomberg
U.S.
Aggregate
Bond
Index.
Generally,
the
Fund
allocates
40%-60%
of
its
assets
to
the
underlying
equity
index
funds
and
40%-60%
of
its
assets
to
the
underlying
AZL
Enhanced
Bond
Index
Fund.
The
Fund
also
employs
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process,
which
is
intended
to
adjust
the
risk
of
the
portfolio
based
on
quantitative
indicators
of
market
risk,
such
as
the
current
level
of
Fund
and
market
volatility.
U.S.
equities,
particularly
large-cap
stocks,
posted
positive
performance
in
2023.
The
gains
were
due
in
part
to
falling
inflation
and
better-than-expected
earnings,
as
well
as
resilient
consumer
demand.
The
European
Central
Bank’s
(ECB)
monetary
tightening
had
a
negative
effect
on
economic
growth
in
the
Eurozone,
and
Russia’s
war
with
Ukraine
continued
to
weigh
on
international
equities.
The
U.S.
fixed
income
market
received
a
boost
after
the
Federal
Reserve
announced
a
possible
end
to
future
interest
rate
hikes.
Most
sectors
of
the
bond
market
finished
with
positive
performance
in
2023.
The
Fund,
which
invests
in
both
U.S.
and
international
markets,
underperformed
its
blended
benchmark
during
the
year
ended
December
31,
2023.
Its
off-benchmark
allocation
to
developed
market
non-U.S.
equities
slightly
detracted
from
relative
performance,
as
these
underperformed
U.S.
equities.
The
Fund’s
off-benchmark
allocation
to
mid-cap
and
small-cap
U.S.
equities
also
detracted
from
relative
performance,
as
these
underperformed
the
S&P
500
Index.
The
MVP
risk
management
process
uses
derivatives
to
seek
to
control
portfolio
volatility
in
unstable
market
conditions.
The
MVP
process
was
engaged
during
the
year
and
reduced
the
Fund’s
equity
exposure
at
multiple
points
during
the
year.
The
MVP
process
slightly
detracted
from
the
Fund’s
performance
during
2023.
Past
performance
does
not
guarantee
future
results.
*
The
Fund’s
portfolio
composition
is
subject
to
change.
There
is
no
guarantee
that
any
sectors
mentioned
will
continue
to
perform
as
described
or
that
securities
in
such
sectors
will
be
held
by
the
Fund
in
the
future.
The
information
contained
in
this
commentary
is
for
informational
purposes
only
and
should
not
be
construed
as
a
recommendation
to
purchase
or
sell
securities
in
the
sector
mentioned.
The
Fund’s
holdings
and
weightings
are
as
of
December
31,
2023.
1
For
a
complete
description
of
the
Fund’s
performance
benchmarks
please
refer
to
page
2
of
this
report.
2
The
Standard
&
Poor’s
MidCap
400
Index
(“S&P
400”)
is
a
widely
used
index
for
mid-sized
companies.
The
S&P
400
covers
7%
of
the
U.S.
equities
market,
and
is
part
of
a
series
of
S&P
U.S.
indexes
that
can
be
used
as
building
blocks
for
portfolio
composition.
3
The
Standard
&
Poor’s
SmallCap
600
Index
(“S&P
600”)
is
a
widely
used
index
for
small-capitalization
companies.
The
S&P
600
covers
3%
of
the
U.S.
equities
market,
and
is
part
of
a
series
of
S&P
U.S.
indexes
that
can
be
used
as
building
blocks
for
portfolio
composition.
4
The
Morgan
Stanley
Capital
International,
Europe,
Australasia
and
Far
East
(“MSCI
EAFE”)
Index
is
a
free
float-adjusted
market
capitalization-weighted
index
that
is
designed
to
measure
the
equity
market
performance
of
developed
markets,
excluding
the
U.S.
&
Canada.
The
indexes
defined
above
are
unmanaged.
Investors
cannot
invest
directly
in
an
index.
2
AZL®
MVP
Balanced
Index
Strategy
Fund
Review
(Unaudited)
Fund
Objective
The
Fund’s
investment
objective
is
to
seek
long-term
capital
appreciation
with
preservation
of
capital
as
an
important
consideration.
This
objective
may
be
changed
by
the
Trustees
of
the
Fund
without
shareholder
approval.
The
Fund
seeks
to
achieve
its
objective
by
investing
in
five
underlying
index
funds
(the
“Index
Strategy
Underlying
Funds”),
allocating
approximately
40%-
60%
of
its
assets
in
the
underlying
equity
index
funds
and
approximately
40%-60%
of
its
assets
in
the
underlying
bond
index
fund.
Investment
Concerns
The
Fund
invests
in
underlying
funds,
so
its
investment
performance
is
directly
related
to
the
performance
of
those
underlying
funds.
Before
investing,
investors
should
assess
the
risks
associated
with
and
types
of
investments
made
by
each
of
the
underlying
funds
in
which
the
Fund
invests.
Quantitative
investing
involves
risk
that
the
values
of
securities
selected
in
the
quantitative
analysis
can
react
differently
than
the
market
or
securities
selected
using
fundamental
analysis.
Stocks
are
more
volatile
and
carry
more
risk
and
return
potential
than
other
forms
of
investments.
International
investing
may
involve
risk
of
capital
loss
from
unfavorable
fluctuations
in
currency
values,
from
differences
in
generally
accepted
accounting
principles
or
from
economic
or
political
instability
in
other
nations.
Small-
to
mid-capitalization
companies
typically
have
a
higher
risk
of
failure
and
historically
have
experienced
a
greater
degree
of
volatility.
The
performance
of
the
underlying
funds
is
expected
to
be
lower
than
that
of
the
Indexes
because
of
fees
and
expenses.
Securities
in
which
the
underlying
funds
will
invest
may
involve
substantial
risk
and
may
be
subject
to
sudden
severe
price
declines.
Investing
in
a
single
industry
or
sector,
or
concentrating
investments
in
a
limited
number
of
industries
or
sectors,
tends
to
increase
the
risk
that
economic,
political,
or
regulatory
developments
affecting
certain
industries
or
sectors
will
have
a
large
impact
on
the
value
of
the
portfolio.
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
Mortgage-backed
investments
involve
risk
of
loss
due
to
prepayments
and,
like
any
bond,
due
to
default.
Because
of
the
sensitivity
of
mortgage-
related
securities
to
changes
in
interest
rates,
an
underlying
fund’s
performance
may
be
more
volatile
than
if
it
did
not
hold
these
securities.
Investing
in
derivative
instruments
involves
risks
that
may
be
different
from
or
greater
than
the
risk
associated
with
investing
directly
in
securities
or
other
traditional
instruments.
For
a
complete
description
of
these
and
other
risks
associated
with
investing
in
the
Fund,
please
refer
to
the
Fund’s
prospectus.
Growth
of
$10,000
Investment
The
chart
above
represents
a
comparison
of
a
hypothetical
investment
in
the
Fund
versus
a
similar
investment
in
the
Fund’s
benchmarks
and
represents
the
reinvestment
of
dividends
and
capital
gains
in
the
Fund.
Past
performance
does
not
guarantee
future
results.
The
performance
data
quoted
represents
past
performance
and
current
returns
may
be
lower
or
higher.
The
investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
the
original
cost.
To
obtain
performance
information
current
to
the
most
recent
month
end,
please
visit
www.Allianzlife.com.
The
above
expense
ratio
is
based
on
the
current
Fund
prospectus
dated
May
1,
2023.
The
Manager
and
the
Fund
have
entered
into
a
written
agreement
limiting
operating
expenses,
excluding
certain
expenses
(such
as
interest
expense
and
acquired
fund
fees
and
expenses),
to
0.20%
through
April
30,
2025.
Additional
information
pertaining
to
the
December
31,
2023
expense
ratio
can
be
found
in
the
Financial
Highlights.
Acquired
fund
fees
and
expenses
are
incurred
indirectly
by
the
Fund
through
the
valuation
of
the
Fund’s
investments
in
the
Index
Strategy
Underlying
Funds.
Accordingly,
acquired
fund
fees
and
expenses
affect
the
Fund’s
total
returns.
Because
these
fees
and
expenses
are
not
included
in
the
Fund’s
financial
highlights,
the
Fund’s
total
annual
fund
operating
expenses,
as
shown
in
the
current
prospectus,
do
not
correlate
to
the
ratios
of
expenses
to
average
net
assets
shown
in
the
Financial
Highlights.
Without
acquired
fund
fees
and
expenses
the
Fund’s
gross
expense
ratio
would
be
0.14%.
The
total
return
of
the
Fund
does
not
reflect
the
effect
of
any
insurance
charges,
the
annual
maintenance
fee
or
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Such
charges,
fees
and
tax
payments
would
reduce
the
performance
quoted.
The
Fund’s
performance
is
measured
against
the
Standard
&
Poor’s
500
Index
(“S&P
500”),
the
Bloomberg
U.S.
Aggregate
Bond
Index
and
the
Balanced
Composite
Index
(“Composite”).
The
S&P
500
is
representative
of
500
selected
common
stocks,
most
of
which
are
listed
on
the
New
York
Stock
Exchange,
and
is
a
measure
of
the
U.S.
Stock
market
as
a
whole.
The
Bloomberg
U.S.
Aggregate
Bond
Index
is
a
market
value-
weighted
performance
benchmark
for
investment-grade
fixed-rate
debt
issues,
including
government,
corporate,
asset-backed,
and
mortgage-
backed
securities,
with
maturities
of
at
least
one
year.
The
Composite
is
a
blended
index
comprised
of
(50%)
S&P
500
and
(50%)
Bloomberg
U.S.
Aggregate
Bond
Index.
These
indexes
are
unmanaged
and
do
not
reflect
the
deduction
of
fees
associated
with
a
mutual
fund,
such
as
investment
management
and
fund
accounting
fees.
The
Fund’s
performance
reflects
the
deduction
of
fees
for
services
provided
to
the
Fund.
Investors
cannot
invest
directly
in
an
index.
Average
Annual
Total
Returns
as
of
December
31,
2023
1
Year
3
Years
5
Years
10
Years
AZL
®
MVP
Balanced
Index
Strategy
Fund
12.85%
1.87%
5.55%
4.64%
Balanced
Composite
Index
15.62%
3.37%
8.63%
7.12%
Bloomberg
U.S.
Aggregate
Bond
Index
5.53%
(3.31)%
1.10%
1.81%
S&P
500
Index
26.29%
10.00%
15.69%
12.03%
Expense
Ratio
Gross
AZL
®
MVP
Balanced
Index
Strategy
Fund
0.71%
AZL
MVP
Balanced
Index
Strategy
Fund
3
Expense
Examples
(Unaudited)
As
a
shareholder
of
the
AZL
MVP
Balanced
Index
Strategy
Fund
(the
“Fund”),
you
incur
ongoing
costs,
including
management
fees,
distribution
fees,
and
other
Fund
expenses.
These
examples
are
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
Please
note
that
the
expenses
shown
in
each
table
do
not
reflect
expenses
that
apply
to
the
subaccount
or
the
insurance
contract.
If
the
expenses
that
apply
to
the
subaccount
or
the
insurance
contract
were
included,
your
costs
would
have
been
higher.
These
examples
are
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
periods
presented
below.
The
Actual
Expense
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
below,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
table
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
this
period.
The
Hypothetical
Expense
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
Balanced
Index
Strategy
Fund
$1,000.00
$1,050.60
$0.62
0.12%
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
Balanced
Index
Strategy
Fund
$1,000.00
$1,024.60
$0.61
0.12%
*
Expenses
are
equal
to
the
average
account
value
multiplied
by
the
Fund's
annualized
expense
ratio
multiplied
by
184/365
(the
number
of
days
in
the
most
recent
fiscal
half-year
divided
by
the
number
of
days
in
the
fiscal
year).
Portfolio
Composition
(Unaudited)
Investments
Percent
of
Net
Assets
Fixed
Income
Fund
47
.5
%
Domestic
Equity
Funds
35
.0
International
Equity
Fund
12
.6
Unaffiliated
Investment
Company
—
†
Total
Investment
Securities
95
.1
Net
other
assets
(liabilities)
4
.9
Net
Assets
100
.0
%
†
Represents
less
than
0.05%.
AZL
MVP
Balanced
Index
Strategy
Fund
Schedule
of
Portfolio
Investments
December
31,
2023
4
See
accompanying
notes
to
the
financial
statements.
Percentages
indicated
are
based
on
net
assets
as
of
December
31,
2023
.
Shares
Value
Affiliated
Investment
Companies
(
95
.1
%
):
Domestic
Equity
Funds
(
35
.0
%
):
2,814,572
AZL
Mid
Cap
Index
Fund,
Class
2
$
59,781,515
9,326,162
AZL
S&P
500
Index
Fund,
Class
2
188,108,697
2,613,448
AZL
Small
Cap
Stock
Index
Fund,
Class
2
31,988,605
279,878,817
1
Fixed
Income
Fund
(
47
.5
%
):
38,655,614
AZL
Enhanced
Bond
Index
Fund
379,598,130
International
Equity
Fund
(
12
.6
%
):
5,772,351
AZL
International
Index
Fund,
Class
2
100,669,805
Total
Affiliated
Investment
Companies
(Cost
$708,296,355)
760,146,752
Shares
Value
Unaffiliated
Investment
Company
(
0
.0
%
†
):
Money
Markets
(
0
.0
%
†
):
7,669
Dreyfus
Treasury
Securities
Cash
Management
Fund,
Institutional
Shares,
5.25%(a)
$
7,669
Total
Unaffiliated
Investment
Company
(Cost
$7,669)
7,669
Total
Investment
Securities
(Cost
$708,304,024)
—
95.1%(b)
760,154,421
Net
other
assets
(liabilities)
—
4.9%
39,211,858
Net
Assets
—
100.0%
$
799,366,279
†
Represents
less
than
0.05%.
(a)
The
rate
represents
the
effective
yield
at
December
31,
2023.
(b)
See
Federal
Tax
Information
listed
in
the
Notes
to
the
Financial
Statements.
Futures
Contracts
At
December
31,
2023,
the
Fund's
open
futures
contracts
were
as
follows:
Long
Futures
Description
Expiration
Date
Number
of
Contracts
Notional
Amount
Value
and
Unrealized
Appreciation/
(Depreciation)
S&P
500
Index
E-Mini
March
Futures
(U.S.
Dollar)
3/15/24
82
$
19,762,000
$
148,930
U.S.
Treasury
10-Year
Note
March
Futures
(U.S.
Dollar)
3/19/24
176
19,868,750
615,940
$
764,870
AZL
MVP
Balanced
Index
Strategy
Fund
5
See
accompanying
notes
to
the
financial
statements.
Statement
of
Assets
and
Liabilities
December
31,
2023
Statement
of
Operations
For
the
Year
Ended
December
31,
2023
Assets:
Investments
in
non-affiliates,
at
cost
$
7,669
Investments
in
affiliates,
at
cost
708,296,355
Investments
in
non-affiliates,
at
value
$
7
,
669
Investments
in
affiliates,
at
value
7
60,146
,
752
Deposit
at
broker
for
futures
contracts
collateral
39,758,405
Interest
and
dividends
receivable
139,913
Prepaid
expenses
3,582
Total
Assets
800,056,321
Liabilities:
Cash
overdraft
669
Due
to
broker
for
futures
collateral
7,001
Payable
for
capital
shares
redeemed
581,297
Management
fees
payable
67,050
Administration
fees
payable
8,213
Custodian
fees
payable
5,367
Administrative
and
compliance
services
fees
payable
1,031
Transfer
agent
fees
payable
796
Trustee
fees
payable
4,280
Other
accrued
liabilities
14,338
Total
Liabilities
690,042
Commitments
and
contingent
liabilities^
Net
Assets
$
799,366,279
Net
Assets
Consist
of:
Paid
in
capital
$
727,535,495
Total
distributable
earnings
71,830,784
Net
Assets
$
799,366,279
Shares
of
beneficial
interest
(unlimited
number
of
shares
authorized,
no
par
value)
65,159,093
Net
Asset
Value
(offering
and
redemption
price
per
share)
$
12.27
^
See
Note
3
in
Notes
to
the
Financial
Statements.
Investment
Income:
Dividends
from
affiliates
$
11,607,085
Interest
1,541,350
Dividends
from
non-affiliates
44,569
Total
Investment
Income
13,193,004
Expenses:
Management
fees
693,718
Administration
fees
78,269
Custodian
fees
24,806
Administrative
and
compliance
services
fees
9,196
Transfer
agent
fees
7,077
Trustee
fees
31,267
Professional
fees
33,922
Shareholder
reports
9,291
Other
expenses
13,324
Total
expenses
900,870
Net
Investment
Income/(Loss)
12,292,134
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments:
Net
realized
gains/(losses)
on
affiliated
underlying
funds
16,571,540
Net
realized
gains
distributions
from
affiliated
underlying
funds
10,768,821
Net
realized
gains/(losses)
on
futures
contracts
1,725,094
Change
in
net
unrealized
appreciation/depreciation
on
affiliated
underlying
funds
45,040,470
Change
in
net
unrealized
appreciation/depreciation
on
futures
contracts
820,778
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments
74,926,703
Change
in
Net
Assets
Resulting
From
Operations
$
87,218,837
AZL
MVP
Balanced
Index
Strategy
Fund
6
See
accompanying
notes
to
the
financial
statements.
Statements
of
Changes
in
Net
Assets
For
the
Year
Ended
December
31,
2023
For
the
Year
Ended
December
31,
2022
Change
In
Net
Assets:
Operations:
Net
investment
income/(loss)
$
12,292,134
$
3,500,862
Net
realized
gains/(losses)
on
investments
29,065,455
12,359,295
Change
in
unrealized
appreciation/depreciation
on
investments
45,861,248
(62,650,179)
Change
in
net
assets
resulting
from
operations
87,218,837
(46,790,022)
Distributions
to
Shareholders:
Distributions
(12,096,295)
(23,582,834)
Change
in
net
assets
resulting
from
distributions
to
shareholders
(12,096,295)
(23,582,834)
Capital
Transactions:
Proceeds
from
shares
issued
4,731,773
4,208,329
Proceeds
from
shares
issued
in
merger
579,651,043
—
Proceeds
from
dividends
reinvested
12,096,295
23,582,834
Value
of
shares
redeemed
(112,489,130)
(41,882,168)
Change
in
net
assets
resulting
from
capital
transactions
483,989,981
(14,091,005)
Change
in
net
assets
559,112,523
(
84,463,861)
Net
Assets:
Beginning
of
period
240,253,756
324,717,617
End
of
period
$
799,366,279
$
240,253,756
Share
Transactions:
Shares
issued
409,444
334,406
Shares
issued
in
merger
51,611,164
—
Dividends
reinvested
1,089,757
2,197,841
Shares
redeemed
(9,686,070)
(3,382,738)
Change
in
shares
43,424,295
(850,491)
AZL
MVP
Balanced
Index
Strategy
Fund
Financial
Highlights
(Selected
data
for
a
share
of
beneficial
interest
outstanding
throughout
the
periods
indicated.
Does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.)
7
See
accompanying
notes
to
the
financial
statements.
Year
Ended
December
31,
2023
Year
Ended
December
31,
2022
Year
Ended
December
31,
2021
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Net
Asset
Value,
Beginning
of
Period
$11.05
$14.38
$14.04
$13.90
$12.37
Investment
Activities:
Net
Investment
Income/(Loss)(a)
0.21
0.16
0.11
0.24
0.25
Net
Realized
and
Unrealized
Gains/(Losses)
on
Investments
1.19
(2.34
)
1.26
0.54
1.82
Total
from
Investment
Activities
1.40
(2.18
)
1.37
0.78
2.07
Distributions
to
Shareholders
From:
Net
Investment
Income
(0.06
)
(0.28
)
(0.26
)
(0.27
)
(0.29
)
Net
Realized
Gains
(0.12
)
(0.87
)
(0.77
)
(0.37
)
(0.25
)
Total
Dividends
(0.18
)
(1.15
)
(1.03
)
(0.64
)
(0.54
)
Net
Asset
Value,
End
of
Period
$12.27
$11.05
$14.38
$14.04
$13.90
Total
Return
(b)
12.85
%
(14.87
)%
10.02
%
5.98
%
16.92
%
Ratios
to
Average
Net
Assets/Supplemental
Data:
Net
Assets,
End
of
Period
(000's)
$799,366
$240,254
$324,718
$320,488
$331,516
Net
Investment
Income/(Loss)
1.77
%
1.30
%
0.74
%
1.82
%
1.84
%
Expenses
Before
Reductions*(c)
0.13
%
0.14
%
0.13
%
0.14
%
0.14
%
Expenses
Net
of
Reductions*
0.13
%
0.14
%
0.13
%
0.14
%
0.14
%
Portfolio
Turnover
Rate
16
%
7
%
10
%
13
%
9
%
*
The
expense
ratios
exclude
the
impact
of
fees/expenses
paid
by
each
underlying
fund.
(a)
Calculated
using
the
average
shares
method.
(b)
The
returns
include
reinvested
dividends
and
fund
level
expenses,
but
exclude
insurance
contract
charges. If
these
charges
were
included,
the
returns
would
have
been
lower.
(c)
Excludes
fee
reductions. If
such
fee
reductions
had
not
occurred,
the
ratios
would
have
been
as
indicated.
AZL
MVP
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
8
1.
Organization
The
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”)
was
organized
as
a
Delaware
statutory
trust
on
June
16,
2004.
The
Trust
is
an
open-end
management
investment
company
registered
under
the
Investment
Company
Act
of
1940,
as
amended,
(the
“1940
Act”)
and
thus
is
determined
to
be
an
investment
company,
and
follows
the
investment
company
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946
“Financial
Services—Investment
Companies”.
The
Trust
consists
of 9
separate
investment
portfolios
(collectively,
the
“Funds”),
of
which
one
is
included
in
this
report,
the
AZL
MVP
Balanced
Index
Strategy
Fund (the
“Fund”),
and 8
are
presented
in
separate
reports.
The
Fund
is
a
diversified
series
of
the
Trust.
The
Fund
is
a
“fund
of
funds”,
which
means
that
the
Fund
invests
primarily
in
other
mutual
funds
(the
"Underlying
Funds").
Underlying
Funds
invest
in
stocks,
bonds,
and
other
securities
and
reflect
varying
amounts
of
potential
investment
risk
and
reward.
The
Underlying
Funds
record
their
investments
at
fair
value.
Periodically,
the
Fund
will
adjust
its
asset
allocation
as
it
seeks
to
achieve
its
investment
objective.
The
Trust
is
authorized
to
issue
an
unlimited
number
of
shares
of
the
Fund
without
par
value.
Shares
of
the
Fund
are
available
through
the
variable
annuity
contracts
offered
through
the
separate
accounts
of
participating
insurance
companies.
Currently,
the
Fund
only
offers
its
shares
to
separate
accounts
of
Allianz
Life
Insurance
Company
of
North
America
and
Allianz
Life
Insurance
Company
of
New
York,
affiliates
of
the
Trust
and
the
Manager,
as
defined
below.
Under
the
Trust’s
organizational
documents,
its
officers
and
trustees
are
indemnified
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
In
addition,
in
the
normal
course
of
business,
the
Fund
may
enter
into
contracts
with
its
vendors
and
others
that
provide
for
general
indemnifications.
The
Fund’s
maximum
exposure
under
these
arrangements
is
unknown,
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund.
However,
based
on
experience,
the
Fund
expects
that
risk
of
loss
to
be
remote.
2.
Significant
Accounting
Policies
The
following
is
a
summary
of
significant
accounting
policies
followed
by
the
Fund
in
the
preparation
of
its
financial
statements.
The
policies
conform
with
U.S.
generally
accepted
accounting
principles
(“U.S.
GAAP”).
The
preparation
of
financial
statements
requires
management
to
make
certain
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
and
disclosure
of
contingent
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
Security
Valuation
The
Fund
records
its
investments
at
fair
value.
Fair
value
is
defined
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
willing
market
participants
at
the
measurement
date.
The
valuation
techniques
used
to
determine
fair
value
are
further
described
in
Note
4
below.
Investment
Transactions
and
Investment
Income
Investment
transactions
are
accounted
for
on
trade
date.
Net
realized
gains
and
losses
on
investments
sold
and
on
foreign
currency
transactions
are
recorded
on
the
basis
of
identified
cost.
Interest
income
is
recorded
on
the
accrual
basis
and
includes,
where
applicable,
the
amortization
of
premiums
or
accretion
of
discounts.
Dividend
income
is
recorded
on
the
ex-
dividend
date
except
in
the
case
of
foreign
securities,
in
which
case
dividends
are
recorded
as
soon
as
such
information
becomes
available.
Distributions
to
Shareholders
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
The
Fund
distributes
its
dividends
from
net
investment
income
and
net
realized
capital
gains,
if
any,
on
an
annual
basis.
The
amount
of
distributions
from
net
investment
income
and
from
net
realized
gains
is
determined
in
accordance
with
federal
income
tax
regulations,
which
may
differ
from
U.S.
GAAP.
These
“book/tax”
differences
are
either
temporary
or
permanent
in
nature.
To
the
extent
these
differences
are
permanent
in
nature
(e.g.,
return
of
capital,
net
operating
loss,
reclassification
of
certain
market
discounts,
gain/loss,
paydowns,
and
distributions),
such
amounts
are
reclassified
within
the
composition
of
net
assets
based
on
their
federal
tax-basis
treatment;
temporary
differences
(e.g.,
wash
sales
and
differing
treatment
on
certain
investments)
do
not
require
reclassification.
Distributions
to
shareholders
that
exceed
net
investment
income
and
net
realized
gains
for
tax
purposes
are
reported
as
distributions
of
capital.
Expense
Allocation
Expenses
directly
attributable
to
the
Fund
are
charged
directly
to
the
Fund,
while
expenses
attributable
to
more
than
one
Fund
are
allocated
among
the
respective
Funds
based
upon
relative
net
assets
or
some
other
reasonable
method.
Expenses
which
are
attributable
to
more
than
one
Trust
are
allocated
across
the
Allianz
Variable
Insurance
Products
Trust,
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
AIM
ETF
Products
Trust
based
upon
relative
net
assets
or
another
reasonable
basis.
Allianz
Investment
Management
LLC
(the
“Manager”),
serves
as
the
investment
manager
for
the
Trust,
Allianz
Variable
Insurance
Products
Trust
and
AIM
ETF
Products
Trust.
This
report
does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.
Affiliated
Securities
Transactions
Pursuant
to
Rule
17a-7
under
the
1940
Act,
the
Fund
may
engage
in
securities
transactions
with
affiliated
investment
companies
and
advisory
accounts
managed
by
the
Manager.
Any
such
purchase
or
sale
transaction
must
be
effected
without
a
brokerage
commission
or
other
remuneration,
except
for
customary
transfer
fees.
The
transaction
must
be
effected
at
the
current
market
price,
which
is
either
the
security’s
last
sale
price
on
an
exchange
or,
if
there
are
no
transactions
in
the
security
that
day,
at
the
average
of
the
highest
bid
and
lowest
asked
price.
During
the
year
ended
December
31,
2023,
the
Fund
did
not
engage
in
any
Rule
17a-7
transactions.
AZL
MVP
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
9
Derivative
Instruments
All
open
derivative
positions
at
period
end
are
reflected
on
the
Fund’s
Schedule
of
Portfolio
Investments.
The
following
is
a
description
of
the
derivative
instruments
utilized
by
the
Fund,
including
the
primary
underlying
risk
exposures
related
to
each
instrument
type.
The
Fund’s
allocation
to
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process
may
include
(a)
derivatives
such
as
index
futures,
other
futures
contracts,
options,
and
other
similar
securities
and
(b)
cash,
money
market
equivalents,
short-term
debt
instruments,
money
market
funds,
and
short-term
debt
funds
to
satisfy
all
applicable
margin
requirements
and
to
provide
additional
portfolio
liquidity
to
satisfy
large
redemptions
and
any
margin
calls.
Due
to
the
leverage
provided
by
derivatives,
the
notional
value
of
the
Fund’s
derivative
positions
could
exceed
20%
of
the
Fund’s
value.
The
Fund
may
also
use
futures
to
gain
equity
exposure
and
may
hold
cash
as
a
buffer
in
the
event
of
market
shocks.
Futures
Contracts
During
the
year
ended
December
31,
2023,
the
Fund
invested
in
futures
contracts
to
reduce
volatility
and
limit
the
need
to
decrease
or
increase
allocations
to
underlying
funds.
Futures
contracts
are
valued
based
upon
their
quoted
daily
settlement
prices.
Upon
entering
into
a
futures
contract,
the
Fund
is
required
to
segregate
liquid
assets
in
accordance
with
the
initial
margin
requirements
of
the
broker
or
exchange.
Futures
contracts
are
marked
to
market
daily
and
a
payable
or
receivable
for
the
change
in
value
(“variation
margin”),
if
any,
is
recorded
by
the
Fund.
Gains
or
losses
are
recognized
but
not
considered
realized
until
the
contracts
expire
or
are
closed.
Futures
contracts
involve,
to
varying
degrees,
elements
of
market
risk
(generally
equity
price
risk
related
to
stock
futures,
interest
rate
risk
related
to
bond
futures,
and
foreign
currency
risk
related
to
currency
futures)
and
exposure
to
loss
in
excess
of
the
variation
margin
disclosed
in
the
Statement
of
Assets
and
Liabilities.
The
primary
risks
associated
with
the
use
of
futures
contracts
are
the
imperfect
correlation
between
the
change
in
value
of
the
underlying
securities
and
the
prices
of
futures
contracts,
the
possibility
of
an
illiquid
market,
and
the
inability
of
the
counterparty
to
meet
the
terms
of
the
contract.
For
the
year
ended
December
31,
2023,
the
monthly
average
notional
amount
for
long
contracts
was
$33.9
million.
There
was
no
short
contract
activity
during
the
period.
Realized
gains
and
losses
are
reported
as
“Net
realized
gains/(losses)
on
futures
contracts”
on
the
Statement
of
Operations.
Summary
of
Derivative
Instruments
The
following
is
a
summary
of
the
values
of
derivative
instruments
on
the
Fund’s
Statement
of
Assets
and
Liabilities,
categorized
by
risk
exposure,
as
of
December
31,
2023:
The
following
is
a
summary
of
the
effect
of
derivative
instruments
on
the
Statement
of
Operations,
categorized
by
risk
exposure,
for
the
year
ended
December
31,
2023:
3.
Fees
and
Transactions
with
Affiliates
and
Other
Parties
The
Manager
provides
investment
advisory
and
management
services
for
the
Fund.
The
Manager
has
contractually
agreed
to
waive
fees
and
reimburse
the
Fund
to
limit
the
annual
expenses,
excluding
interest
expense
(e.g.,
cash
overdraft
fees),
taxes,
brokerage
commissions,
acquired
fund
fees
and
expenses,
other
expenditures
that
are
capitalized
in
accordance
with
U.S.
GAAP
and
other
extraordinary
expenses
not
incurred
in
the
ordinary
course
of
the
Fund’s
business,
based
on
the
daily
net
assets
of
the
Fund,
through
April
30,
2025.
Expenses
incurred
for
investment
advisory
and
management
services
are
reflected
on
the
Statement
of
Operations
as
“Management
fees.”
For
the
year
ended
December
31,
2023,
the
annual
rate
due
to
the
Manager
and
the
annual
expense
limit
were
as
follows:
Any
amounts
contractually
waived
or remitted
to
the
Fund by
the
Manager
with
respect
to
the
annual
expense
limit
in
a
particular
fiscal
year
may
be
reimbursed
by
the
Fund
to
the
Manager,
provided
that
such
reimbursement
will
not
cause
the
Fund
to
exceed
the
lesser
of
any
applicable
expense
limit
in
effect
(i)
at
the
time
of
the
original
waiver
or
payment
and
(ii)
at
the
time
of
such
reimbursement,
as
supported
by
standard accounting
practices.
Such
reimbursement
only
applies
to
amounts
waived
or
paid
by
the
Manager
within
the
three
years
prior
to
the
date
of
such
reimbursement,
calculated
monthly
from
when
the
waiver
or
payment
was
recorded.
Any
amounts
recouped
by
the
Manager
during
the
period
are
reflected
on
the
Statement
of
Operations
as
“Recoupment
of
prior
expenses
reimbursed
by
the
Manager.”
At
December
31,
2023,
there
were
no
remaining
contractual
reimbursements
subject
to
repayment
by
the
Fund
in
subsequent
years,
and
no
commitment
or
contingent
liability
is
expected.
Asset
Derivatives
Liability
Derivatives
Primary
Risk
Exposure
Statement
of
Assets
and
Liabilities
Location
Total
Value
Statement
of
Assets
and
Liabilities
Location
Total
Value
Equity
Risk
148,931
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$148,930
Payable
for
variation
margin
on
futures
contracts*
$—
Interest
Rate
Risk
–
615,940
–
–
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$615,940
Payable
for
variation
margin
on
futures
contracts*
$
—
*
For
futures
contracts,
the
amounts
represent
the
cumulative
appreciation/depreciation
of
these
futures
contracts
as
reported
in
the
Schedule
of
Portfolio
Investments.
Only
the
current
day's
variation
margin,
if
any,
is
reported
within
the
Statement
of
Assets
and
Liabilities
as
Variation
margin
on
futures
contracts.
Primary
Risk
Exposure
Location
of
Gains/(Losses)
on
Derivatives
Recognized
Realized
Gains/(Losses)
on
Derivatives
Recognized
Change
in
Net
Unrealized
Appreciation/Depreciation
on
Derivatives
Recognized
Equity
Risk
(2,723,840)
(148,811)
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$
2,723,840
$
148,811
Interest
Rate
Risk
998,746
(671,967)
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$(998,746)
$671,967
Annual
Rate
Annual
Expense
Limit
AZL
MVP
Balanced
Index
Strategy
Fund
0.10%
0.20%
AZL
MVP
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
10
Management
fees,
which
the
Manager
may
waive
in
order
to
maintain
more
competitive
expense
ratios,
are
not
subject
to
repayment
in
subsequent
years.
Information
on
the
total
amount
waived/reimbursed
by
the
Manager
or
repaid
to
the
Manager
by
the
Fund
during
the
period
can
be
found
on
the
Statement
of
Operations,
as
applicable.
During
the
year
ended
December
31,
2023,
there
were
no
such
waivers.
The
Manager
serves
as
the
investment
adviser
of the
underlying
funds
in
which
the
Fund
invests.
At
December
31,
2023,
these
underlying
funds
are
noted
as
Affiliated
Investment
Companies
in
the
Fund’s
Schedule
of
Portfolio
Investments.
Additional
information,
including
financial
statements,
about
these
Funds
is
available
at
www.allianzlife.com.
The
Manager
is
paid
a
separate
fee
from
the
underlying
funds
for
such
services.
A
summary
of
the
Fund’s
investments
in
affiliated
investment
companies
for
the
year
ended
December
31,
2023
is
as
follows:
*
Including
fund
merger
transactions.
Pursuant
to
separate
agreements
between
the
Trust
and
the
Manager,
the
Manager
provides
a
Chief
Compliance
Officer
(“CCO”)
and
certain
compliance
oversight
and
regulatory
filing
services
to
the
Trust.
Under
these
agreements,
the
Manager
is
entitled
to
an
amount
equal
to
a
portion
of
the
compensation
and
certain
other
expenses
related
to
the
individuals
performing
the
CCO
and
compliance
oversight
services,
as
well
as
$100
per
hour
for
time
incurred
in
connection
with
the
preparation
and
filing
of
certain
documents
with
the
SEC.
The
fees
are
paid
to
the
Manager
on
a
quarterly
basis.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administrative
and
compliance
services
fees.”
Citi
Fund
Services
Ohio,
Inc.
(“Citi”
or
the
“Administrator”),
a
wholly
owned
subsidiary
of
Citigroup,
Inc.,
with
which
an
officer
of
the
Trust
is
affiliated,
serves
as
the
Trust’s
administrator
and
fund
accountant,
and
assists
the
Trust
in
all
aspects
of
its
administration
and
operation.
The
Administrator
is
entitled
to
a
fee,
accrued
daily
and
paid
monthly.
The
Administrator
is
entitled
to
an
annual
fee
for
each
additional
class
of
shares
of
any
Fund,
certain
annual
fees
in
supporting
fair
value
services,
and
a
Trust-wide
annual
fee
for
providing
infrastructure
and
support
in
implementing
the
written
policies
and
procedures
comprising
the
Fund’s
compliance
program.
The
Administrator
is
also
reimbursed
for
certain
expenses
incurred.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administration
fees.”
FIS
Investor
Services
LLC
(“FIS”)
serves
as
the
Fund's
transfer
agent.
Under
the
Transfer
Agent
Agreement,
the
Trust
pays
FIS
a
fee
for
its
services
and
reimburses
FIS
for
all
of
their
reasonable
out-of-pocket
expenses
incurred
in
providing
these
services.
The
Bank
of
New
York
Mellon
(“BNY
Mellon”
or
the
“Custodian”)
serves
as
the
Trust’s
custodian.
For
these
services
as
custodian,
the
Funds
pay
BNY
Mellon
a
fee
based
on
a
percentage
of
assets
held
on
behalf
of
the
Funds,
plus
certain
out-of-pocket
charges.
Allianz
Life
Financial
Services,
LLC
(“ALFS”),
an
affiliate
of
the
Manager,
serves
as
distributor
of
the
Fund.
ALFS
receives
an
annual
Trust-wide
annual
fee
of
$7,500,
paid
by
the
Manager
from
its
profits
and
not
by
the
Trust,
for
recordkeeping
and
reporting
services.
Certain
Officers
and
Trustees
of
the
Trust
are
affiliated
with
the
Manager
or
the
Administrator.
Such
Officers
(except
for
the
Trust’s
CCO
as
noted
above)
and
Trustees
receive
no
compensation
from
the
Trust
for
serving
in
their
respective
roles.
4.
Investment
Valuation
Summary
The
valuation
techniques
employed
by
the
Fund,
as
described
below,
maximize
the
use
of
observable
inputs
and
minimize
the
use
of
unobservable
inputs
in
determining
fair
value.
The
inputs
used
for
valuing
the
Fund’s
investments
are
summarized
in
the
three
broad
levels
listed
below:
•
Level
1
-
quoted
prices
in
active
markets
for
identical
assets
•
Level
2
-
other
significant
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayments
speeds,
credit
risk,
etc.)
•
Level
3
-
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
investments)
Changes
in
valuation
techniques
may
result
in
transfers
in
or
out
of
an
assigned
level
within
the
disclosure
hierarchy.
The
inputs
or
methodology
used
for
valuing
investments
is
not
necessarily
an
indication
of
the
risk
associated
with
investing
in
those
investments.
Investments
in
other
investment
companies
are
valued
at
their
published
net
asset
value
(“NAV”).
Security
prices
are
determined
pursuant
to
valuation
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
“Board”
or
“Trustees”)
as
of
the
close
of
the
New
York
Stock
Exchange
(“NYSE”)
(generally
4:00
pm
Eastern
Time).
The
investments
utilizing
Level
1
valuations
represent
investments
in
open-end
investment
companies.
Futures
contracts
are
valued
at
the
settlement
prices
established
each
day
on
the
primary
exchange
and
are
typically
categorized
as
Level
1
in
the
fair
value
hierarchy.
Value
12/31/22
Purchases
at
Cost
*
Proceeds
from
Sales
Net
Realized
Gains
(Losses)
Change
in
Net
Unrealized
Appreciation
(Depreciation)
Value
12/31/23
Shares
as
of
12/31/23
Dividend
Income
Net
Realized
Gains
Distributions
from
Affiliated
Underlying
Funds
AZL
Enhanced
Bond
Index
Fund
$
114,593,573
$
280
,
677,685
$
(23,023,012)
$
(4,279,000)
$
11,628,884
$
379,598,130
38,655,614
$
6,169,670
$
—
AZL
International
Index
Fund,
Class
2
30,081,134
75,272,041
(15,622,602)
2,688,835
8,250,397
100,669,805
5,772,351
2,421,287
—
AZL
Mid
Cap
Index
Fund,
Class
2
18,126,803
46
,
917
,
778
(12,083,574)
1,543,656
5,276,852
59,781,515
2,814,572
437,065
1,993,689
AZL
S&P
500
Index
Fund,
Class
2
56,215,335
146,577,529
(48,482,433)
16,226,343
17,571,923
188,108,697
9,326,162
2,251,667
6,994,
3
04
AZL
Small
Cap
Stock
Index
Fund,
Class
2
9,583,863
25
,
7225,15
(6,021,893)
391,706
2,312,414
31,988,605
2,613,448
327,396
1,780,828
$
228,600,708
$
575
,
167
,
548
$
(105,233,514)
$
16,571,540
$
45,040,470
$
760,146,752
59,182,14
7
$
11,607,085
$
10,76
8
,
821
AZL
MVP
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
11
The
Board
has
designated
the
Manager
to
perform
the
Fund’s
fair
value
determinations
in
accordance
with
valuation
procedures
approved
by
the
Board.
The
effect
of
using
fair
value
pricing
is
that
the
Fund’s
NAV
will
be
subject
to
the
judgment
of
the
Manager.
The
Manager’s
fair
valuation
process
is
subject
to
the
oversight
of
the
Board.
The
following
is
a
summary
of
the
valuation
inputs
used
as
of
December
31,
2023
in
valuing
the
Fund’s
investments
based
upon
the
three
levels
defined
above:
5.
Security
Purchases
and
Sales
For
the
year
ended
December
31,
2023,
cost
of
purchases
and
proceeds
from
sales
of
securities
(excluding fund
merger
transactions
and securities
maturing
less
than
one
year
from
acquisition)
were
as
follows:
6.
Investment
Risks
The
risks
below
are
presented
in
an
order
intended
to
facilitate
readability.
Their
order
does
not
imply
that
the
realization
of
one
risk
is
more
likely
to
occur
more
frequently
than
another
risk,
nor
does
it
imply
that
the
realization
of
one
risk
is
likely
to
have
a
greater
adverse
impact
than
another
risk.
The
Fund
may
be
subject
to
other
risks
in
addition
to
these
identified
risks.
This
section
discusses
certain
common
principal
risks
encountered
by
the
Fund.
Derivatives
Risk:
The
Fund
may
invest
directly
or
through
affiliated
or
unaffiliated
mutual
funds
in
derivative
instruments
such
as
futures,
options,
and
options
on
futures.
A
derivative
is
a
financial
contract
whose
value
depends
on,
or
is
derived
from,
the
value
of
an
underlying
asset,
reference
rate,
or
risk.
Use
of
derivative
instruments
involves
risks
different
from,
or
possibly
greater
than,
the
risks
associated
with
investing
directly
in
securities
and
other
traditional
investments.
Derivatives
are
subject
to
a
number
of
other
risks,
such
as
liquidity
risk,
interest
rate
risk,
market
risk,
credit
risk,
and
selection
risk.
Derivatives
also
involve
the
risk
of
mispricing
or
improper
valuation
and
the
risk
that
changes
in
the
value
may
not
correlate
perfectly
with
the
underlying
asset,
rate,
or
index.
Using
derivatives
may
result
in
losses,
possibly
in
excess
of
the
principal
amount
invested.
Also,
suitable
derivative
transactions
may
not
be
available
in
all
circumstances.
The
other
party
to
a
derivatives
contract
could
default.
Foreign
Securities
Risk:
Investing
in
the
securities
of
non-U.S.
issuers
involves
a
number
of
risks,
such
as
fluctuations
in
currency
values,
adverse
political,
social
or
economic
developments,
and
differences
in
social
and
economic
developments
or
policies.
Such
risks
include
future
political
and
economic
developments,
and
the
possible
imposition
of
exchange
controls
or
other
foreign
governmental
laws
and
restrictions.
In
addition,
with
respect
to
certain
countries,
there
is
the
possibility
of
expropriation
of
assets,
confiscatory
taxation,
political
or
social
instability
or
diplomatic
developments
which
could
adversely
affect
investments
in
those
securities.
Certain
foreign
companies
may
be
subject
to
sanctions,
embargoes,
or
other
governmental
actions
that
may
impair
or
otherwise
limit
the
ability
to
invest
in,
receive,
hold
or
sell
the
securities
of
such
companies.
Fund
of
Fund
Risk:
The
Fund,
as
a
shareholder
of
the
underlying
funds,
indirectly
bears
its
proportionate
share
of
any
investment
management
fees
and
other
expenses
of
the
underlying
funds.
Further
due
to
the
fees
and
expenses
paid
by
the
Fund,
as
well
as
small
variations
in
the
Fund’s
actual
allocations
to
the
underlying
funds
and
any
futures
and
cash
held
in
the
Fund’s
portfolio,
the
performance
and
income
distributions
of
the
Fund
will
not
be
the
same
as
the
performance
and
income
distributions
of
the
underlying
funds.
In
addition,
the
Fund
maintains
indirect
exposure
to
various
types
of
risk
which
may
exist
in
the
underlying
Funds,
such
as
foreign
securities
risk,
fixed
income
securities
risk
and
other
risks.
Interest
Rate
Risk:
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
The
price
of
a
bond
is
also
affected
by
its
maturity.
Bonds
with
longer
maturities
generally
have
greater
sensitivity
to
changes
in
interest
rates.
Market
Risk
:
The
market
price
of
securities
owned
by
the
underlying
funds
may
go
up
or
down,
sometimes
rapidly
and
unpredictably.
Securities
may
decline
in
value
due
to
factors
affecting
securities
markets
generally
or
particular
industries
represented
in
the
securities
markets.
The
value
of
a
security
may
decline
due
to
general
market
conditions,
economic
trends
or
events that
are
not
specifically
related
to
a
particular
company,
such
as
real
or
perceived
adverse
economic
conditions,
inflation,
recessions, changes
in
the
general
outlook
for
corporate
earnings,
changes
in
interest
or
currency
rates,
or
adverse
investor
sentiment,
as
well
as
natural
disasters,
and
outbreaks
of
infectious
illnesses
or
other
widespread
public
health
issues.
Quantitative
Investing
Risk:
The
value
of
securities
selected
using
quantitative
analysis
can
react
differently
to
issuer,
political,
market,
and
economic
developments
than
the
market
as
a
whole
or
securities
selected
using
only
fundamental
analysis.
The
factors
used
in
quantitative
analysis
and
the
weight
placed
on
those
factors
may
not
be
predictive
of
a
security's
value.
In
addition,
factors
that
affect
a
security's
value
can
change
over
time
and
these
changes
may
not
be
reflected
in
the
quantitative
model.
A
quantitative
model
can
be
adversely
affected
by
errors
or
imperfections
in
the
factors
or
the
data
on
which
evaluations
are
based,
or
by
technical
issues
with
construction
or
implementation
of
the
model,
which
in
any
case
may
result
in
a
failure
of
the
portfolio
to
perform
as
expected
or
a
failure
to
identify
securities
that
will
perform
well
in
the
future.
Investment
Securities:
Level
1
Level
2
Level
3
Total
Affiliated
Investment
Companies
$
760,146,752
$
—
$
—
$
760,146,752
Unaffiliated
Investment
Company
7,669
—
—
7,669
Total
Investment
Securities
760,154,421
—
—
760,154,421
Other
Financial
Instruments:
*
Futures
Contracts
764,870
—
—
764,870
Total
Investments
$760,919,291
$—
$—
$760,919,291
*
Other
Financial
Instruments
would
include
any
derivative
instruments,
such
as
futures
contracts. These
investments
are
generally
presented
in
the
Statement
of
Assets
and
Liabilities
at
variation
margin.
Purchases
Sales
AZL
MVP
Balanced
Index
Strategy
Fund
$458,888,876
$105,233,514
AZL
MVP
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
12
7.
Federal
Tax
Information
It
is
the
policy
of
the
Fund
to
continue
to
qualify
as
a
regulated
investment
company
by
complying
with
the
provisions
available
to
certain
investment
companies,
as
defined
under
Subchapter
M
of
the
Internal
Revenue
Code,
and
to
make
distributions
of
net
investment
income
and
net
realized
gains
sufficient
to
relieve
it
from
all,
or
substantially
all,
federal
income
taxes.
Accordingly,
no
provisions
for
federal
income
taxes
are
required
in
the
financial
statements.
Management
of
the
Fund
has
reviewed
tax
positions
taken
in
tax
years
that
remain
subject
to
examination
by
all
major
tax
jurisdictions,
including
federal
(i.e.,
the
last
four
tax
year
ends
and
the
interim
tax
period
since
then,
as
applicable).
Management
believes
that
there
is
no
tax
liability
resulting
from
unrecognized
tax
benefits
related
to
uncertain
tax
positions
taken.
Cost
of
securities,
including
derivatives
and
short
positions
as
applicable,
for
federal
income
tax
purposes
at
December
31,
2023
was
$713,215,288.
The
gross
unrealized
appreciation/
(depreciation)
on
a
tax
basis
was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2023, was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2022, was
as
follows:
At
December
31,
2023,
the
components
of
accumulated
earnings
on
a
tax
basis
were
as
follows:
8.
Ownership
and
Principal
Holders
The
beneficial
ownership,
either
directly
or
indirectly,
of
more
than
25%
of
the
voting
securities
of
a
fund
creates
presumptions
of
control
of
the
fund,
under
section
2
(a)(9)
of
the
1940
Act.
As
of
December
31,
2023,
the
Fund
had
an
individual
shareholder
account
which
is
affiliated
with
the
Manager
representing
ownership
in
excess
of
85%
of
the
Fund.
Investment
activities
of
this
shareholder
could
have
a
material
impact
to
the
Fund.
9.
Acquisition
of
Funds
Effective
as
of
the
close
of
business
March
10,
2023,
the
Fund
acquired
all
the
assets
and
liabilities
of
the
AZL
MVP
Fusion
Balanced
Fund
(“MVP
Fusion
Balanced
Fund”),
an
open-end
management
investment
company,
pursuant
to
a
plan
of
reorganization
approved
by
the
Board
on
December
13,
2022
(the
“Plan”).
The
acquisition
was
accomplished
by
a
taxable
exchange
of
67,346,809
shares
of
the
MVP
Fusion
Balanced
Fund
outstanding
as
of
close
of
business
March
10,
2023,
valued
at
$579,651,043
for
51,611,164
shares
of
the
Fund.
At
the
close
of
business
March
10,
2023,
the
MVP
Fusion
Balanced
Fund’s
investment
holdings
had
a
fair
value
of
$553,582,576
and
identified
cost
of
$550,296,722.
For
financial
reporting
purposes,
assets
received
and
shares
issued
by
the
Fund
were
recorded
at
fair
value,
including
the
cost
basis
of
investments
received.
All
fees
and
expenses
incurred
by
the
MVP
Fusion
Balanced
Fund
and
the
Fund
directly
in
connection
with
the
Plan
were
borne
by
the
Manager.
There
are
no
material
differences
in
accounting
policies
of
the
MVP
Fusion
Balanced
Fund
as
compared
to
those
of
the
Fund.
Unrealized
appreciation
$51,599,294
Unrealized
(depreciation)
(4,660,161)
Net
unrealized
appreciation/(depreciation)
$46,939,133
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
Balanced
Index
Strategy
Fund
$4,448,886
$7,647,409
$12,096,295
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
Balanced
Index
Strategy
Fund
$12,671,482
$10,911,352
$23,582,834
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Undistributed
Ordinary
Income
Undistributed
Long-Term
Capital
Gains
Accumulated
Capital
and
Other
Losses
Unrealized
Appreciation/
Depreciation(a)
Total
Accumulated
Earnings/
(Deficit)
AZL
MVP
Balanced
Index
Strategy
Fund
$30,190,953
$13,117,356
$—
$46,939,133
$90,247,442
(a)
The
differences
between
book-basis
and
tax-basis
unrealized
appreciation/(depreciation)
are
attributable
primarily
to
tax
deferral
of
losses
on
wash
sales,
mark-to-market
of
futures
contracts
and
straddles.
AZL
MVP
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
13
Assuming
the
acquisition
had
been
completed
on
January
1,
2023,
the
beginning
of
the
annual
reporting
period
of
the
Fund,
the
Fund’s
pro
forma
results
of
operations
for
the year
ended
December
31,
2023,
are
as
follows:
Because
the
combined
investment
portfolios
have
been
managed
as
a
single
integrated
portfolio
since
the
acquisition
was
completed,
it
is
not
practicable
to
separate
the
amounts
of
revenue
and
earnings
of
the
MVP
Fusion
Balanced
Fund
that
have
been
included
in
the
Fund’s
Statement
of
Operations
subsequent
to
March
10,
2023.
The
Fund
did
not
purchase
or
sell
securities
following
the
acquisition
for
purposes
of
realigning
its
investment
portfolio.
Accordingly,
the
acquisition
of
the
MVP
Fusion
Balanced
Fund
did
not
affect
the
Fund’s
portfolio
turnover
ratio
for
the
year
ended
December
31,
2023.
10.
Recent
Regulatory
Pronouncements
Effective
January
24,
2023,
the
SEC
adopted
rule
and
form
amendments
that
require
open-end
management
investment
companies
to
transmit
concise
and
visually
engaging
annual
and
semi-annual
reports
to
shareholders
that
highlight
key
information.
Other
information,
including
financial
statements,
will
no
longer
appear
in
a
tailored
shareholder
report
but
must
be
available
online,
delivered
free
of
charge
upon
request,
and
filed
on
a
semi-annual
basis
on
Form
N-CSR.
The
rule
and
form
amendments
have
a
compliance
date
of
July
24,
2024.
Accordingly,
the
rule
and
form
amendments
will
not
impact
the
Fund
until
the
2024
semi-annual
shareholder
report
and
will
have
no
effect
on
the
Fund’s
accounting
policies
or
financial
statements.
11.
Subsequent
Events
Management
of
the
Fund
has
evaluated
the
need
for
additional
disclosures
or
adjustments
resulting
from
events
through
the
date
the
financial
statements
were
issued.
Based
on
this
evaluation,
there
were
no
subsequent
events
to
report
that
would
have
material
impact
on
the
Fund’s
financial
statements.
Net
investment
income/(loss)
$16,104,717
Net
realized/unrealized
gains/(losses)
82,827,821
Change
in
net
assets
resulting
from
operations
$98,932,538
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
14
To
the
Board
of
Trustees
of
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
Shareholders
of
AZL
MVP
Balanced
Index
Strategy
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
schedule
of
portfolio
investments,
of
AZL
MVP
Balanced
Index
Strategy
Fund
(one
of
the
funds
constituting
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust,
referred
to
hereafter
as
the
"Fund")
as
of
December
31,
2023,
the
related
statement
of
operations
for
the
year
ended
December
31,
2023,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2023,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2023
by
correspondence
with
the
transfer
agent
and
brokers.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
/s/
PricewaterhouseCoopers
LLP
New
York,
New
York
February
22,
2024
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Allianz
Variable
Insurance
Products
complex
since
2018.
15
Other
Federal
Income
Tax
Information
(Unaudited)
For
the
year
ended
December
31,
2023,
36.34%
of
the
total
ordinary
income
dividends
paid
by
the
Fund
qualify
for
the
corporate
dividends
received
deductions
available
to
corporate
shareholders.
During
the
year
ended
December
31,
2023,
the
Fund
declared
net
short-term
capital
gain
distributions
of
$137,757.
During
the
year
ended
December
31,
2023,
the
Fund
declared
net
long-term
capital
gain
distributions
of
$7,647,409.
16
Other
Information
(Unaudited)
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities
is
available,
without
charge,
upon
request,
by
visiting
the
Securities
and
Exchange
Commission’s
(‘‘Commission’’)
website
at
www.sec.gov,
or
by
calling
800-624-0197.
Information
regarding
how
the
Fund
voted
proxies
relating
to
portfolio
securities
during
the
most
recent
12-month
period
ended
June
30th
is
available
(i)
without
charge,
upon
request,
by
calling
800-624-0197;
(ii)
on
the
Trust’s
website
at
https://www.allianzlife.com;
and
(iii)
on
the
Commission’s
website
at
http://www.sec.gov
.
The
Fund
files
complete
Schedules
of
Portfolio
Holdings
with
the
Commission
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Schedules
of
Portfolio
Holdings
for
the
Fund
are
available
without
charge
on
the
Commission’s
website
at
http://www.sec.gov,
or
may
be
obtained
by
calling
800-624-0197.
17
Approval
of
Investment
Advisory
Agreement
(Unaudited)
Subject
to
the
general
supervision
of
the
Board
of
Trustees
(the
“Board”)
and
in
accordance
with
the
investment
objectives
and
restrictions
of
each
separate
series
(each
a
“Fund,”
together,
the
“Funds”)
of
the
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”),
investment
advisory
services
are
provided
to
the
Funds
by
Allianz
Investment
Management
LLC
(the
“Manager”).
The
Manager
manages
each
Fund
pursuant
to
an
investment
management
agreement
(the
“Management
Agreement”)
with
the
Trust
in
respect
of
each
such
Fund.
The
Management
Agreement
provides
that
the
Manager,
subject
to
the
supervision
and
approval
of
the
Board,
is
responsible
for
the
management
of
each
Fund.
For
management
services,
each
Fund
pays
the
Manager
an
investment
advisory
fee
based
upon
each
Fund’s
average
daily
net
assets.
The
Manager
has
contractually
agreed
to
limit
the
expenses
of
each
Fund
by
reimbursing
the
Fund
if
and
when
total
Fund
operating
expenses
exceed
certain
amounts
until
at
least
April
30,
2025
(the
“Expense
Limitation
Agreement”).
In
reviewing
the
services
provided
by
the
Manager
and
the
terms
of
the
Management
Agreement,
the
Board
receives
and
reviews
information
related
to
the
Manager’s
experience
and
expertise
in
the
variable
insurance
marketplace.
In
addition,
the
Board
receives
information
regarding
the
Manager’s
expertise
with
regard
to
portfolio
diversification
and
asset
allocation
requirements
within
variable
insurance
products
issued
by
Allianz
Life
Insurance
Company
of
North
America
(“Allianz
Life”)
and
its
subsidiary,
Allianz
Life
Insurance
Company
of
New
York
(“Allianz
of
New
York”).
Currently,
the
Funds
are
offered
only
through
Allianz
Life
and
Allianz
of
New
York
variable
products,
and
not
in
the
retail
fund
market.
As
required
by
the
Investment
Company
Act
of
1940
(the
“1940
Act”),
the
Board
has
reviewed
and
approved
the
Management
Agreement
with
the
Manager.
The
Board’s
decision
to
approve
this
contract
reflects
the
exercise
of
its
business
judgment
on
whether
to
approve
new
arrangements
and
continue
the
existing
arrangements.
During
its
review
of
the
contract,
the
Board
considered
many
factors,
among
the
most
material
of
which
are:
the
Fund’s
investment
objectives
and
long-term
performance;
the
Manager’s
management
philosophy,
personnel,
processes
and
investment
performance,
including
its
compliance
history
and
the
adequacy
of
its
compliance
processes;
the
preferences
and
expectations
of
Fund
shareholders
(and
underlying
contract
owners)
and
their
relative
sophistication;
the
continuing
state
of
competition
in
the
mutual
fund
industry;
and
comparable
fees
in
the
mutual
fund
industry.
The
Board
also
considered
the
compensation
and
benefits
received
by
the
Manager.
This
includes
fees
received
for
services
provided
to
a
Fund
by
employees
of
the
Manager
or
of
affiliates
of
the
Manager
and
research
services
received
by
the
Manager
from
brokers
that
execute
Fund
trades,
as
well
as
advisory
fees.
The
Board
considered
the
fact
that:
(1) the
Manager
and
the
Trust
are
parties
to
an
Administrative
Services
Agreement
and
a
Compliance
Services
Agreement,
under
which
the
Manager
is
compensated
by
the
Trust
for
performing
certain
administrative
and
compliance
services
including
providing
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer;
and
(2) Allianz
Life
Financial
Services,
LLC,
an
affiliated
person
of
the
Manager,
is
a
registered
securities
broker-dealer
and
received
(along
with
its
affiliated
persons)
payments
made
by
the
underlying
funds
pursuant
to
Rule 12b1.
The
Board
is
aware
that
various
courts
have
interpreted
provisions
of
the
1940
Act
and
have
indicated
in
their
decisions
that
the
following
factors
may
be
relevant
to
an
adviser’s
compensation:
the
nature,
extent
and
quality
of
the
services
provided
by
the
adviser,
including
the
performance
of
the
fund;
the
adviser’s
cost
of
providing
the
services;
the
extent
to
which
the
adviser
may
realize
“economies
of
scale”
as
the
fund
grows
larger;
any
indirect
benefits
that
may
accrue
to
the
adviser
and
its
affiliates
as
a
result
of
the
adviser’s
relationship
with
the
fund;
performance
and
expenses
of
comparable
funds;
the
profitability
of
acting
as
adviser
to
the
fund;
and
the
extent
to
which
the
independent
Board
members,
who
are
not
“interested
persons”
of
a
fund
as
defined
by
the
1940
Act
(“Independent
Trustees”),
are
fully
informed
about
all
facts
bearing
on
the
adviser’s
services
and
fees.
The
Board
is
aware
of
these
factors
and
takes
them
into
account
in
its
review
of
the
Management
Agreement
for
the
Funds.
Each
member
of
the
Board
considered
and
weighed
these
factors
in
light
of
his
or
her
experience
in
governing
the
Trust.
The
Board
is
assisted
in
its
deliberations
by
the
advice
of
independent
legal
counsel
to
the
Independent
Trustees
(“Independent
Trustee
Counsel”).
In
this
regard,
the
Board
requests
and
receives
a
significant
amount
of
information
about
the
Funds
and
the
Manager.
Some
of
this
information
is
provided
at
each
regular
meeting
of
the
Board;
additional
information
is
provided
in
connection
with
the
particular
meetings
at
which
the
Board’s
formal
review
of
the
Management
Agreement
occurs.
In
between
regularly
scheduled
meetings,
the
Board
may
receive
information
on
particular
matters
as
the
need
arises.
Thus,
the
Board’s
evaluation
of
the
Management
Agreement
is
informed
by
reports
covering
such
matters
as:
the
Manager’s
investment
philosophy,
personnel
and
processes,
and
the
Fund’s
investment
performance
(in
absolute
terms
as
well
as
in
relationship
to
its
benchmark
and
certain
competitor
or
“peer
group”
funds).
In
connection
with
comparing
the
performance
of
each
Fund
versus
its
benchmark,
the
Board
receives
reports
on
the
extent
to
which
the
Fund’s
performance
may
be
attributed
to
various
applicable
factors,
such
as
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
rebalancing
decisions,
and
the
impact
of
cash
positions
and
Fund
fees
and
expenses.
The
Board
also
receives
reports
on
the
Funds’
expenses
(including
the
advisory
fee
itself
and
the
overall
expense
structure
of
the
Funds,
both
in
absolute
terms
and
relative
to
peer
group
and/or
competing
funds,
with
due
regard
for
the
Expense
Limitation
Agreement
and
additional
voluntary
expense
limitations);
the
use
and
allocation
of
any
brokerage
commissions
derived
from
trading
the
Funds’
portfolio
securities;
the
nature,
extent
and
quality
of
the
advisory
and
other
services
provided
to
the
Fund
by
the
Manager
and
its
affiliates;
compliance
and
audit
reports
concerning
the
Funds
and
the
companies
that
service
them;
and
relevant
developments
in
the
mutual
fund
industry
and
how
the
Funds
and/or
the
Manager
are
responding
to
them.
The
Board
also
receives
financial
information
about
the
Manager,
including
reports
on
the
compensation
and
benefits
the
Manager
derives
from
its
relationships
with
the
Funds.
These
reports
cover
not
only
the
fees
under
the
Management
Agreement,
but
also
the
fees,
if
any,
received
for
providing
other
services
to
the
Funds.
The
reports
also
discuss
any
indirect
or
“fall-out”
benefits
the
Manager
or
its
affiliates
may
derive
from
their
relationships
with
the
Funds.
The
Management
Agreement
was
most
recently
considered
at
Board
meetings
held
in
the
summer
and
fall
of
2023.
Information
relevant
to
the
approval
of
the
Management
Agreement
was
considered
at
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
as
well
as
at
various
other
meetings
preceding
those
meetings.
Accordingly,
the
Management
Agreement
was
approved
by
the
Board
at
an
in-person
meeting
on
September
19,
2023.
At
such
meeting
the
Board
also
approved
the
Expense
Limitation
Agreement
between
the
Manager
and
the
Trust
for
the
period
ending
April 30,
2025.
In
connection
with
such
meetings,
the
Board
requested
and
evaluated
extensive
materials
from
the
Manager,
including
performance
and
expense
information
for
other
investment
companies
with
similar
investment
objectives
derived
from
data
compiled
by
an
independent
third-party
provider
and
other
sources
believed
to
be
reliable
by
the
Manager
and
the
Trustees.
Prior
to
voting,
the
Trustees
reviewed
the
proposed
approval
of
the
Management
Agreement
with
management
and
with
Independent
Trustee
Counsel
and
received
a
memorandum
from
such
counsel
discussing
the
legal
standards
for
their
consideration
of
the
proposed
approval.
The
Independent
Trustees
also
discussed
the
proposed
approval
in
private
sessions
with
Independent
Trustee
Counsel
at
which
no
representatives
of
the
Manager
were
present.
In
reaching
their
determinations
relating
to
the
approval
of
the
Management
Agreement,
in
respect
of
each
Fund,
each
member
of
the
Board
considered
all
factors
he
or
she
believed
relevant.
The
Board
based
its
decision
to
approve
18
the
Management
Agreement
on
the
totality
of
the
circumstances
and
relevant
factors,
and
with
a
view
to
past
and
future
long-term
considerations.
Not
all
of
the
factors
and
considerations
discussed
above
and
below
are
necessarily
relevant
to
every
Fund,
and
the
Board
did
not
assign
relative
weights
to
factors
discussed
herein
or
deem
any
one
or
group
of
them
to
be
controlling
in
and
of
themselves.
Shareholder
reports
must
include
a
discussion
of
certain
factors
relating
to
the
selection
of
the
investment
adviser
and
the
approval
of
the
advisory
fee.
The
“factors”
enumerated
by
the
SEC
are
set
forth
below
in
italics,
as
well
as
the
Board’s
conclusions
regarding
such
factors:
(1)
The
nature,
extent
and
quality
of
services
provided
by
the
Manager.
The
Trustees
noted
that
the
Manager,
subject
to
the
oversight
of
the
Board,
administers
each
Fund’s
business
and
other
affairs.
The
Trustees
noted
that
the
Manager
also
provides
the
Trust
and
each
Fund
with
such
administrative
and
other
services
(exclusive
of,
and
in
addition
to,
any
such
services
provided
by
any
other
service
providers
retained
by
the
Trust
on
behalf
of
the
Funds)
and
executive
and
other
personnel
as
are
necessary
for
the
operation
of
the
Trust
and
the
Funds.
Except
for
the
Trust’s
Chief
Compliance
Officer
and
certain
compliance
staff,
the
Manager
pays
all
of
the
compensation
of
Trustees
and
officers
of
the
Trust
who
are
employees
of
the
Manager
or
its
affiliates.
The
Board
considered
the
scope
and
quality
of
services
provided
by
the
Manager
and
noted
that
the
scope
of
the
services
provided
has
continued
to
expand
as
a
result
of
regulatory
and
other
developments.
The
Board
noted,
for
example,
that
the
Manager
is
responsible
for
maintaining
and
monitoring
its
own
compliance
program,
and
this
compliance
program
has
been
continuously
refined
and
enhanced
in
light
of
new
regulatory
requirements.
The
Board
considered
the
capabilities
and
resources
which
the
Manager
has
dedicated
to
performing
services
on
behalf
of
the
Trust
and
its
Funds.
The
quality
of
administrative
and
other
services,
including
the
Manager’s
role
in
coordinating
the
activities
of
the
Trust’s
other
service
providers,
also
were
considered.
The
Board
concluded
that,
overall,
they
were
satisfied
with
the
nature,
extent
and
quality
of
services
provided
(and
expected
to
be
provided)
to
the
Trust
and
to
each
of
the
Funds
under
the
Management
Agreement.
(2)
The
investment
performance
of
the
Funds
and
the
Manager.
In
connection
with
every
quarterly
Board
meeting
and
the
summer
and
fall
2023
contract
review
process,
Trustees
received
extensive
information
on
the
performance
results
of
each
Fund.
This
included,
for
example,
performance
information
on
absolute
total
return,
performance
versus
the
appropriate
benchmark(s)
and
performance
versus
peer
groups
as
reported
by
Lipper,
the
contribution
to
performance
of
the
Manager’s
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
and
the
impact
on
performance
of
rebalancing
decisions,
cash
and
Fund
fees.
This
included
Lipper
performance
information
on
the
Funds
for
the
previous
quarter,
and
previous
one-,
three-
and
five-year
periods,
to
the
extent
available.
For
example,
in
connection
with
the
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
the
Manager
reported
that,
for
the
five-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
reported
that
for
the
three-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
four
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
also
reported
on
the
performance
of
the
MVP
Funds
compared
to
custom
managed-volatility
peer
groups.
For
the
five-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
middle
20%
of
its
respective
custom
managed-volatility
peer
group.
For
the
three-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%
and
three
were
in
the
middle
20%
of
their
respective
custom
managed-volatility
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
bottom
40%
of
its
respective
custom
managed-volatility
peer
group.
The
Board
members
discussed
with
the
Manager
and
considered
the
impact
of
the
volatility
management
strategies
on
performance
in
different
market
environments,
where
applicable,
and
considered
whether
they
were
operating
as
intended.
The
Board
noted,
in
particular,
the
impact
on
longer-term
performance
of
certain
characteristics
of
the
Funds’
volatility
management
strategies
in
relation
to
volatility
experienced
as
a
result
of
the
COVID-19
pandemic,
and
that
relative
performance
had
improved
as
the
markets
stabilized.
At
the
Board
meeting
held
September
19,
2023,
the
Board
also
received
updated
performance
information
for
the
Funds,
including
updated
Lipper
peer
group
ranking
information,
for
various
periods
ending
June
30,
2023.
At
the
Board
meeting
held
September
19,
2023,
the
Trustees
determined
that
the
investment
performance
of
the
Funds
was
acceptable.
(3)
The
costs
of
services
to
be
provided
and
profits
to
be
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Funds.
The
Board
considered
that
the
Manager
receives
an
advisory
fee
from
each
of
the
Funds.
The
Manager
reported
that
for
the
four
MVP
Index
Strategy
Funds,
the
advisory
fee
paid
was
in
the
31st
percentile
of
the
customized
peer
group,
and
for
the
AZL
Balanced
Index
Strategy
Fund,
the
advisory
fee
paid
was
in
the
8th
percentile
of
the
customized
peer
group.
The
Manager
reported
that
for
the
AZL
DFA
Multi-Strategy
Fund,
the
advisory
fee
paid
was
in
the
6th
percentile.
The
Manager
reported
that
for
the
AZL
MVP
DFA
Multi-Strategy,
AZL
MVP
FIAM
Multi-Strategy,
and
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Funds,
the
advisory
fee
paid
was
in
the
1st
percentile.
(A
lower
percentile
reflects
lower
fund
fees
and
is
better
for
fund
shareholders.)
Trustees
were
provided
with
information
on
the
total
expense
ratios
of
the
Funds
and
other
funds
in
the
customized
peer
groups,
and
the
Manager
reported
upon
the
challenges
in
making
peer
group
comparisons
for
the
Funds.
The
Board
further
considered
and
found
that
the
advisory
fee
paid
to
the
Manager
with
respect
to
each
Fund
was
based
on
services
provided
to
the
Fund
that
were
in
addition
to,
rather
than
duplicative
of,
the
services
provided
pursuant
to
the
advisory
agreements
for
the
underlying
funds
in
which
the
Fund
invests.
The
Manager
provided
information
concerning
the
profitability
of
the
Manager’s
investment
advisory
activities
for
the
period
from
2020
through
2022.
The
Board
recognized
that
it
is
difficult
to
make
comparisons
of
profitability
from
investment
company
advisory
agreements
because
comparative
information
is
not
generally
publicly
available
and
is
affected
by
numerous
factors,
including
the
structure
of
the
particular
adviser,
the
types
of
funds
it
manages,
its
business
mix,
numerous
assumptions
regarding
allocation
of
expenses
and
the
adviser’s
capital
structure
and
cost
of
capital.
In
considering
profitability
information,
the
Board
considered
the
possible
effect
of
certain
fall-out
benefits
to
the
Manager
and
its
affiliates.
The
Board
focused
on
profitability
of
the
Manager’s
relationships
with
the
Funds
before
taxes
and
distribution
expenses.
The
Board
recognized
that
the
Manager
should
earn
a
reasonable
level
of
profits
for
the
services
it
provides
to
each
Fund.
(4)
and
(5)
The
extent
to
which
economies
of
scale
would
be
realized
as
the
Funds
grow,
and
whether
fee
levels
reflect
these
economies
of
scale.
The
Board
noted
that
the
advisory
fee
schedules
for
the
Funds
do
not
contain
breakpoints
that
reduce
the
fee
rate
on
assets
above
specified
levels.
The
Board
recognized
that
breakpoints
may
be
an
appropriate
way
for
the
Manager
to
share
its
economies
of
scale,
if
any,
with
Funds
that
have
substantial
assets.
The
Board
found
there
was
no
uniform
methodology
for
establishing
breakpoints
that
give
effect
to
Fund-specific
services
provided
by
the
Manager.
The
Board
noted
that
in
the
fund
industry
as
a
whole,
as
well
as
among
funds
similar
to
the
Funds,
there
is
no
uniformity
or
pattern
in
the
fees
and
asset
levels
at
which
breakpoints
(if
any)
apply.
Depending
on
the
age,
size,
and
other
characteristics
of
a
particular
fund
and
its
manager’s
cost
structure,
different
conclusions
can
be
drawn
as
to
whether
there
are
economies
of
scale
to
be
realized
at
any
particular
level
of
assets,
notwithstanding
the
intuitive
conclusion
that
such
economies
exist,
or
will
be
realized
at
some
level
of
total
assets.
Moreover,
because
different
managers
have
different
cost
structures
and
service
models,
it
is
difficult
to
draw
meaningful
19
conclusions
from
the
breakpoints
that
may
have
been
adopted
by
other
funds.
The
Board
also
noted
that
the
advisory
agreements
for
many
funds
do
not
have
breakpoints
at
all,
or
if
breakpoints
exist,
they
may
be
at
asset
levels
significantly
greater
than
those
of
the
individual
Funds.
The
Board
noted
that
the
total
assets
in
all
of
the
Funds,
as
of
June
30,
2023,
were
approximately
$7.8 billion
and
that
the
largest
Fund,
the
AZL
MVP
Growth
Index
Strategy
Fund,
had
assets
of
approximately
$2.0 billion.
The
Board
noted
that
the
Manager
has
agreed
to
temporarily
limit
Fund
expenses
under
the
Expense
Limitation
Agreement,
which
has
the
effect
of
reducing
expenses
similar
to
implementation
of
advisory
fee
breakpoints.
The
Manager
has
committed
to
continue
to
consider
the
continuation
of
expense
limits
and/or
advisory
fee
breakpoints
as
Fund
assets
change.
The
Board
receives
quarterly
reports
on
the
level
of
Fund
assets.
The
Board
expects
to
continue
to
consider:
(a) the
extent
to
which
economies
of
scale
have
been
realized,
and
(b) whether
the
advisory
fee
should
be
modified,
either
in
connection
with
the
next
renewal
of
the
Management
Agreement
or
by
modifying
the
Expense
Limitation
Agreement,
to
reflect
such
economies
of
scale,
if
any.
Having
taken
these
factors
into
account,
the
Board
concluded
that
the
absence
of
breakpoints
in
the
Funds’
advisory
fee
rate
schedules
was
acceptable
under
each
Fund’s
circumstances.
In
conclusion,
after
full
consideration
of
the
above
factors,
as
well
as
such
other
factors
as
each
member
of
the
Board
considered
instructive
in
evaluating
the
Management
Agreement,
the
Board
concluded
that
the
advisory
fees
were
reasonable,
and
that
the
continuation
of
the
Management
Agreement
was
in
the
best
interest
of
the
Funds.
20
Information
about
the
Board
of
Trustees
and
Officers
(Unaudited)
The
Trust
is
managed
by
the
Trustees
in
accordance
with
the
laws
of
the
state
of
Delaware
governing
business
trusts.
In
addition
to
serving
on
the
Board
of
Trustees
of
the
Trust,
each
Trustee
serves
on
the
Board
of
the
Allianz
Variable
Insurance
Products
Trust
(“VIP
Trust”)
and
the
AIM
ETF
Products
Trust
(“ETF
Trust”)
(collectively,
the
Trust,
the
VIP
Trust,
and
ETF
Trust
are
the
“AIM
Complex”).
There
are
currently
six
Trustees,
one
of
whom
is
an
“interested
person”
of
the
Trust
within
the
meaning
of
that
term
under
the
1940
Act.
The
Trustees
and
Officers
of
the
Trust,
their
addresses,
years
of
birth,
their
positions
held
with
the
Trust,
their
terms
of
office
with
the
Trust
and
length
of
time
served,
their
principal
occupation(s)
during
the
past
five
years,
the
number
of
portfolios
in
the
Trust
they
oversee,
and
their
other
directorships
held
during
the
past
five
years
are
as
follows:
Independent
Trustees
(
1)
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Peggy
L.
Ettestad
(1957)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Lead
Independent
Trustee
Since
10/14
(Trustee
since
2/07)
Managing
Director,
Red
Canoe
Management
Consulting
LLC,
2008
to
present
56
None
Tamara
Lynn
Fagely
(1958)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Chief
Operations
Officer,
Hartford
Funds,
2012
to
2013
56
Diamond
Hill
Funds
(10
Funds)
Richard
H.
Forde
(1953)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Member
of
the
Board
and
Chairman
of
the
Finance
and
Investment
Committee,
Connecticut
Water
Service,
Inc.,
2013
to
2019
56
Connecticut
Water
Service,
Inc.
Jack
Gee
(1959)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
01/22
Retired;
previously,
Managing
Director,
BlackRock,
Inc.,
Treasurer
and
Chief
Financial
Officer
U.S.
iShares,
2004
to
2019
56
TCW
ETF
Trust
(3
Funds);
Esoterica
Thematic
Trust
(2019
-
2020)
Claire
R.
Leonardi
(1955)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
02/04
Retired;
previously,
CEO,
Health
eSense
Inc.
(a
medical
device
company),
2015
to
2018,
and
Connecticut
Innovations,
Inc.
(a
venture
capital
firm),
2012
to
2015
56
None
21
Interested
Trustee
(
3)
(1)
Each
of
the
Independent
Trustees
is
a
member
of
the
Audit
and
Operational
Risk
Oversight
Committee.
(2)
Indefinite.
(3)
Is
an
“interested
person,”
as
defined
by
the
1940
Act,
due
to
employment
by
Allianz
Life
and
the
Manager.
Officers
(1)
Indefinite.
(2)
The
Manager
and
the
Trust
are
parties
to
a
Compliance
Services
Agreement
under
which
the
Manager
provides
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer.
The
Fund’s
Statement
of
Additional
Information
(“SAI”)
contains
additional
information
about
the
Trust’s
Trustees
and
Officers.
The
SAI
is
available
without
charge,
upon
request,
by
calling
toll-free
800-624-0197
or
at
https://www.allianzlife.com.
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
06/11
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
56
None
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(1)
/
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
President
Since
11/10
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
Amanda
Farren
(1978)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Secretary
Since
02/24
Chief
Legal
Officer,
Allianz
Investment
Management
LLC;
Senior
Counsel,
Allianz
Life,
January
2024
to
present;
Senior
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2023;
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2015
-2023
Bashir
C.
Asad
(1963)
Citi
Fund
Services
Ohio,
Inc.
4400
Easton
Commons,
Suite
200
Columbus,
OH
43219
Treasurer,
Principal
Accounting
Officer
and
Principal
Financial
Officer
Since
06/16
Senior
Vice
President,
Citi
Fund
Services
Ohio,
Inc.,
2011
to
present
Chris
R.
Pheiffer
(1968)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Chief
Compliance
Officer
(2)
and
Anti-Money
Laundering
Compliance
Officer
Since
02/14
Chief
Compliance
Officer
of
the
Trust
and
the
VIP
Trust,
2014
to
present,
and
the
ETF
Trust,
2020
to
present
Michael
Tanski
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
04/09
Assistant
Vice
President,
Allianz
Investment
Management
LLC,
2013
to
present.
Laura
Quade
(1969)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
08/23
Vice
President,
Allianz
Investment
Management
LLC,
2023
to
present,
previously
Director
at
Wealth
Enhancement
Group,
November
2019
to
November
2022;
Vice
President,
Head
of
Operations
at
Hartford
Funds
2014
to
2019
ANNRPT1223
02/24
The
Allianz
VIP
Fund
of
Funds
are
distributed
by
Allianz
Life
Financial
Services,
LLC.
These
Funds
are
not
FDIC
Insured.
AZL®
MVP
DFA
Multi-Strategy
Fund
Annual
Report
December
31,
2023
Table
of
Contents
AZL®
MVP
DFA
Multi-Strategy
Fund
Management
Discussion
and
Analysis
Page
1
Expense
Examples
and
Portfolio
Composition
Page
3
Schedule
of
Portfolio
Investments
Page
4
Statement
of
Assets
and
Liabilities
Page
5
Statement
of
Operations
Page
5
Statements
of
Changes
in
Net
Assets
Page
6
Financial
Highlights
Page
7
Notes
to
the
Financial
Statements
Page
8
Report
of
Independent
Registered
Public
Accounting
Firm
Page
14
Other
Federal
Income
Tax
Information
Page
15
Other
Information
Page
16
Approval
of
Investment
Advisory
Agreement
Page
17
Information
about
the
Board
of
Trustees
and
Officers
Page
20
This
report
is
submitted
for
the
general
information
of
the
shareholder
of
the
Fund.
The
report
is
not
authorized
for
distribution
to
prospective
investors
in
the
Fund
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
contains
details
concerning
the
sales
charges
and
other
pertinent
information.
1
AZL®
MVP
DFA
Multi-Strategy
Fund
Review
(Unaudited)
Allianz
Investment
Management
LLC
serves
as
the
Manager
for
the
AZL
®
MVP
DFA
Multi-
Strategy
Fund.
What
factors
affected
the
Fund’s
performance
during
the
year
ended
December
31,
2023?*
For
the
year
ended
December
31,
2023,
the
AZL
MVP
DFA
Multi-Strategy
Fund
(the
“Fund”)
returned
13.69%.
That
compared
to
26.29%,
5.53%
and
17.71%
total
return
for
its
benchmarks,
the
S&P
500
Index,
the
Bloomberg
U.S.
Aggregate
Bond
Index,
and
the
Moderate
Composite
Index,
respectively.
1
The
Fund
is
a
fund
of
funds
that
pursues
broad
diversification
across
three
equity
sub-portfolios
subadvised
by
Dimensional
Fund
Advisors
and
one
fixed
income
sub-portfolio
subadvised
by
BlackRock
Financial
Management.
The
fixed-income
sub-portfolio
is
an
enhanced
bond
index
strategy
that
seeks
to
achieve
a
return
that
exceeds
that
of
the
Bloomberg
U.S.
Aggregate
Bond
Index.
Generally,
the
Fund
allocates
50%
to
70%
of
its
assets
to
the
underlying
equity
funds
and
30%
to
50%
of
its
assets
to
the
underlying
AZL
Enhanced
Bond
Index
Fund.
The
Fund
also
employs
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process,
which
is
intended
to
adjust
the
risk
of
the
portfolio
based
on
quantitative
indicators
of
market
risk,
such
as
the
current
level
of
Fund
and
market
volatility.
U.S.
equities,
particularly
large-cap
stocks,
posted
positive
performance
in
2023.
The
gains
were
due
in
part
to
falling
inflation
and
better-than-expected
earnings,
as
well
as
resilient
consumer
demand.
The
European
Central
Bank’s
(ECB)
monetary
tightening
had
a
negative
effect
on
economic
growth
in
the
Eurozone,
and
Russia’s
war
with
Ukraine
continued
to
weigh
on
international
equities.
The
U.S.
fixed
income
market
received
a
boost
after
the
Federal
Reserve
announced
a
possible
end
to
future
interest
rate
hikes.
Most
sectors
of
the
bond
market
finished
with
positive
performance
in
2023.
The
Fund,
which
invests
in
both
U.S.
and
international
markets,
underperformed
its
blended
benchmark
during
the
year
ended
December
31,
2023.
Its
off-benchmark
allocation
to
developed
market
non-U.S.
equities
slightly
detracted
from
relative
performance,
as
these
underperformed
U.S.
equities.
The
Fund’s
off-benchmark
allocation
to
mid-cap
and
small-cap
U.S.
equities
also
slightly
detracted
from
relative
performance,
as
these
underperformed
the
S&P
500
Index.
The
MVP
risk
management
process
uses
derivatives
to
seek
to
control
portfolio
volatility
in
unstable
market
conditions.
The
MVP
process
was
engaged
during
the
year
and
reduced
the
Fund’s
equity
exposure
at
multiple
points
during
the
year.
The
MVP
process
slightly
detracted
from
the
Fund’s
performance
during
2023.
Past
performance
does
not
guarantee
future
results.
*
The
Fund’s
portfolio
composition
is
subject
to
change.
There
is
no
guarantee
that
any
sectors
mentioned
will
continue
to
perform
as
described
or
that
securities
in
such
sectors
will
be
held
by
the
Fund
in
the
future.
The
information
contained
in
this
commentary
is
for
informational
purposes
only
and
should
not
be
construed
as
a
recommendation
to
purchase
or
sell
securities
in
the
sector
mentioned.
The
Fund’s
holdings
and
weightings
are
as
of
December
31,
2023.
1
For
a
complete
description
of
the
Fund’s
performance
benchmarks
please
refer
to
page
2
of
this
report.
2
AZL®
MVP
DFA
Multi-Strategy
Fund
Review
(Unaudited)
Fund
Objective
The
Fund’s
investment
objective
is
to
seek
long-term
capital
appreciation.
This
objective
may
be
changed
by
the
Trustees
of
the
Fund
without
shareholder
approval.
The
Fund
seeks
to
achieve
its
objective
by
investing
in
a
combination
of
underlying
funds
that
represent
different
classes
in
the
Fund’s
asset
allocation.
Investment
Concerns
The
Fund
invests
in
underlying
funds,
so
its
investment
performance
is
directly
related
to
the
performance
of
those
underlying
funds.
Before
investing,
investors
should
assess
the
risks
associated
with
and
types
of
investments
made
by
each
of
the
underlying
funds
in
which
the
Fund
invests.
Stocks
are
more
volatile
and
carry
more
risk
and
return
potential
than
other
forms
of
investments
Quantitative
investing
involves
risk
that
the
values
of
securities
selected
in
the
quantitative
analysis
can
react
differently
than
the
market
or
securities
selected
using
fundamental
analysis.
International
investing
may
involve
risk
of
capital
loss
from
unfavorable
fluctuations
in
currency
values,
from
differences
in
generally
accepted
accounting
principles
or
from
economic
or
political
instability
in
other
nations.
Value-based
investments
are
subject
to
the
risk
that
the
broad
market
may
not
recognize
their
intrinsic
value.
Small-
to
mid-capitalization
companies
typically
have
a
higher
risk
of
failure
and
historically
have
experienced
a
greater
degree
of
volatility.
Investing
in
a
single
industry
or
sector,
or
concentrating
investments
in
a
limited
number
of
industries
or
sectors,
tends
to
increase
the
risk
that
economic,
political,
or
regulatory
developments
affecting
certain
industries
or
sectors
will
have
a
large
impact
on
the
value
of
the
portfolio.
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
Investing
in
derivative
instruments
involves
risks
that
may
be
different
from
or
greater
than
the
risk
associated
with
investing
directly
in
securities
or
other
traditional
instruments.
For
a
complete
description
of
these
and
other
risks
associated
with
investing
in
the
Fund,
please
refer
to
the
Fund’s
prospectus.
Growth
of
$10,000
Investment
The
chart
above
represents
a
comparison
of
a
hypothetical
investment
in
the
Fund
versus
a
similar
investment
in
the
Fund’s
benchmarks
and
represents
the
reinvestment
of
dividends
and
capital
gains
in
the
Fund.
Past
performance
does
not
guarantee
future
results.
The
performance
data
quoted
represents
past
performance
and
current
returns
may
be
lower
or
higher.
The
investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
the
original
cost.
To
obtain
performance
information
current
to
the
most
recent
month
end,
please
visit
www.Allianzlife.com.
The
above
expense
ratio
is
based
on
the
current
Fund
prospectus
dated
May
1,
2023.
The
Manager
and
the
Fund
have
entered
into
a
written
agreement
reducing
the
management
fee
to
0.10%
through
at
least
April
30,
2025.
The
Manager
and
the
Fund
have
entered
into
a
written
contract
limiting
operating
expenses,
excluding
certain
expenses
(such
as
interest
expense
and
acquired
fund
fees
and
expenses),
to
0.15%
through
April
30,
2025.
Additional
information
pertaining
to
the
December
31,
2023
expense
ratio
can
be
found
in
the
Financial
Highlights.
Acquired
fund
fees
and
expenses
are
incurred
indirectly
by
the
Fund
through
the
valuation
of
the
Fund’s
investments
in
the
permitted
Underlying
Funds.
Accordingly,
acquired
fund
fees
and
expenses
affect
the
Fund’s
total
returns.
Because
these
fees
and
expenses
are
not
included
in
the
Fund’s
financial
highlights,
the
Fund’s
total
annual
fund
operating
expenses,
as
shown
in
the
current
prospectus,
do
not
correlate
to
the
ratios
of
expenses
to
average
net
assets
shown
in
the
Financial
Highlights.
Without
acquired
fund
fees
and
expenses
the
Fund’s
gross
expense
ratio
would
be
0.30%.
The
total
return
of
the
Fund
does
not
reflect
the
effect
of
any
insurance
charges,
the
annual
maintenance
fee
or
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Such
charges,
fees
and
tax
payments
would
reduce
the
performance
quoted.
The
Fund’s
performance
is
measured
against
the
Standard
&
Poor’s
500
Index
(“S&P
500”),
the
Bloomberg
U.S.
Aggregate
Bond
Index
and
the
Moderate
Composite
Index
(“Composite”).
The
S&P
500
is
representative
of
500
selected
common
stocks,
most
of
which
are
listed
on
the
New
York
Stock
Exchange,
and
is
a
measure
of
the
U.S.
Stock
market
as
a
whole.
The
Bloomberg
U.S.
Aggregate
Bond
Index
is
a
market
value-
weighted
performance
benchmark
for
investment-grade
fixed-rate
debt
issues,
including
government,
corporate,
asset-backed,
and
mortgage-
backed
securities,
with
maturities
of
at
least
one
year.
The
Composite
is
a
blended
index
comprised
of
(60%)
S&P
500
and
(40%)
Bloomberg
U.S.
Aggregate
Bond
Index.
These
indexes
are
unmanaged
and
do
not
reflect
the
deduction
of
fees
associated
with
a
mutual
fund,
such
as
investment
management
and
fund
accounting
fees.
The
Fund’s
performance
reflects
the
deduction
of
fees
for
services
provided
to
the
Fund.
Investors
cannot
invest
directly
in
an
index.
Average
Annual
Total
Returns
as
of
December
31,
2023
1
Year
3
Years
5
Years
Since
Inception
(4/27/2015)
AZL
®
MVP
DFA
Multi-Strategy
Fund
13.69%
4.50%
6.52%
4.77%
Bloomberg
U.S.
Aggregate
Bond
Index
5.53%
(3.31)%
1.10%
1.20%
Moderate
Composite
Index
17.71%
4.70%
10.09%
7.85%
S&P
500
Index
26.29%
10.00%
15.69%
11.92%
Expense
Ratio
Gross
AZL
®
MVP
DFA
Multi-Strategy
Fund
1.03%
AZL
MVP
DFA
Multi-Strategy
Fund
3
Expense
Examples
(Unaudited)
As
a
shareholder
of
the
AZL
MVP
DFA
Multi-Strategy
Fund
(the
“Fund”),
you
incur
ongoing
costs,
including
management
fees,
distribution
fees,
and
other
Fund
expenses.
These
examples
are
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
Please
note
that
the
expenses
shown
in
each
table
do
not
reflect
expenses
that
apply
to
the
subaccount
or
the
insurance
contract.
If
the
expenses
that
apply
to
the
subaccount
or
the
insurance
contract
were
included,
your
costs
would
have
been
higher.
These
examples
are
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
periods
presented
below.
The
Actual
Expense
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
below,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
table
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
this
period.
The
Hypothetical
Expense
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
DFA
Multi-Strategy
Fund
$1,000.00
$1,059.30
$0.62
0.12%
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
DFA
Multi-Strategy
Fund
$1,000.00
$1,024.60
$0.61
0.12%
*
Expenses
are
equal
to
the
average
account
value
multiplied
by
the
Fund's
annualized
expense
ratio
multiplied
by
184/365
(the
number
of
days
in
the
most
recent
fiscal
half-year
divided
by
the
number
of
days
in
the
fiscal
year).
Portfolio
Composition
(Unaudited)
Investments
Percent
of
Net
Assets
Domestic
Equity
Funds
45
.2
%
Fixed
Income
Fund
37
.7
International
Equity
Fund
12
.2
Total
Investment
Securities
95
.1
Net
other
assets
(liabilities)
4
.9
Net
Assets
100
.0
%
AZL
MVP
DFA
Multi-Strategy
Fund
Schedule
of
Portfolio
Investments
December
31,
2023
4
See
accompanying
notes
to
the
financial
statements.
Percentages
indicated
are
based
on
net
assets
as
of
December
31,
2023
.
Shares
Value
Affiliated
Investment
Companies
(95.1%):
Domestic
Equity
Funds
(45.2%):
35,005,370
AZL
DFA
U.S.
Core
Equity
Fund
$
496,376,149
13,906,335
AZL
DFA
U.S.
Small
Cap
Fund
142,122,745
638,498,894
1
Fixed
Income
Fund
(37.7%):
54,313,869
AZL
Enhanced
Bond
Index
Fund
533,362,197
Shares
Value
Affiliated
Investment
Companies,
continued
International
Equity
Fund
(12.2%):
16,780,617
AZL
DFA
International
Core
Equity
Fund
$
172,336,936
Total
Affiliated
Investment
Companies
(Cost
$1,247,706,197)
1,344,198,027
Total
Investment
Securities
(Cost
$1,247,706,197)
—
95.1%(a)
1,344,198,027
Net
other
assets
(liabilities)
—
4.9%
69,606,043
Net
Assets
—
100.0%
$
1,413,804,070
(a)
See
Federal
Tax
Information
listed
in
the
Notes
to
the
Financial
Statements.
Futures
Contracts
At
December
31,
2023,
the
Fund's
open
futures
contracts
were
as
follows:
Long
Futures
Description
Expiration
Date
Number
of
Contracts
Notional
Amount
Value
and
Unrealized
Appreciation/
(Depreciation)
S&P
500
Index
E-Mini
March
Futures
(U.S.
Dollar)
3/15/24
175
$
42,175,000
$
1,383,637
U.S.
Treasury
10-Year
Note
March
Futures
(U.S.
Dollar)
3/19/24
250
28,222,656
870,933
$
2,254,570
AZL
MVP
DFA
Multi-Strategy
Fund
5
See
accompanying
notes
to
the
financial
statements.
Statement
of
Assets
and
Liabilities
December
31,
2023
Statement
of
Operations
For
the
Year
Ended
December
31,
2023
Assets:
Investments
in
affiliates,
at
cost
$
1,247,706,197
Investments
in
affiliates,
at
value
$
1,344,198,027
Deposit
at
broker
for
futures
contracts
collateral
70,327,658
Interest
and
dividends
receivable
247,377
Receivable
for
affiliated
investments
sold
1,158,809
Receivable
for
variation
margin
on
futures
contracts
217
Prepaid
expenses
6,258
Total
Assets
1,415,938,346
Liabilities:
Cash
overdraft
1,158,809
Payable
for
capital
shares
redeemed
815,778
Management
fees
payable
118,378
Administration
fees
payable
7,288
Custodian
fees
payable
5,690
Administrative
and
compliance
services
fees
payable
1,530
Transfer
agent
fees
payable
693
Trustee
fees
payable
6,349
Other
accrued
liabilities
19,761
Total
Liabilities
2,134,276
Commitments
and
contingent
liabilities^
Net
Assets
$
1,413,804,070
Net
Assets
Consist
of:
Paid
in
capital
$
1,264,250,472
Total
distributable
earnings
149,553,598
Net
Assets
$
1,413,804,070
Shares
of
beneficial
interest
(unlimited
number
of
shares
authorized,
no
par
value)
126,947,265
Net
Asset
Value
(offering
and
redemption
price
per
share)
$
11.14
^
See
Note
3
in
Notes
to
the
Financial
Statements.
Investment
Income:
Dividends
from
affiliates
$
14,618,075
Interest
2,559,628
Dividends
from
non-affiliates
72,927
Total
Investment
Income
17,250,630
Expenses:
Management
fees
2,281,950
Administration
fees
75,644
Custodian
fees
29,266
Administrative
and
compliance
services
fees
14,142
Transfer
agent
fees
6,482
Trustee
fees
45,219
Professional
fees
51,272
Shareholder
reports
10,457
Recoupment
of
prior
expenses
reimbursed
by
the
manager
92,445
Other
expenses
20,663
Total
expenses
before
reductions
2,627,540
Less
Management
fees
contractually
waived
(1,140,954)
Net
expenses
1,486,586
Net
Investment
Income/(Loss)
15,764,044
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments:
Net
realized
gains/(losses)
on
affiliated
underlying
funds
6,928,022
Net
realized
gains
distributions
from
affiliated
underlying
funds
28,957,986
Net
realized
gains/(losses)
on
futures
contracts
4,823,751
Change
in
net
unrealized
appreciation/depreciation
on
affiliated
underlying
funds
96,987,536
Change
in
net
unrealized
appreciation/depreciation
on
futures
contracts
2,267,669
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments
139,964,964
Change
in
Net
Assets
Resulting
From
Operations
$
155,729,008
AZL
MVP
DFA
Multi-Strategy
Fund
6
See
accompanying
notes
to
the
financial
statements.
Statements
of
Changes
in
Net
Assets
For
the
Year
Ended
December
31,
2023
For
the
Year
Ended
December
31,
2022
Change
In
Net
Assets:
Operations:
Net
investment
income/(loss)
$
15,764,044
$
1,800,423
Net
realized
gains/(losses)
on
investments
40,709,759
5,029,133
Change
in
unrealized
appreciation/depreciation
on
investments
99,255,205
(
18,359,440
)
Change
in
net
assets
resulting
from
operations
155,729,008
(
11,529,884
)
Distributions
to
Shareholders:
Distributions
(
2,915,434
)
(
7,022,119
)
Change
in
net
assets
resulting
from
distributions
to
shareholders
(
2,915,434
)
(
7,022,119
)
Capital
Transactions:
Proceeds
from
shares
issued
6,751,576
1,880,038
Proceeds
from
shares
issued
in
merger
1,340,915,610
—
Proceeds
from
dividends
reinvested
2,915,434
7,022,118
Value
of
shares
redeemed
(
168,014,722
)
(
11,906,090
)
Change
in
net
assets
resulting
from
capital
transactions
1,182,567,898
(
3,003,934
)
Change
in
net
assets
1,335,381,472
(
21,555,937
)
Net
Assets:
Beginning
of
period
78,422,598
99,978,535
End
of
period
$
1,413,804,070
$
78,422,598
Share
Transactions:
Shares
issued
665,897
168,171
Shares
issued
in
merger
134,212,030
—
Dividends
reinvested
290,961
734,531
Shares
redeemed
(
16,206,663
)
(
1,108,743
)
Change
in
shares
118,962,225
(
206,041
)
AZL
MVP
DFA
Multi-Strategy
Fund
Financial
Highlights
(Selected
data
for
a
share
of
beneficial
interest
outstanding
throughout
the
periods
indicated.
Does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.)
7
See
accompanying
notes
to
the
financial
statements.
Year
Ended
December
31,
2023
Year
Ended
December
31,
2022
Year
Ended
December
31,
2021
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Net
Asset
Value,
Beginning
of
Period
$9.82
$12.21
$11.58
$12.03
$10.65
Investment
Activities:
Net
Investment
Income/(Loss)(a)
0
.14
0
.23
0
.05
0
.16
0
.31
Net
Realized
and
Unrealized
Gains/(Losses)
on
Investments
1
.21
(
1
.69
)
1
.51
0
.22
1
.36
Total
from
Investment
Activities
1
.35
(
1
.46
)
1
.56
0
.38
1
.67
Distributions
to
Shareholders
From:
Net
Investment
Income
(
0
.02
)
(
0
.11
)
(
0
.17
)
(
0
.34
)
(
0
.11
)
Net
Realized
Gains
(
0
.01
)
(
0
.82
)
(
0
.76
)
(
0
.49
)
(
0
.18
)
Total
Dividends
(
0
.03
)
(
0
.93
)
(
0
.93
)
(
0
.83
)
(
0
.29
)
Net
Asset
Value,
End
of
Period
$11.14
$9.82
$12.21
$11.58
$12.03
Total
Return
(b)
13.69
%
(
11.76
)
%
13.74
%
3
.77
%
15.81
%
Ratios
to
Average
Net
Assets/Supplemental
Data:
Net
Assets,
End
of
Period
(000's)
$1,413,804
$78,423
$99,979
$90,668
$95,959
Net
Investment
Income/(Loss)
1
.38
%
2
.10
%
0
.42
%
1
.44
%
2
.71
%
Expenses
Before
Reductions*(c)
0
.23
%
0
.30
%
0
.29
%
0
.30
%
0
.29
%
Expenses
Net
of
Reductions*
0
.13
%
0
.15
%
0
.15
%
0
.15
%
0
.15
%
Portfolio
Turnover
Rate
18
%
11
%
13
%
18
%
10
%
*
The
expense
ratios
exclude
the
impact
of
fees/expenses
paid
by
each
underlying
fund.
(a)
Calculated
using
the
average
shares
method.
(b)
The
returns
include
reinvested
dividends
and
fund
level
expenses,
but
exclude
insurance
contract
charges. If
these
charges
were
included,
the
returns
would
have
been
lower.
(c)
Excludes
fee
reductions. If
such
fee
reductions
had
not
occurred,
the
ratios
would
have
been
as
indicated.
AZL
MVP
DFA
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
8
1.
Organization
The
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”)
was
organized
as
a
Delaware
statutory
trust
on
June
16,
2004.
The
Trust
is
an
open-end
management
investment
company
registered
under
the
Investment
Company
Act
of
1940,
as
amended,
(the
“1940
Act”)
and
thus
is
determined
to
be
an
investment
company,
and
follows
the
investment
company
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946
“Financial
Services—Investment
Companies”.
The
Trust
consists
of 9
separate
investment
portfolios
(collectively,
the
“Funds”),
of
which
one
is
included
in
this
report,
the
AZL
MVP
DFA
Multi-
Strategy
Fund (the
“Fund”),
and 8
are
presented
in
separate
reports.
The
Fund
is
a
diversified
series
of
the
Trust.
The
Fund
is
a
“fund
of
funds”,
which
means
that
the
Fund
invests
primarily
in
other
mutual
funds
(the
"Underlying
Funds").
Underlying
Funds
invest
in
stocks,
bonds,
and
other
securities
and
reflect
varying
amounts
of
potential
investment
risk
and
reward.
The
Underlying
Funds
record
their
investments
at
fair
value.
Periodically,
the
Fund
will
adjust
its
asset
allocation
as
it
seeks
to
achieve
its
investment
objective.
The
Trust
is
authorized
to
issue
an
unlimited
number
of
shares
of
the
Fund
without
par
value.
Shares
of
the
Fund
are
available
through
the
variable
annuity
contracts
offered
through
the
separate
accounts
of
participating
insurance
companies.
Currently,
the
Fund
only
offers
its
shares
to
separate
accounts
of
Allianz
Life
Insurance
Company
of
North
America
and
Allianz
Life
Insurance
Company
of
New
York,
affiliates
of
the
Trust
and
the
Manager,
as
defined
below.
Under
the
Trust’s
organizational
documents,
its
officers
and
trustees
are
indemnified
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
In
addition,
in
the
normal
course
of
business,
the
Fund
may
enter
into
contracts
with
its
vendors
and
others
that
provide
for
general
indemnifications.
The
Fund’s
maximum
exposure
under
these
arrangements
is
unknown,
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund.
However,
based
on
experience,
the
Fund
expects
that
risk
of
loss
to
be
remote.
2.
Significant
Accounting
Policies
The
following
is
a
summary
of
significant
accounting
policies
followed
by
the
Fund
in
the
preparation
of
its
financial
statements.
The
policies
conform
with
U.S.
generally
accepted
accounting
principles
(“U.S.
GAAP”).
The
preparation
of
financial
statements
requires
management
to
make
certain
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
and
disclosure
of
contingent
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
Security
Valuation
The
Fund
records
its
investments
at
fair
value.
Fair
value
is
defined
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
willing
market
participants
at
the
measurement
date.
The
valuation
techniques
used
to
determine
fair
value
are
further
described
in
Note
4
below.
Investment
Transactions
and
Investment
Income
Investment
transactions
are
accounted
for
on
trade
date.
Net
realized
gains
and
losses
on
investments
sold
and
on
foreign
currency
transactions
are
recorded
on
the
basis
of
identified
cost.
Interest
income
is
recorded
on
the
accrual
basis
and
includes,
where
applicable,
the
amortization
of
premiums
or
accretion
of
discounts.
Dividend
income
is
recorded
on
the
ex-
dividend
date
except
in
the
case
of
foreign
securities,
in
which
case
dividends
are
recorded
as
soon
as
such
information
becomes
available.
Distributions
to
Shareholders
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
The
Fund
distributes
its
dividends
from
net
investment
income
and
net
realized
capital
gains,
if
any,
on
an
annual
basis.
The
amount
of
distributions
from
net
investment
income
and
from
net
realized
gains
is
determined
in
accordance
with
federal
income
tax
regulations,
which
may
differ
from
U.S.
GAAP.
These
“book/tax”
differences
are
either
temporary
or
permanent
in
nature.
To
the
extent
these
differences
are
permanent
in
nature
(e.g.,
return
of
capital,
net
operating
loss,
reclassification
of
certain
market
discounts,
gain/loss,
paydowns,
and
distributions),
such
amounts
are
reclassified
within
the
composition
of
net
assets
based
on
their
federal
tax-basis
treatment;
temporary
differences
(e.g.,
wash
sales
and
differing
treatment
on
certain
investments)
do
not
require
reclassification.
Distributions
to
shareholders
that
exceed
net
investment
income
and
net
realized
gains
for
tax
purposes
are
reported
as
distributions
of
capital.
Expense
Allocation
Expenses
directly
attributable
to
the
Fund
are
charged
directly
to
the
Fund,
while
expenses
attributable
to
more
than
one
Fund
are
allocated
among
the
respective
Funds
based
upon
relative
net
assets
or
some
other
reasonable
method.
Expenses
which
are
attributable
to
more
than
one
Trust
are
allocated
across
the
Allianz
Variable
Insurance
Products
Trust,
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
AIM
ETF
Products
Trust
based
upon
relative
net
assets
or
another
reasonable
basis.
Allianz
Investment
Management
LLC
(the
“Manager”),
serves
as
the
investment
manager
for
the
Trust,
Allianz
Variable
Insurance
Products
Trust
and
AIM
ETF
Products
Trust.
This
report
does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.
Affiliated
Securities
Transactions
Pursuant
to
Rule
17a-7
under
the
1940
Act,
the
Fund
may
engage
in
securities
transactions
with
affiliated
investment
companies
and
advisory
accounts
managed
by
the
Manager.
Any
such
purchase
or
sale
transaction
must
be
effected
without
a
brokerage
commission
or
other
remuneration,
except
for
customary
transfer
fees.
The
transaction
must
be
effected
at
the
current
market
price,
which
is
either
the
security’s
last
sale
price
on
an
exchange
or,
if
there
are
no
transactions
in
the
security
that
day,
at
the
average
of
the
highest
bid
and
lowest
asked
price.
During
the
year
ended
December
31,
2023,
the
Fund
did
not
engage
in
any
Rule
17a-7
transactions.
AZL
MVP
DFA
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
9
Derivative
Instruments
All
open
derivative
positions
at
period
end
are
reflected
on
the
Fund’s
Schedule
of
Portfolio
Investments.
The
following
is
a
description
of
the
derivative
instruments
utilized
by
the
Fund,
including
the
primary
underlying
risk
exposures
related
to
each
instrument
type.
The
Fund’s
allocation
to
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process
may
include
(a)
derivatives
such
as
index
futures,
other
futures
contracts,
options,
and
other
similar
securities
and
(b)
cash,
money
market
equivalents,
short-term
debt
instruments,
money
market
funds,
and
short-term
debt
funds
to
satisfy
all
applicable
margin
requirements
and
to
provide
additional
portfolio
liquidity
to
satisfy
large
redemptions
and
any
margin
calls.
Due
to
the
leverage
provided
by
derivatives,
the
notional
value
of
the
Fund’s
derivative
positions
could
exceed
20%
of
the
Fund’s
value.
The
Fund
may
also
use
futures
to
gain
equity
exposure
and
may
hold
cash
as
a
buffer
in
the
event
of
market
shocks.
Futures
Contracts
During
the
year
ended
December
31,
2023,
the
Fund
invested
in
futures
contracts
to
reduce
volatility
and
limit
the
need
to
decrease
or
increase
allocations
to
underlying
funds.
Futures
contracts
are
valued
based
upon
their
quoted
daily
settlement
prices.
Upon
entering
into
a
futures
contract,
the
Fund
is
required
to
segregate
liquid
assets
in
accordance
with
the
initial
margin
requirements
of
the
broker
or
exchange.
Futures
contracts
are
marked
to
market
daily
and
a
payable
or
receivable
for
the
change
in
value
(“variation
margin”),
if
any,
is
recorded
by
the
Fund.
Gains
or
losses
are
recognized
but
not
considered
realized
until
the
contracts
expire
or
are
closed.
Futures
contracts
involve,
to
varying
degrees,
elements
of
market
risk
(generally
equity
price
risk
related
to
stock
futures,
interest
rate
risk
related
to
bond
futures,
and
foreign
currency
risk
related
to
currency
futures)
and
exposure
to
loss
in
excess
of
the
variation
margin
disclosed
in
the
Statement
of
Assets
and
Liabilities.
The
primary
risks
associated
with
the
use
of
futures
contracts
are
the
imperfect
correlation
between
the
change
in
value
of
the
underlying
securities
and
the
prices
of
futures
contracts,
the
possibility
of
an
illiquid
market,
and
the
inability
of
the
counterparty
to
meet
the
terms
of
the
contract.
For
the
year
ended
December
31,
2023,
the
monthly
average
notional
amount
for
long
contracts
was
$58.7
million.
There
was
no
short
contract
activity
during
the
period.
Realized
gains
and
losses
are
reported
as
“Net
realized
gains/(losses)
on
futures
contracts”
on
the
Statement
of
Operations.
Summary
of
Derivative
Instruments
The
following
is
a
summary
of
the
values
of
derivative
instruments
on
the
Fund’s
Statement
of
Assets
and
Liabilities,
categorized
by
risk
exposure,
as
of
December
31,
2023:
The
following
is
a
summary
of
the
effect
of
derivative
instruments
on
the
Statement
of
Operations,
categorized
by
risk
exposure,
for
the
year
ended
December
31,
2023:
3.
Fees
and
Transactions
with
Affiliates
and
Other
Parties
The
Manager
provides
investment
advisory
and
management
services
for
the
Fund.
The
Manager
has
contractually
agreed
to
waive
fees
and
reimburse
the
Fund
to
limit
the
annual
expenses,
excluding
interest
expense
(e.g.,
cash
overdraft
fees),
taxes,
brokerage
commissions,
acquired
fund
fees
and
expenses,
other
expenditures
that
are
capitalized
in
accordance
with
U.S.
GAAP
and
other
extraordinary
expenses
not
incurred
in
the
ordinary
course
of
the
Fund’s
business,
based
on
the
daily
net
assets
of
the
Fund,
through
April
30,
2025.
Expenses
incurred
for
investment
advisory
and
management
services
are
reflected
on
the
Statement
of
Operations
as
“Management
fees.”
For
the
year
ended
December
31,
2023,
the
annual
rate
due
to
the
Manager
and
the
annual
expense
limit
were
as
follows:
*
The
Manager
waived,
prior
to
any
application
of
expense
limit,
the
management
fee
to
0.10%
on
all
assets
in
order
to
maintain
a
more
competitive
expense
ratio.
The
Manager
reserves
the
right
to
increase
the
management
fee
to
the
amount
shown
in
the
table
above
(i.e.,
discontinue
the
waiver)
at
any
time
after
April
30,
2025.
Any
amounts
contractually
waived
or
remitted
to
the
Fund
by
the
Manager
with
respect
to
the
annual
expense
limit
in
a
particular
fiscal
year
may
be
reimbursed
by
the
Fund
to
the
Manager,
provided
that
such
reimbursement
will
not
cause
the
Fund
to
exceed
the
lesser
of
any
applicable
expense
limit
in
effect
(i)
at
the
time of
the
original
waiver
or
payment
and
(ii)
at
the
time
of
such
reimbursement,
as
supported
by
standard
accounting
practices.
Such
reimbursement
only
applies
to
amounts
waived
or
paid
by
the
Manager
within
Asset
Derivatives
Liability
Derivatives
Primary
Risk
Exposure
Statement
of
Assets
and
Liabilities
Location
Total
Value
Statement
of
Assets
and
Liabilities
Location
Total
Value
Equity
Risk
1,383,637
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$1,383,637
Payable
for
variation
margin
on
futures
contracts*
$—
Interest
Rate
Risk
–
870,933
–
–
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$870,933
Payable
for
variation
margin
on
futures
contracts*
$
—
*
For
futures
contracts,
the
amounts
represent
the
cumulative
appreciation/depreciation
of
these
futures
contracts
as
reported
in
the
Schedule
of
Portfolio
Investments.
Only
the
current
day's
variation
margin,
if
any,
is
reported
within
the
Statement
of
Assets
and
Liabilities
as
Variation
margin
on
futures
contracts.
Primary
Risk
Exposure
Location
of
Gains/(Losses)
on
Derivatives
Recognized
Realized
Gains/(Losses)
on
Derivatives
Recognized
Change
in
Net
Unrealized
Appreciation/Depreciation
on
Derivatives
Recognized
Equity
Risk
(6,160,759)
(1,383,593)
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$
6,160,759
$
1,383,593
Interest
Rate
Risk
1,337,008
(884,076)
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$(1,337,008)
$884,076
Annual
Rate*
Annual
Expense
Limit
AZL
MVP
DFA
Multi-Strategy
Fund
0.2
0
%
0.15%
AZL
MVP
DFA
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
10
the
three
years
prior
to the
date
of
such
reimbursement,
calculated
monthly
from
when
the
waiver
or
payment
was
recorded.
Any
amounts
recouped
by
the
Manager
during
the
period
are
reflected
on
the
Statement
of
Operations
as
“Recoupment
of
prior
expenses
reimbursed
by
the
Manager.”
At
December
31,
2023,
there
were
no
remaining
contractual
reimbursements
subject
to
repayment
by
the
Fund
in
subsequent
years,
and
no
commitment
or
contingent
liability
is
expected.
Management
fees,
which
the
Manager
may
waive
in
order
to
maintain
more
competitive
expense
ratios,
are
not
subject
to
repayment
in
subsequent
years.
Information
on
the
total
amount
waived/reimbursed
by
the
Manager
or
repaid
to
the
Manager
by
the
Fund
during
the
period
can
be
found
on
the
Statement
of
Operations,
as
applicable.
The
Manager
serves
as
the
investment
adviser
of
the
underlying
funds
in
which
the
Fund
invests.
At
December
31,
2023,
these
underlying
funds
are
noted
as
Affiliated
Investment
Companies
in
the
Fund’s
Schedule
of
Portfolio
Investments.
Additional
information,
including
financial
statements,
about
these
Funds
is
available
at
www.allianzlife.com.
The
Manager
is
paid
a
separate
fee
from
the
underlying
funds
for
such
services.
A
summary
of
the
Fund’s
investments
in
affiliated
investment
companies
for
the
year
ended
December
31,
2023
is
as
follows:
*
Including
fund
merger
transactions.
Pursuant
to
separate
agreements
between
the
Trust
and
the
Manager,
the
Manager
provides
a
Chief
Compliance
Officer
(“CCO”)
and
certain
compliance
oversight
and
regulatory
filing
services
to
the
Trust.
Under
these
agreements,
the
Manager
is
entitled
to
an
amount
equal
to
a
portion
of
the
compensation
and
certain
other
expenses
related
to
the
individuals
performing
the
CCO
and
compliance
oversight
services,
as
well
as
$100
per
hour
for
time
incurred
in
connection
with
the
preparation
and
filing
of
certain
documents
with
the
SEC.
The
fees
are
paid
to
the
Manager
on
a
quarterly
basis.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administrative
and
compliance
services
fees.”
Citi
Fund
Services
Ohio,
Inc.
(“Citi”
or
the
“Administrator”),
a
wholly
owned
subsidiary
of
Citigroup,
Inc.,
with
which
an
officer
of
the
Trust
is
affiliated,
serves
as
the
Trust’s
administrator
and
fund
accountant,
and
assists
the
Trust
in
all
aspects
of
its
administration
and
operation.
The
Administrator
is
entitled
to
a
fee,
accrued
daily
and
paid
monthly.
The
Administrator
is
entitled
to
an
annual
fee
for
each
additional
class
of
shares
of
any
Fund,
certain
annual
fees
in
supporting
fair
value
services,
and
a
Trust-wide
annual
fee
for
providing
infrastructure
and
support
in
implementing
the
written
policies
and
procedures
comprising
the
Fund’s
compliance
program.
The
Administrator
is
also
reimbursed
for
certain
expenses
incurred.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administration
fees.”
FIS
Investor
Services
LLC
(“FIS”)
serves
as
the
Fund's
transfer
agent.
Under
the
Transfer
Agent
Agreement,
the
Trust
pays
FIS
a
fee
for
its
services
and
reimburses
FIS
for
all
of
their
reasonable
out-of-pocket
expenses
incurred
in
providing
these
services.
The
Bank
of
New
York
Mellon
(“BNY
Mellon”
or
the
“Custodian”)
serves
as
the
Trust’s
custodian.
For
these
services
as
custodian,
the
Funds
pay
BNY
Mellon
a
fee
based
on
a
percentage
of
assets
held
on
behalf
of
the
Funds,
plus
certain
out-of-pocket
charges.
Allianz
Life
Financial
Services,
LLC
(“ALFS”),
an
affiliate
of
the
Manager,
serves
as
distributor
of
the
Fund.
ALFS
receives
an
annual
Trust-wide
annual
fee
of
$7,500,
paid
by
the
Manager
from
its
profits
and
not
by
the
Trust,
for
recordkeeping
and
reporting
services.
Certain
Officers
and
Trustees
of
the
Trust
are
affiliated
with
the
Manager
or
the
Administrator.
Such
Officers
(except
for
the
Trust’s
CCO
as
noted
above)
and
Trustees
receive
no
compensation
from
the
Trust
for
serving
in
their
respective
roles.
4.
Investment
Valuation
Summary
The
valuation
techniques
employed
by
the
Fund,
as
described
below,
maximize
the
use
of
observable
inputs
and
minimize
the
use
of
unobservable
inputs
in
determining
fair
value.
The
inputs
used
for
valuing
the
Fund’s
investments
are
summarized
in
the
three
broad
levels
listed
below:
•
Level
1
-
quoted
prices
in
active
markets
for
identical
assets
•
Level
2
-
other
significant
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayments
speeds,
credit
risk,
etc.)
•
Level
3
-
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
investments)
Changes
in
valuation
techniques
may
result
in
transfers
in
or
out
of
an
assigned
level
within
the
disclosure
hierarchy.
The
inputs
or
methodology
used
for
valuing
investments
is
not
necessarily
an
indication
of
the
risk
associated
with
investing
in
those
investments.
Value
12/31/22
Purchases
at
Cost
*
Proceeds
from
Sales
Net
Realized
Gains
(Losses)
Change
in
Net
Unrealized
Appreciation
(Depreciation)
Value
12/31/23
Shares
as
of
12/31/23
Dividend
Income
Net
Realized
Gains
Distributions
from
Affiliated
Underlying
Funds
AZL
DFA
Five-Year
Global
Fixed
Income
Fund
$
30
,
138
,
829
$
242
,
020
$
(
30
,
274
,
424
)
$
(4
,
776
,
906)
$
4
,
670
,
481
$
—
—
$
242
,
077
$
—
AZL
DFA
International
Core
Equity
Fund
9,663,475
171
,
187
,
013
(19,047,121)
1,199,421
9,334,148
172,336,936
16,780,617
3,103,423
5,385,284
AZL
DFA
U.S.
Core
Equity
Fund
27,380,862
487
,
446
,
146
(91,442,893)
10,026,211
62,965,823
496,376,149
35,005,370
2,302,583
16,327,
918
AZL
DFA
U.S.
Small
Cap
Fund
7,927,626
142
,
574
,
682
(21,123,976)
1,156,663
11,587,750
142,122,745
13,906,335
357,786
7,244,784
AZL
Enhanced
Bond
Index
Fund
—
546
,
538
,
867
(20,928,637)
(677,367)
8,429,334
533,362,197
54,313,869
8,612,206
—
$
75,110,792
$
1
,
347,988
,
728
$
(
182
,
817
,
051
)
$
6
,
928
,
022
$
96
,
987
,
536
$
1,344,198,027
120,006,19
1
$
14,
618
,
075
$
28,957,
986
AZL
MVP
DFA
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
11
Investments
in
other
investment
companies
are
valued
at
their
published
net
asset
value
(“NAV”).
Security
prices
are
determined
pursuant
to
valuation
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
“Board”
or
“Trustees”)
as
of
the
close
of
the
New
York
Stock
Exchange
(“NYSE”)
(generally
4:00
pm
Eastern
Time).
The
investments
utilizing
Level
1
valuations
represent
investments
in
open-end
investment
companies.
Futures
contracts
are
valued
at
the
settlement
prices
established
each
day
on
the
primary
exchange
and
are
typically
categorized
as
Level
1
in
the
fair
value
hierarchy.
The
Board
has
designated
the
Manager
to
perform
the
Fund’s
fair
value
determinations
in
accordance
with
valuation
procedures
approved
by
the
Board.
The
effect
of
using
fair
value
pricing
is
that
the
Fund’s
NAV
will
be
subject
to
the
judgment
of
the
Manager.
The
Manager’s
fair
valuation
process
is
subject
to
the
oversight
of
the
Board.
The
following
is
a
summary
of
the
valuation
inputs
used
as
of
December
31,
2023
in
valuing
the
Fund’s
investments
based
upon
the
three
levels
defined
above:
5.
Security
Purchases
and
Sales
For
the
year
ended
December
31,
2023,
cost
of
purchases
and
proceeds
from
sales
of
securities
(excluding fund
merger
transactions
and securities
maturing
less
than
one
year
from
acquisition)
were
as
follows:
6.
Investment
Risks
The
risks
below
are
presented
in
an
order
intended
to
facilitate
readability.
Their
order
does
not
imply
that
the
realization
of
one
risk
is
more
likely
to
occur
more
frequently
than
another
risk,
nor
does
it
imply
that
the
realization
of
one
risk
is
likely
to
have
a
greater
adverse
impact
than
another
risk.
The
Fund
may
be
subject
to
other
risks
in
addition
to
these
identified
risks.
This
section
discusses
certain
common
principal
risks
encountered
by
the
Fund.
Derivatives
Risk:
The
Fund
may
invest
directly
or
through
affiliated
or
unaffiliated
mutual
funds
in
derivative
instruments
such
as
futures,
options,
and
options
on
futures.
A
derivative
is
a
financial
contract
whose
value
depends
on,
or
is
derived
from,
the
value
of
an
underlying
asset,
reference
rate,
or
risk.
Use
of
derivative
instruments
involves
risks
different
from,
or
possibly
greater
than,
the
risks
associated
with
investing
directly
in
securities
and
other
traditional
investments.
Derivatives
are
subject
to
a
number
of
other
risks,
such
as
liquidity
risk,
interest
rate
risk,
market
risk,
credit
risk,
and
selection
risk.
Derivatives
also
involve
the
risk
of
mispricing
or
improper
valuation
and
the
risk
that
changes
in
the
value
may
not
correlate
perfectly
with
the
underlying
asset,
rate,
or
index.
Using
derivatives
may
result
in
losses,
possibly
in
excess
of
the
principal
amount
invested.
Also,
suitable
derivative
transactions
may
not
be
available
in
all
circumstances.
The
other
party
to
a
derivatives
contract
could
default.
Foreign
Securities
Risk:
Investing
in
the
securities
of
non-U.S.
issuers
involves
a
number
of
risks,
such
as
fluctuations
in
currency
values,
adverse
political,
social
or
economic
developments,
and
differences
in
social
and
economic
developments
or
policies.
Such
risks
include
future
political
and
economic
developments,
and
the
possible
imposition
of
exchange
controls
or
other
foreign
governmental
laws
and
restrictions.
In
addition,
with
respect
to
certain
countries,
there
is
the
possibility
of
expropriation
of
assets,
confiscatory
taxation,
political
or
social
instability
or
diplomatic
developments
which
could
adversely
affect
investments
in
those
securities.
Certain
foreign
companies
may
be
subject
to
sanctions,
embargoes,
or
other
governmental
actions
that
may
impair
or
otherwise
limit
the
ability
to
invest
in,
receive,
hold
or
sell
the
securities
of
such
companies.
Fund
of
Fund
Risk:
The
Fund,
as
a
shareholder
of
the
underlying
funds,
indirectly
bears
its
proportionate
share
of
any
investment
management
fees
and
other
expenses
of
the
underlying
funds.
Further
due
to
the
fees
and
expenses
paid
by
the
Fund,
as
well
as
small
variations
in
the
Fund’s
actual
allocations
to
the
underlying
funds
and
any
futures
and
cash
held
in
the
Fund’s
portfolio,
the
performance
and
income
distributions
of
the
Fund
will
not
be
the
same
as
the
performance
and
income
distributions
of
the
underlying
funds.
In
addition,
the
Fund
maintains
indirect
exposure
to
various
types
of
risk
which
may
exist
in
the
underlying
Funds,
such
as
foreign
securities
risk,
fixed
income
securities
risk
and
other
risks.
Interest
Rate
Risk:
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
The
price
of
a
bond
is
also
affected
by
its
maturity.
Bonds
with
longer
maturities
generally
have
greater
sensitivity
to
changes
in
interest
rates.
Market
Risk
:
The
market
price
of
securities
owned
by
the
underlying
funds
may
go
up
or
down,
sometimes
rapidly
and
unpredictably.
Securities
may
decline
in
value
due
to
factors
affecting
securities
markets
generally
or
particular
industries
represented
in
the
securities
markets.
The
value
of
a
security
may
decline
due
to
general
market
conditions,
economic
trends
or
events that
are
not
specifically
related
to
a
particular
company,
such
as
real
or
perceived
adverse
economic
conditions,
inflation,
recessions, changes
in
the
general
outlook
for
corporate
earnings,
changes
in
interest
or
currency
rates,
or
adverse
investor
sentiment,
as
well
as
natural
disasters,
and
outbreaks
of
infectious
illnesses
or
other
widespread
public
health
issues.
Quantitative
Investing
Risk:
The
value
of
securities
selected
using
quantitative
analysis
can
react
differently
to
issuer,
political,
market,
and
economic
developments
than
the
market
as
a
whole
or
securities
selected
using
only
fundamental
analysis.
The
factors
used
in
quantitative
analysis
and
the
weight
placed
on
those
factors
may
not
be
predictive
of
a
security's
value.
In
addition,
factors
that
affect
a
security's
value
can
change
over
time
and
these
changes
may
not
be
reflected
in
the
quantitative
model.
A
quantitative
model
can
be
adversely
affected
by
errors
or
imperfections
in
the
factors
or
the
data
on
which
evaluations
are
based,
or
by
technical
issues
with
construction
or
implementation
of
the
model,
which
in
any
case
may
result
in
a
failure
of
the
portfolio
to
perform
as
expected
or
a
failure
to
identify
securities
that
will
perform
well
in
the
future.
Investment
Securities:
Level
1
Level
2
Level
3
Total
Affiliated
Investment
Companies
$
1,344,198,027
$
—
$
—
$
1,344,198,027
Total
Investment
Securities
1,344,198,027
—
—
1,344,198,027
Other
Financial
Instruments:
*
Futures
Contracts
2,254,570
—
—
2,254,570
Total
Investments
$1,346,452,597
$—
$—
$1,346,452,597
*
Other
Financial
Instruments
would
include
any
derivative
instruments,
such
as
futures
contracts. These
investments
are
generally
presented
in
the
Statement
of
Assets
and
Liabilities
at
variation
margin.
Purchases
Sales
AZL
MVP
DFA
Multi-Strategy
Fund
$1,112,656,658
$182,817,051
AZL
MVP
DFA
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
12
7.
Federal
Tax
Information
It
is
the
policy
of
the
Fund
to
continue
to
qualify
as
a
regulated
investment
company
by
complying
with
the
provisions
available
to
certain
investment
companies,
as
defined
under
Subchapter
M
of
the
Internal
Revenue
Code,
and
to
make
distributions
of
net
investment
income
and
net
realized
gains
sufficient
to
relieve
it
from
all,
or
substantially
all,
federal
income
taxes.
Accordingly,
no
provisions
for
federal
income
taxes
are
required
in
the
financial
statements.
Management
of
the
Fund
has
reviewed
tax
positions
taken
in
tax
years
that
remain
subject
to
examination
by
all
major
tax
jurisdictions,
including
federal
(i.e.,
the
last
four
tax
year
ends
and
the
interim
tax
period
since
then,
as
applicable).
Management
believes
that
there
is
no
tax
liability
resulting
from
unrecognized
tax
benefits
related
to
uncertain
tax
positions
taken.
Cost
of
securities,
including
derivatives
and
short
positions
as
applicable,
for
federal
income
tax
purposes
at
December
31,
2023
was
$1,248,316,171.
The
gross
unrealized
appreciation/(depreciation)
on
a
tax
basis
was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2023, was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2022, was
as
follows:
At
December
31,
2023,
the
components
of
accumulated
earnings
on
a
tax
basis
were
as
follows:
8.
Ownership
and
Principal
Holders
The
beneficial
ownership,
either
directly
or
indirectly,
of
more
than
25%
of
the
voting
securities
of
a
fund
creates
presumptions
of
control
of
the
fund,
under
section
2
(a)(9)
of
the
1940
Act.
As
of
December
31,
2023,
the
Fund
had
an
individual
shareholder
account
which
is
affiliated
with
the
Manager
representing
ownership
in
excess
of
85%
of
the
Fund.
Investment
activities
of
this
shareholder
could
have
a
material
impact
to
the
Fund.
As
of
December
31,
2023,
the
Fund
had
a
controlling
interest
(in
excess
of
50%)
in
the
AZL
DFA
U.S.
Core
Equity
Fund,
AZL
DFA
U.S.
Small
Cap
Fund
and
AZL
DFA
International
Core
Equity
Fund,
each
of
which
is
affiliated
with
the
Manager.
9.
Acquisition
of
Funds
Effective
as
of
the
close
of
business
March
10,
2023,
the
Fund
acquired
all
the
assets
and
liabilities
of
the
AZL
MVP
Fusion
Moderate
Fund
(“MVP
Fusion
Moderate
Fund”),
an
open-
end
management
investment
company,
pursuant
to
a
plan
of
reorganization
approved
by
the
Board
on
December
13,
2022
(the
“Plan”).
The
acquisition
was
accomplished
by
a
taxable
exchange
of
157,277,879
shares
of
the
MVP
Fusion
Moderate
Fund
outstanding
as
of
close
of
business
March
10,
2023,
valued
at
$1,340,915,610
for
134,212,030
shares
of
the
Fund.
At
the
close
of
business
March
10,
2023,
the
MVP
Fusion
Moderate
Fund’s
investment
holdings
had
a
fair
value
of
$1,281,321,873
and
identified
cost
of
$1,287,826,325.
For
financial
reporting
purposes,
assets
received
and
shares
issued
by
the
Fund
were
recorded
at
fair
value,
including
the
cost
basis
of
investments
received.
All
fees
and
expenses
incurred
by
the
MVP
Fusion
Moderate
Fund
and
the
Fund
directly
in
connection
with
the
Plan
were
borne
by
the
Manager.
There
are
no
material
differences
in
accounting
policies
of
the
MVP
Fusion
Moderate
Fund
as
compared
to
those
of
the
Fund.
Unrealized
appreciation
$95,881,856
Unrealized
(depreciation)
—
Net
unrealized
appreciation/(depreciation)
$95,881,856
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
DFA
Multi-Strategy
Fund
$2,117,611
$797,823
$2,915,434
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
DFA
Multi-Strategy
Fund
$3,205,864
$3,816,255
$7,022,119
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Undistributed
Ordinary
Income
Undistributed
Long-Term
Capital
Gains
Accumulated
Capital
and
Other
Losses
Unrealized
Appreciation/
Depreciation(a)
Total
Accumulated
Earnings/
(Deficit)
AZL
MVP
DFA
Multi-Strategy
Fund
$29,502,868
$28,673,836
$—
$95,881,856
$154,058,560
(a)
The
differences
between
book-basis
and
tax-basis
unrealized
appreciation/(depreciation)
are
attributable
primarily
to
tax
deferral
of
losses
on
wash
sales,
mark-to-market
of
futures
contracts
and
straddles.
AZL
MVP
DFA
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
13
Assuming
the
acquisition
had
been
completed
on
January
1,
2023,
the
beginning
of
the
annual
reporting
period
of
the
Fund,
the
Fund’s
pro
forma
results
of
operations
for
the year
ended
December
31,
2023,
are
as
follows:
Because
the
combined
investment
portfolios
have
been
managed
as
a
single
integrated
portfolio
since
the
acquisition
was
completed,
it
is
not
practicable
to
separate
the
amounts
of
revenue
and
earnings
of
the
MVP
Fusion
Moderate
Fund
that
have
been
included
in
the
Fund’s
Statement
of
Operations
subsequent
to
March
10,
2023.
The
Fund
did
not
purchase
or
sell
securities
following
the
acquisition
for
purposes
of
realigning
its
investment
portfolio.
Accordingly,
the
acquisition
of
the
MVP
Fusion
Moderate
Fund
did
not
affect
the
Fund’s
portfolio
turnover
ratio
for
the year
ended December
31,
2023.
10.
Recent
Regulatory
Pronouncements
Effective
January
24,
2023,
the
SEC
adopted
rule
and
form
amendments
that
require
open-end
management
investment
companies
to
transmit
concise
and
visually
engaging
annual
and
semi-annual
reports
to
shareholders
that
highlight
key
information.
Other
information,
including
financial
statements,
will
no
longer
appear
in
a
tailored
shareholder
report
but
must
be
available
online,
delivered
free
of
charge
upon
request,
and
filed
on
a
semi-annual
basis
on
Form
N-CSR.
The
rule
and
form
amendments
have
a
compliance
date
of
July
24,
2024.
Accordingly,
the
rule
and
form
amendments
will
not
impact
the
Fund
until
the
2024
semi-annual
shareholder
report
and
will
have
no
effect
on
the
Fund’s
accounting
policies
or
financial
statements.
11.
Subsequent
Events
Management
of
the
Fund
has
evaluated
the
need
for
additional
disclosures
or
adjustments
resulting
from
events
through
the
date
the
financial
statements
were
issued.
Based
on
this
evaluation,
there
were
no
subsequent
events
to
report
that
would
have
material
impact
on
the
Fund’s
financial
statements.
Net
investment
income/(loss)
$
23,971,200
Net
realized/unrealized
gains/(losses)
164,715,204
Change
in
net
assets
resulting
from
operations
$188,686,404
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
14
To
the
Board
of
Trustees
of
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
Shareholders
of
AZL
MVP
DFA
Multi-Strategy
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
schedule
of
portfolio
investments,
of
AZL
MVP
DFA
Multi-Strategy
Fund
(one
of
the
funds
constituting
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust,
referred
to
hereafter
as
the
"Fund")
as
of
December
31,
2023,
the
related
statement
of
operations
for
the
year
ended
December
31,
2023,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2023,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2023
by
correspondence
with
the
transfer
agent
and
brokers.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
/s/
PricewaterhouseCoopers
LLP
New
York,
New
York
February
22,
2024
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Allianz
Variable
Insurance
Products
complex
since
2018.
15
Other
Federal
Income
Tax
Information
(Unaudited)
For
the
year
ended
December
31,
2023,
25.69%
of
the
total
ordinary
income
dividends
paid
by
the
Fund
qualify
for
the
corporate
dividends
received
deductions
available
to
corporate
shareholders.
During
the
year
ended
December
31,
2023,
the
Fund
declared
net
long-term
capital
gain
distributions
of
$797,823.
16
Other
Information
(Unaudited)
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities
is
available,
without
charge,
upon
request,
by
visiting
the
Securities
and
Exchange
Commission’s
(‘‘Commission’’)
website
at
www.sec.gov,
or
by
calling
800-624-0197.
Information
regarding
how
the
Fund
voted
proxies
relating
to
portfolio
securities
during
the
most
recent
12-month
period
ended
June
30th
is
available
(i)
without
charge,
upon
request,
by
calling
800-624-0197;
(ii)
on
the
Trust’s
website
at
https://www.allianzlife.com;
and
(iii)
on
the
Commission’s
website
at
http://www.sec.gov
.
The
Fund
files
complete
Schedules
of
Portfolio
Holdings
with
the
Commission
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Schedules
of
Portfolio
Holdings
for
the
Fund
are
available
without
charge
on
the
Commission’s
website
at
http://www.sec.gov,
or
may
be
obtained
by
calling
800-624-0197.
17
Approval
of
Investment
Advisory
Agreement
(Unaudited)
Subject
to
the
general
supervision
of
the
Board
of
Trustees
(the
“Board”)
and
in
accordance
with
the
investment
objectives
and
restrictions
of
each
separate
series
(each
a
“Fund,”
together,
the
“Funds”)
of
the
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”),
investment
advisory
services
are
provided
to
the
Funds
by
Allianz
Investment
Management
LLC
(the
“Manager”).
The
Manager
manages
each
Fund
pursuant
to
an
investment
management
agreement
(the
“Management
Agreement”)
with
the
Trust
in
respect
of
each
such
Fund.
The
Management
Agreement
provides
that
the
Manager,
subject
to
the
supervision
and
approval
of
the
Board,
is
responsible
for
the
management
of
each
Fund.
For
management
services,
each
Fund
pays
the
Manager
an
investment
advisory
fee
based
upon
each
Fund’s
average
daily
net
assets.
The
Manager
has
contractually
agreed
to
limit
the
expenses
of
each
Fund
by
reimbursing
the
Fund
if
and
when
total
Fund
operating
expenses
exceed
certain
amounts
until
at
least
April
30,
2025
(the
“Expense
Limitation
Agreement”).
In
reviewing
the
services
provided
by
the
Manager
and
the
terms
of
the
Management
Agreement,
the
Board
receives
and
reviews
information
related
to
the
Manager’s
experience
and
expertise
in
the
variable
insurance
marketplace.
In
addition,
the
Board
receives
information
regarding
the
Manager’s
expertise
with
regard
to
portfolio
diversification
and
asset
allocation
requirements
within
variable
insurance
products
issued
by
Allianz
Life
Insurance
Company
of
North
America
(“Allianz
Life”)
and
its
subsidiary,
Allianz
Life
Insurance
Company
of
New
York
(“Allianz
of
New
York”).
Currently,
the
Funds
are
offered
only
through
Allianz
Life
and
Allianz
of
New
York
variable
products,
and
not
in
the
retail
fund
market.
As
required
by
the
Investment
Company
Act
of
1940
(the
“1940
Act”),
the
Board
has
reviewed
and
approved
the
Management
Agreement
with
the
Manager.
The
Board’s
decision
to
approve
this
contract
reflects
the
exercise
of
its
business
judgment
on
whether
to
approve
new
arrangements
and
continue
the
existing
arrangements.
During
its
review
of
the
contract,
the
Board
considered
many
factors,
among
the
most
material
of
which
are:
the
Fund’s
investment
objectives
and
long-term
performance;
the
Manager’s
management
philosophy,
personnel,
processes
and
investment
performance,
including
its
compliance
history
and
the
adequacy
of
its
compliance
processes;
the
preferences
and
expectations
of
Fund
shareholders
(and
underlying
contract
owners)
and
their
relative
sophistication;
the
continuing
state
of
competition
in
the
mutual
fund
industry;
and
comparable
fees
in
the
mutual
fund
industry.
The
Board
also
considered
the
compensation
and
benefits
received
by
the
Manager.
This
includes
fees
received
for
services
provided
to
a
Fund
by
employees
of
the
Manager
or
of
affiliates
of
the
Manager
and
research
services
received
by
the
Manager
from
brokers
that
execute
Fund
trades,
as
well
as
advisory
fees.
The
Board
considered
the
fact
that:
(1) the
Manager
and
the
Trust
are
parties
to
an
Administrative
Services
Agreement
and
a
Compliance
Services
Agreement,
under
which
the
Manager
is
compensated
by
the
Trust
for
performing
certain
administrative
and
compliance
services
including
providing
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer;
and
(2) Allianz
Life
Financial
Services,
LLC,
an
affiliated
person
of
the
Manager,
is
a
registered
securities
broker-dealer
and
received
(along
with
its
affiliated
persons)
payments
made
by
the
underlying
funds
pursuant
to
Rule 12b1.
The
Board
is
aware
that
various
courts
have
interpreted
provisions
of
the
1940
Act
and
have
indicated
in
their
decisions
that
the
following
factors
may
be
relevant
to
an
adviser’s
compensation:
the
nature,
extent
and
quality
of
the
services
provided
by
the
adviser,
including
the
performance
of
the
fund;
the
adviser’s
cost
of
providing
the
services;
the
extent
to
which
the
adviser
may
realize
“economies
of
scale”
as
the
fund
grows
larger;
any
indirect
benefits
that
may
accrue
to
the
adviser
and
its
affiliates
as
a
result
of
the
adviser’s
relationship
with
the
fund;
performance
and
expenses
of
comparable
funds;
the
profitability
of
acting
as
adviser
to
the
fund;
and
the
extent
to
which
the
independent
Board
members,
who
are
not
“interested
persons”
of
a
fund
as
defined
by
the
1940
Act
(“Independent
Trustees”),
are
fully
informed
about
all
facts
bearing
on
the
adviser’s
services
and
fees.
The
Board
is
aware
of
these
factors
and
takes
them
into
account
in
its
review
of
the
Management
Agreement
for
the
Funds.
Each
member
of
the
Board
considered
and
weighed
these
factors
in
light
of
his
or
her
experience
in
governing
the
Trust.
The
Board
is
assisted
in
its
deliberations
by
the
advice
of
independent
legal
counsel
to
the
Independent
Trustees
(“Independent
Trustee
Counsel”).
In
this
regard,
the
Board
requests
and
receives
a
significant
amount
of
information
about
the
Funds
and
the
Manager.
Some
of
this
information
is
provided
at
each
regular
meeting
of
the
Board;
additional
information
is
provided
in
connection
with
the
particular
meetings
at
which
the
Board’s
formal
review
of
the
Management
Agreement
occurs.
In
between
regularly
scheduled
meetings,
the
Board
may
receive
information
on
particular
matters
as
the
need
arises.
Thus,
the
Board’s
evaluation
of
the
Management
Agreement
is
informed
by
reports
covering
such
matters
as:
the
Manager’s
investment
philosophy,
personnel
and
processes,
and
the
Fund’s
investment
performance
(in
absolute
terms
as
well
as
in
relationship
to
its
benchmark
and
certain
competitor
or
“peer
group”
funds).
In
connection
with
comparing
the
performance
of
each
Fund
versus
its
benchmark,
the
Board
receives
reports
on
the
extent
to
which
the
Fund’s
performance
may
be
attributed
to
various
applicable
factors,
such
as
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
rebalancing
decisions,
and
the
impact
of
cash
positions
and
Fund
fees
and
expenses.
The
Board
also
receives
reports
on
the
Funds’
expenses
(including
the
advisory
fee
itself
and
the
overall
expense
structure
of
the
Funds,
both
in
absolute
terms
and
relative
to
peer
group
and/or
competing
funds,
with
due
regard
for
the
Expense
Limitation
Agreement
and
additional
voluntary
expense
limitations);
the
use
and
allocation
of
any
brokerage
commissions
derived
from
trading
the
Funds’
portfolio
securities;
the
nature,
extent
and
quality
of
the
advisory
and
other
services
provided
to
the
Fund
by
the
Manager
and
its
affiliates;
compliance
and
audit
reports
concerning
the
Funds
and
the
companies
that
service
them;
and
relevant
developments
in
the
mutual
fund
industry
and
how
the
Funds
and/or
the
Manager
are
responding
to
them.
The
Board
also
receives
financial
information
about
the
Manager,
including
reports
on
the
compensation
and
benefits
the
Manager
derives
from
its
relationships
with
the
Funds.
These
reports
cover
not
only
the
fees
under
the
Management
Agreement,
but
also
the
fees,
if
any,
received
for
providing
other
services
to
the
Funds.
The
reports
also
discuss
any
indirect
or
“fall-out”
benefits
the
Manager
or
its
affiliates
may
derive
from
their
relationships
with
the
Funds.
The
Management
Agreement
was
most
recently
considered
at
Board
meetings
held
in
the
summer
and
fall
of
2023.
Information
relevant
to
the
approval
of
the
Management
Agreement
was
considered
at
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
as
well
as
at
various
other
meetings
preceding
those
meetings.
Accordingly,
the
Management
Agreement
was
approved
by
the
Board
at
an
in-person
meeting
on
September
19,
2023.
At
such
meeting
the
Board
also
approved
the
Expense
Limitation
Agreement
between
the
Manager
and
the
Trust
for
the
period
ending
April 30,
2025.
In
connection
with
such
meetings,
the
Board
requested
and
evaluated
extensive
materials
from
the
Manager,
including
performance
and
expense
information
for
other
investment
companies
with
similar
investment
objectives
derived
from
data
compiled
by
an
independent
third-party
provider
and
other
sources
believed
to
be
reliable
by
the
Manager
and
the
Trustees.
Prior
to
voting,
the
Trustees
reviewed
the
proposed
approval
of
the
Management
Agreement
with
management
and
with
Independent
Trustee
Counsel
and
received
a
memorandum
from
such
counsel
discussing
the
legal
standards
for
their
consideration
of
the
proposed
approval.
The
Independent
Trustees
also
discussed
the
proposed
approval
in
private
sessions
with
Independent
Trustee
Counsel
at
which
no
representatives
of
the
Manager
were
present.
In
reaching
their
determinations
relating
to
the
approval
of
the
Management
Agreement,
in
respect
of
each
Fund,
each
member
of
the
Board
considered
all
factors
he
or
she
believed
relevant.
The
Board
based
its
decision
to
approve
18
the
Management
Agreement
on
the
totality
of
the
circumstances
and
relevant
factors,
and
with
a
view
to
past
and
future
long-term
considerations.
Not
all
of
the
factors
and
considerations
discussed
above
and
below
are
necessarily
relevant
to
every
Fund,
and
the
Board
did
not
assign
relative
weights
to
factors
discussed
herein
or
deem
any
one
or
group
of
them
to
be
controlling
in
and
of
themselves.
Shareholder
reports
must
include
a
discussion
of
certain
factors
relating
to
the
selection
of
the
investment
adviser
and
the
approval
of
the
advisory
fee.
The
“factors”
enumerated
by
the
SEC
are
set
forth
below
in
italics,
as
well
as
the
Board’s
conclusions
regarding
such
factors:
(1)
The
nature,
extent
and
quality
of
services
provided
by
the
Manager.
The
Trustees
noted
that
the
Manager,
subject
to
the
oversight
of
the
Board,
administers
each
Fund’s
business
and
other
affairs.
The
Trustees
noted
that
the
Manager
also
provides
the
Trust
and
each
Fund
with
such
administrative
and
other
services
(exclusive
of,
and
in
addition
to,
any
such
services
provided
by
any
other
service
providers
retained
by
the
Trust
on
behalf
of
the
Funds)
and
executive
and
other
personnel
as
are
necessary
for
the
operation
of
the
Trust
and
the
Funds.
Except
for
the
Trust’s
Chief
Compliance
Officer
and
certain
compliance
staff,
the
Manager
pays
all
of
the
compensation
of
Trustees
and
officers
of
the
Trust
who
are
employees
of
the
Manager
or
its
affiliates.
The
Board
considered
the
scope
and
quality
of
services
provided
by
the
Manager
and
noted
that
the
scope
of
the
services
provided
has
continued
to
expand
as
a
result
of
regulatory
and
other
developments.
The
Board
noted,
for
example,
that
the
Manager
is
responsible
for
maintaining
and
monitoring
its
own
compliance
program,
and
this
compliance
program
has
been
continuously
refined
and
enhanced
in
light
of
new
regulatory
requirements.
The
Board
considered
the
capabilities
and
resources
which
the
Manager
has
dedicated
to
performing
services
on
behalf
of
the
Trust
and
its
Funds.
The
quality
of
administrative
and
other
services,
including
the
Manager’s
role
in
coordinating
the
activities
of
the
Trust’s
other
service
providers,
also
were
considered.
The
Board
concluded
that,
overall,
they
were
satisfied
with
the
nature,
extent
and
quality
of
services
provided
(and
expected
to
be
provided)
to
the
Trust
and
to
each
of
the
Funds
under
the
Management
Agreement.
(2)
The
investment
performance
of
the
Funds
and
the
Manager.
In
connection
with
every
quarterly
Board
meeting
and
the
summer
and
fall
2023
contract
review
process,
Trustees
received
extensive
information
on
the
performance
results
of
each
Fund.
This
included,
for
example,
performance
information
on
absolute
total
return,
performance
versus
the
appropriate
benchmark(s)
and
performance
versus
peer
groups
as
reported
by
Lipper,
the
contribution
to
performance
of
the
Manager’s
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
and
the
impact
on
performance
of
rebalancing
decisions,
cash
and
Fund
fees.
This
included
Lipper
performance
information
on
the
Funds
for
the
previous
quarter,
and
previous
one-,
three-
and
five-year
periods,
to
the
extent
available.
For
example,
in
connection
with
the
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
the
Manager
reported
that,
for
the
five-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
reported
that
for
the
three-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
four
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
also
reported
on
the
performance
of
the
MVP
Funds
compared
to
custom
managed-volatility
peer
groups.
For
the
five-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
middle
20%
of
its
respective
custom
managed-volatility
peer
group.
For
the
three-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%
and
three
were
in
the
middle
20%
of
their
respective
custom
managed-volatility
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
bottom
40%
of
its
respective
custom
managed-volatility
peer
group.
The
Board
members
discussed
with
the
Manager
and
considered
the
impact
of
the
volatility
management
strategies
on
performance
in
different
market
environments,
where
applicable,
and
considered
whether
they
were
operating
as
intended.
The
Board
noted,
in
particular,
the
impact
on
longer-term
performance
of
certain
characteristics
of
the
Funds’
volatility
management
strategies
in
relation
to
volatility
experienced
as
a
result
of
the
COVID-19
pandemic,
and
that
relative
performance
had
improved
as
the
markets
stabilized.
At
the
Board
meeting
held
September
19,
2023,
the
Board
also
received
updated
performance
information
for
the
Funds,
including
updated
Lipper
peer
group
ranking
information,
for
various
periods
ending
June
30,
2023.
At
the
Board
meeting
held
September
19,
2023,
the
Trustees
determined
that
the
investment
performance
of
the
Funds
was
acceptable.
(3)
The
costs
of
services
to
be
provided
and
profits
to
be
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Funds.
The
Board
considered
that
the
Manager
receives
an
advisory
fee
from
each
of
the
Funds.
The
Manager
reported
that
for
the
four
MVP
Index
Strategy
Funds,
the
advisory
fee
paid
was
in
the
31st
percentile
of
the
customized
peer
group,
and
for
the
AZL
Balanced
Index
Strategy
Fund,
the
advisory
fee
paid
was
in
the
8th
percentile
of
the
customized
peer
group.
The
Manager
reported
that
for
the
AZL
DFA
Multi-Strategy
Fund,
the
advisory
fee
paid
was
in
the
6th
percentile.
The
Manager
reported
that
for
the
AZL
MVP
DFA
Multi-Strategy,
AZL
MVP
FIAM
Multi-Strategy,
and
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Funds,
the
advisory
fee
paid
was
in
the
1st
percentile.
(A
lower
percentile
reflects
lower
fund
fees
and
is
better
for
fund
shareholders.)
Trustees
were
provided
with
information
on
the
total
expense
ratios
of
the
Funds
and
other
funds
in
the
customized
peer
groups,
and
the
Manager
reported
upon
the
challenges
in
making
peer
group
comparisons
for
the
Funds.
The
Board
further
considered
and
found
that
the
advisory
fee
paid
to
the
Manager
with
respect
to
each
Fund
was
based
on
services
provided
to
the
Fund
that
were
in
addition
to,
rather
than
duplicative
of,
the
services
provided
pursuant
to
the
advisory
agreements
for
the
underlying
funds
in
which
the
Fund
invests.
The
Manager
provided
information
concerning
the
profitability
of
the
Manager’s
investment
advisory
activities
for
the
period
from
2020
through
2022.
The
Board
recognized
that
it
is
difficult
to
make
comparisons
of
profitability
from
investment
company
advisory
agreements
because
comparative
information
is
not
generally
publicly
available
and
is
affected
by
numerous
factors,
including
the
structure
of
the
particular
adviser,
the
types
of
funds
it
manages,
its
business
mix,
numerous
assumptions
regarding
allocation
of
expenses
and
the
adviser’s
capital
structure
and
cost
of
capital.
In
considering
profitability
information,
the
Board
considered
the
possible
effect
of
certain
fall-out
benefits
to
the
Manager
and
its
affiliates.
The
Board
focused
on
profitability
of
the
Manager’s
relationships
with
the
Funds
before
taxes
and
distribution
expenses.
The
Board
recognized
that
the
Manager
should
earn
a
reasonable
level
of
profits
for
the
services
it
provides
to
each
Fund.
(4)
and
(5)
The
extent
to
which
economies
of
scale
would
be
realized
as
the
Funds
grow,
and
whether
fee
levels
reflect
these
economies
of
scale.
The
Board
noted
that
the
advisory
fee
schedules
for
the
Funds
do
not
contain
breakpoints
that
reduce
the
fee
rate
on
assets
above
specified
levels.
The
Board
recognized
that
breakpoints
may
be
an
appropriate
way
for
the
Manager
to
share
its
economies
of
scale,
if
any,
with
Funds
that
have
substantial
assets.
The
Board
found
there
was
no
uniform
methodology
for
establishing
breakpoints
that
give
effect
to
Fund-specific
services
provided
by
the
Manager.
The
Board
noted
that
in
the
fund
industry
as
a
whole,
as
well
as
among
funds
similar
to
the
Funds,
there
is
no
uniformity
or
pattern
in
the
fees
and
asset
levels
at
which
breakpoints
(if
any)
apply.
Depending
on
the
age,
size,
and
other
characteristics
of
a
particular
fund
and
its
manager’s
cost
structure,
different
conclusions
can
be
drawn
as
to
whether
there
are
economies
of
scale
to
be
realized
at
any
particular
level
of
assets,
notwithstanding
the
intuitive
conclusion
that
such
economies
exist,
or
will
be
realized
at
some
level
of
total
assets.
Moreover,
because
different
managers
have
different
cost
structures
and
service
models,
it
is
difficult
to
draw
meaningful
19
conclusions
from
the
breakpoints
that
may
have
been
adopted
by
other
funds.
The
Board
also
noted
that
the
advisory
agreements
for
many
funds
do
not
have
breakpoints
at
all,
or
if
breakpoints
exist,
they
may
be
at
asset
levels
significantly
greater
than
those
of
the
individual
Funds.
The
Board
noted
that
the
total
assets
in
all
of
the
Funds,
as
of
June
30,
2023,
were
approximately
$7.8 billion
and
that
the
largest
Fund,
the
AZL
MVP
Growth
Index
Strategy
Fund,
had
assets
of
approximately
$2.0 billion.
The
Board
noted
that
the
Manager
has
agreed
to
temporarily
limit
Fund
expenses
under
the
Expense
Limitation
Agreement,
which
has
the
effect
of
reducing
expenses
similar
to
implementation
of
advisory
fee
breakpoints.
The
Manager
has
committed
to
continue
to
consider
the
continuation
of
expense
limits
and/or
advisory
fee
breakpoints
as
Fund
assets
change.
The
Board
receives
quarterly
reports
on
the
level
of
Fund
assets.
The
Board
expects
to
continue
to
consider:
(a) the
extent
to
which
economies
of
scale
have
been
realized,
and
(b) whether
the
advisory
fee
should
be
modified,
either
in
connection
with
the
next
renewal
of
the
Management
Agreement
or
by
modifying
the
Expense
Limitation
Agreement,
to
reflect
such
economies
of
scale,
if
any.
Having
taken
these
factors
into
account,
the
Board
concluded
that
the
absence
of
breakpoints
in
the
Funds’
advisory
fee
rate
schedules
was
acceptable
under
each
Fund’s
circumstances.
In
conclusion,
after
full
consideration
of
the
above
factors,
as
well
as
such
other
factors
as
each
member
of
the
Board
considered
instructive
in
evaluating
the
Management
Agreement,
the
Board
concluded
that
the
advisory
fees
were
reasonable,
and
that
the
continuation
of
the
Management
Agreement
was
in
the
best
interest
of
the
Funds.
20
Information
about
the
Board
of
Trustees
and
Officers
(Unaudited)
The
Trust
is
managed
by
the
Trustees
in
accordance
with
the
laws
of
the
state
of
Delaware
governing
business
trusts.
In
addition
to
serving
on
the
Board
of
Trustees
of
the
Trust,
each
Trustee
serves
on
the
Board
of
the
Allianz
Variable
Insurance
Products
Trust
(“VIP
Trust”)
and
the
AIM
ETF
Products
Trust
(“ETF
Trust”)
(collectively,
the
Trust,
the
VIP
Trust,
and
ETF
Trust
are
the
“AIM
Complex”).
There
are
currently
six
Trustees,
one
of
whom
is
an
“interested
person”
of
the
Trust
within
the
meaning
of
that
term
under
the
1940
Act.
The
Trustees
and
Officers
of
the
Trust,
their
addresses,
years
of
birth,
their
positions
held
with
the
Trust,
their
terms
of
office
with
the
Trust
and
length
of
time
served,
their
principal
occupation(s)
during
the
past
five
years,
the
number
of
portfolios
in
the
Trust
they
oversee,
and
their
other
directorships
held
during
the
past
five
years
are
as
follows:
Independent
Trustees
(
1)
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Peggy
L.
Ettestad
(1957)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Lead
Independent
Trustee
Since
10/14
(Trustee
since
2/07)
Managing
Director,
Red
Canoe
Management
Consulting
LLC,
2008
to
present
56
None
Tamara
Lynn
Fagely
(1958)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Chief
Operations
Officer,
Hartford
Funds,
2012
to
2013
56
Diamond
Hill
Funds
(10
Funds)
Richard
H.
Forde
(1953)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Member
of
the
Board
and
Chairman
of
the
Finance
and
Investment
Committee,
Connecticut
Water
Service,
Inc.,
2013
to
2019
56
Connecticut
Water
Service,
Inc.
Jack
Gee
(1959)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
01/22
Retired;
previously,
Managing
Director,
BlackRock,
Inc.,
Treasurer
and
Chief
Financial
Officer
U.S.
iShares,
2004
to
2019
56
TCW
ETF
Trust
(3
Funds);
Esoterica
Thematic
Trust
(2019
-
2020)
Claire
R.
Leonardi
(1955)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
02/04
Retired;
previously,
CEO,
Health
eSense
Inc.
(a
medical
device
company),
2015
to
2018,
and
Connecticut
Innovations,
Inc.
(a
venture
capital
firm),
2012
to
2015
56
None
21
Interested
Trustee
(
3)
(1)
Each
of
the
Independent
Trustees
is
a
member
of
the
Audit
and
Operational
Risk
Oversight
Committee.
(2)
Indefinite.
(3)
Is
an
“interested
person,”
as
defined
by
the
1940
Act,
due
to
employment
by
Allianz
Life
and
the
Manager.
Officers
(1)
Indefinite.
(2)
The
Manager
and
the
Trust
are
parties
to
a
Compliance
Services
Agreement
under
which
the
Manager
provides
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer.
The
Fund’s
Statement
of
Additional
Information
(“SAI”)
contains
additional
information
about
the
Trust’s
Trustees
and
Officers.
The
SAI
is
available
without
charge,
upon
request,
by
calling
toll-free
800-624-0197
or
at
https://www.allianzlife.com.
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
06/11
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
56
None
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(1)
/
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
President
Since
11/10
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
Amanda
Farren
(1978)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Secretary
Since
02/24
Chief
Legal
Officer,
Allianz
Investment
Management
LLC;
Senior
Counsel,
Allianz
Life,
January
2024
to
present;
Senior
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2023;
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2015
-2023
Bashir
C.
Asad
(1963)
Citi
Fund
Services
Ohio,
Inc.
4400
Easton
Commons,
Suite
200
Columbus,
OH
43219
Treasurer,
Principal
Accounting
Officer
and
Principal
Financial
Officer
Since
06/16
Senior
Vice
President,
Citi
Fund
Services
Ohio,
Inc.,
2011
to
present
Chris
R.
Pheiffer
(1968)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Chief
Compliance
Officer
(2)
and
Anti-Money
Laundering
Compliance
Officer
Since
02/14
Chief
Compliance
Officer
of
the
Trust
and
the
VIP
Trust,
2014
to
present,
and
the
ETF
Trust,
2020
to
present
Michael
Tanski
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
04/09
Assistant
Vice
President,
Allianz
Investment
Management
LLC,
2013
to
present.
Laura
Quade
(1969)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
08/23
Vice
President,
Allianz
Investment
Management
LLC,
2023
to
present,
previously
Director
at
Wealth
Enhancement
Group,
November
2019
to
November
2022;
Vice
President,
Head
of
Operations
at
Hartford
Funds
2014
to
2019
ANNRPT1223
02/24
The
Allianz
VIP
Fund
of
Funds
are
distributed
by
Allianz
Life
Financial
Services,
LLC.
These
Funds
are
not
FDIC
Insured.
AZL®
MVP
Fidelity
Institutional
Asset
Management
Multi-Strategy
Fund
Annual
Report
December
31,
2023
Table
of
Contents
AZL®
MVP
Fidelity
Institutional
Asset
Management
Multi-Strategy
Fund
Management
Discussion
and
Analysis
Page
1
Expense
Examples
and
Portfolio
Composition
Page
3
Schedule
of
Portfolio
Investments
Page
4
Statement
of
Assets
and
Liabilities
Page
5
Statement
of
Operations
Page
5
Statements
of
Changes
in
Net
Assets
Page
6
Financial
Highlights
Page
7
Notes
to
the
Financial
Statements
Page
8
Report
of
Independent
Registered
Public
Accounting
Firm
Page
14
Other
Federal
Income
Tax
Information
Page
15
Other
Information
Page
16
Approval
of
Investment
Advisory
Agreement
Page
17
Information
about
the
Board
of
Trustees
and
Officers
Page
20
This
report
is
submitted
for
the
general
information
of
the
shareholder
of
the
Fund.
The
report
is
not
authorized
for
distribution
to
prospective
investors
in
the
Fund
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
contains
details
concerning
the
sales
charges
and
other
pertinent
information.
1
AZL®
MVP
Fidelity
Institutional
Asset
Management
Multi-Strategy
Fund
Review
(Unaudited)
Allianz
Investment
Management
LLC
serves
as
the
Manager
for
the
AZL®
MVP
Fidelity
Institutional
Asset
Management
Multi-
Strategy
Fund.
What
factors
affected
the
Fund’s
performance
during
the
year
ended
December
31,
2023?*
For
the
year
ended
December
31,
2023,
the
AZL®
MVP
Fidelity
Institutional
Asset
Management®
Multi-Strategy
Fund
(the
"Fund")
returned
12.63%.
That
compared
to
a
26.29%,
5.53%
and
a
13.56%
total
return
for
its
benchmarks,
the
S&P
500
Index,
the
Bloomberg
U.S.
Aggregate
Bond
Index,
and
the
Income
and
Growth
Composite
Index,
respectively.
1
The
Fund
currently
invests
in
one
underlying
fund,
the
AZL®
Fidelity
Institutional
Management
Multi-Strategy
Fund,
which
is
managed
by
its
sub
adviser,
FIAM
LLC.
The
underlying
fund
is
approximately
60%
invested
primarily
in
investment-grade
fixed-
income
securities,
and
approximately
40%
of
the
underlying
fund’s
assets
are
invested
primarily
in
large-cap
common
stocks.
The
Fund
also
employs
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process,
which
is
intended
to
adjust
the
risk
of
the
portfolio
based
on
quantitative
indicators
of
market
risk,
such
as
the
current
level
of
Fund
and
market
volatility.
Stocks
rebounded
from
a
challenging
2022
as
easing
inflationary
pressures
and
labor
market
strength
helped
boost
investor
sentiment.
Equity
markets
started
to
anticipate
an
end
to
the
interest
rate
hiking
cycle,
which
benefited
growth
stocks.
Enthusiasm
about
artificial
intelligence
buoyed
returns
for
a
handful
of
high-growth,
technology-oriented,
mega-cap
companies.
The
communication
services
and
consumer
discretionary
sectors
also
contributed
to
the
Fund’s
absolute
performance.
The
U.S.
bond
market
posted
positive
returns
for
the
year.
Yields
during
the
first
several
months
of
the
year
neared
two-decade
highs,
as
interest
rates
rose
through
the
spring
and
summer.
However,
yields
dropped
sharply
in
November,
and
bonds
staged
a
rally
in
the
final
two
months
of
the
year.
The
underlying
fund
narrowly
underperformed
its
composite
benchmark
during
the
year.
Stock
selection
based
on
quality
measures,
especially
those
focused
on
profitability,
contributed
to
relative
returns,
as
did
stock
selection
within
communication
services
and
information
technology.
An
underweight
position
to
underperforming
utilities
and
an
overweight
to
an
outperforming
industrials
sector
also
helped.
The
underlying
fund’s
fixed
income
component
outperformed
its
benchmark,
the
Bloomberg
U.S.
Aggregate
Bond
Index.
The
component’s
relative
performance
was
helped
by
its
holdings
of
high-yield
corporate
bonds
and
an
overweight
position
in
investment-grade
corporate
bonds,
which
benefited
from
improved
valuations
amid
a
broad
rally
in
risk
assets.
The
underlying
fund
held
futures
to
equitize
its
cash
positions
during
the
period.
Exposure
to
this
form
of
derivative
did
not
materially
impact
the
underlying
fund's
performance.
The
MVP
risk
management
process
uses
derivatives
to
seek
to
control
portfolio
volatility
in
unstable
market
conditions.
The
MVP
process
was
engaged
during
the
year
and
reduced
the
Fund’s
equity
exposure
at
multiple
points
during
the
year.
The
MVP
process
slightly
detracted
from
the
Fund’s
performance
during
2023.
Past
performance
does
not
guarantee
future
results.
*
The
Fund’s
portfolio
composition
is
subject
to
change.
There
is
no
guarantee
that
any
sectors
mentioned
will
continue
to
perform
as
described
or
that
securities
in
such
sectors
will
be
held
by
the
Fund
in
the
future.
The
information
contained
in
this
commentary
is
for
informational
purposes
only
and
should
not
be
construed
as
a
recommendation
to
purchase
or
sell
securities
in
the
sector
mentioned.
The
Fund’s
holdings
and
weightings
are
as
of
December
31,
2023.
1
For
a
complete
description
of
the
Fund’s
performance
benchmark
please
refer
to
page
2
of
this
report.
2
AZL®
MVP
Fidelity
Institutional
Asset
Management
Multi-Strategy
Fund
Review
(Unaudited)
Fund
Objective
The
Fund’s
investment
objective
is
to
seek
a
high
level
of
current
income
while
maintaining
prospects
for
capital
appreciation.
This
objective
may
be
changed
by
the
Trustees
of
the
Fund
without
shareholder
approval.
The
Fund
seeks
to
achieve
its
objective
by
investing
primarily
in
shares
of
another
mutual
fund
managed
by
the
manager,
the
AZL®
Fidelity
Institutional
Asset
Management
Multi-Strategy
Fund,
combined
with
the
MVP
risk
management
process.
Investment
Concerns
Equity
securities
(stocks)
are
more
volatile
and
carry
more
risk
than
other
forms
of
investments,
including
investments
in
high-grade
fixed
income
securities.
The
net
asset
value
per
share
of
this
Fund
will
fluctuate
as
the
value
of
the
securities
in
the
portfolio
changes.
Stocks
are
more
volatile
and
carry
more
risk
and
return
potential
than
other
forms
of
investments
Emerging
market
investing
may
be
subject
to
additional
economic,
political,
liquidity,
and
currency
risks
not
associated
with
more
developed
countries.
International
investing
may
involve
risk
of
capital
loss
from
unfavorable
fluctuations
in
currency
values,
from
differences
in
generally
accepted
accounting
principles
or
from
economic
or
political
instability
in
other
nations.
Bonds
offer
a
relatively
stable
level
of
income,
although
bond
prices
will
fluctuate,
providing
the
potential
for
principal
gain
or
loss.
Intermediate-
term,
higher-quality
bonds
generally
offer
less
risk
than
longer-term
bonds
and
a
lower
rate
of
return.
High-yield
bonds
have
a
higher
risk
of
default
or
other
adverse
credit
events,
but
have
the
potential
to
pay
higher
earnings
over
investment-grade
bonds.
The
higher
risk
of
default,
or
the
inability
of
the
creditor
to
repay
its
debt,
is
the
primary
reason
for
the
higher
interest
rates
on
high-yield
bonds.
Investing
in
a
single
industry
or
sector,
or
concentrating
investments
in
a
limited
number
of
industries
or
sectors,
tends
to
increase
the
risk
that
economic,
political,
or
regulatory
developments
affecting
certain
industries
or
sectors
will
have
a
large
impact
on
the
value
of
the
portfolio.
Investing
in
derivative
instruments
involves
risks
that
may
be
different
from
or
greater
than
the
risk
associated
with
investing
directly
in
securities
or
other
traditional
instruments.
Mortgage-backed
investments
involve
risk
of
loss
due
to
prepayments
and,
like
any
bond,
due
to
default.
Because
of
the
sensitivity
of
mortgage-
related
securities
to
changes
in
interest
rates,
the
Fund’s
performance
may
be
more
volatile
than
if
it
did
not
hold
these
securities.
Debt
securities
held
by
the
Fund
may
decline
in
value
due
to
rising
interest
rates.
The
performance
of
investments
in
real
estate
depends
on
the
overall
strength
of
the
real
estate
market,
the
management
of
real
estate
investments
trusts
(REITs),
real
estate
operating
companies
(REOCs),
and
foreign
real
estate
companies,
and
property
management,
all
of
which
can
be
affected
by
a
variety
of
factors,
including
national
and
regional
economic
conditions.
For
a
complete
description
of
these
and
other
risks
associated
with
investing
in
the
Fund,
please
refer
to
the
Fund’s
prospectus.
Growth
of
$10,000
Investment
The
chart
above
represents
a
comparison
of
a
hypothetical
investment
in
the
Fund
versus
a
similar
investment
in
the
Fund’s
benchmarks
and
represents
the
reinvestment
of
dividends
and
capital
gains
in
the
Fund.
Past
performance
does
not
guarantee
future
results.
The
performance
data
quoted
represents
past
performance
and
current
returns
may
be
lower
or
higher.
The
investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
the
original
cost.
To
obtain
performance
information
current
to
the
most
recent
month
end,
please
visit
www.Allianzlife.com.
The
above
expense
ratio
is
based
on
the
current
Fund
prospectus
dated
May
1,
2023.
The
Manager
and
the
Fund
have
entered
into
a
written
agreement
limiting
operating
expenses,
excluding
certain
expenses
(such
as
interest
expense
and
acquired
fund
fees
and
expenses),
to
0.15%
through
April
30,
2025.
Additional
information
pertaining
to
the
December
31,
2023
expense
ratio
can
be
found
in
the
Financial
Highlights.
Acquired
fund
fees
and
expenses
are
incurred
indirectly
by
the
Fund
through
the
valuation
of
the
Fund’s
investments
in
the
permitted
Underlying
Funds.
Accordingly,
acquired
fund
fees
and
expenses
affect
the
Fund’s
total
returns.
Because
these
fees
and
expenses
are
not
included
in
the
Fund’s
financial
highlights,
the
Fund’s
total
annual
fund
operating
expenses,
as
shown
in
the
current
prospectus,
do
not
correlate
to
the
ratios
of
expenses
to
average
net
assets
shown
in
the
Financial
Highlights.
Without
acquired
fund
fees
and
expenses
the
Fund’s
gross
expense
ratio
would
be
0.15%.
The
total
return
of
the
Fund
does
not
reflect
the
effect
of
any
insurance
charges,
the
annual
maintenance
fee
or
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Such
charges,
fees
and
tax
payments
would
reduce
the
performance
quoted.
The
Fund’s
performance
is
measured
against
the
Standard
&
Poor’s
500
Index
(“S&P
500”),
the
Bloomberg
U.S.
Aggregate
Bond
Index
and
the
Income
&
Growth
Composite
Index
(“Composite”).
The
S&P
500
is
representative
of
500
selected
common
stocks,
most
of
which
are
listed
on
the
New
York
Stock
Exchange,
and
is
a
measure
of
the
U.S.
Stock
market
as
a
whole.
The
Bloomberg
U.S.
Aggregate
Bond
Index
is
a
market
value-weighted
performance
benchmark
for
investment-grade
fixed-rate
debt
issues,
including
government,
corporate,
asset-backed,
and
mortgage-
backed
securities,
with
maturities
of
at
least
one
year.
The
Composite
is
a
blended
index
comprised
of
(40%)
S&P
500
and
(60%)
Bloomberg
U.S.
Aggregate
Bond
Index.
These
indexes
are
unmanaged
and
do
not
reflect
the
deduction
of
fees
associated
with
a
mutual
fund,
such
as
investment
management
and
fund
accounting
fees.
The
Fund’s
performance
reflects
the
deduction
of
fees
for
services
provided
to
the
Fund.
Investors
cannot
invest
directly
in
an
index.
Average
Annual
Total
Returns
as
of
December
31,
2023
1
Year
3
Years
5
Years
10
Years
AZL
®
MVP
Fidelity
Institutional
Asset
Management
Multi-Strategy
Fund
12.63%
2.54%
6.08%
3.50%
Bloomberg
U.S.
Aggregate
Bond
Index
5.53%
(3.31)%
1.10%
1.81%
Income
&
Growth
Composite
Index
13.56%
2.03%
7.16%
6.08%
S&P
500
Index
26.29%
10.00%
15.69%
12.03%
Expense
Ratio
Gross
AZL
®
MVP
Fidelity
Institutional
Asset
Management
Multi-Strategy
Fund
0.83%
AZL
MVP
FIAM
Multi-Strategy
Fund
3
Expense
Examples
(Unaudited)
As
a
shareholder
of
the
AZL
MVP
FIAM
Multi-Strategy
Fund
(the
“Fund”),
you
incur
ongoing
costs,
including
management
fees,
distribution
fees,
and
other
Fund
expenses.
These
examples
are
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
Please
note
that
the
expenses
shown
in
each
table
do
not
reflect
expenses
that
apply
to
the
subaccount
or
the
insurance
contract.
If
the
expenses
that
apply
to
the
subaccount
or
the
insurance
contract
were
included,
your
costs
would
have
been
higher.
These
examples
are
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
periods
presented
below.
The
Actual
Expense
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
below,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
table
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
this
period.
The
Hypothetical
Expense
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
FIAM
Multi-Strategy
Fund
$1,000.00
$1,048.30
$0.77
0.15%
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
FIAM
Multi-Strategy
Fund
$1,000.00
$1,024.45
$0.77
0.15%
*
Expenses
are
equal
to
the
average
account
value
multiplied
by
the
Fund's
annualized
expense
ratio
multiplied
by
184/365
(the
number
of
days
in
the
most
recent
fiscal
half-year
divided
by
the
number
of
days
in
the
fiscal
year).
Portfolio
Composition
(Unaudited)
Investments
Percent
of
Net
Assets
Balanced
Funds
95
.5
%
Total
Investment
Securities
95
.5
Net
other
assets
(liabilities)
4
.5
Net
Assets
100
.0
%
AZL
MVP
FIAM
Multi-Strategy
Fund
Schedule
of
Portfolio
Investments
December
31,
2023
4
See
accompanying
notes
to
the
financial
statements.
Percentages
indicated
are
based
on
net
assets
as
of
December
31,
2023
.
Shares
Value
Affiliated
Investment
Company
(
95
.5
%
):
Balanced
Funds
(
95
.5
%
):
22,725,081
AZL
Fidelity
Institutional
Asset
Management
Multi-
Strategy
Fund,
Class
2
$
315,196,873
Total
Affiliated
Investment
Company
(Cost
$280,371,413)
315,196,873
Total
Investment
Securities
(Cost
$280,371,413)
—
95.5%(a)
315,196,873
Net
other
assets
(liabilities)
—
4.5%
14,734,803
Net
Assets
—
100.0%
$
329,931,676
(a)
See
Federal
Tax
Information
listed
in
the
Notes
to
the
Financial
Statements.
Futures
Contracts
At
December
31,
2023,
the
Fund's
open
futures
contracts
were
as
follows:
Long
Futures
Description
Expiration
Date
Number
of
Contracts
Notional
Amount
Value
and
Unrealized
Appreciation/
(Depreciation)
S&P
500
Index
E-Mini
March
Futures
(U.S.
Dollar)
3/15/24
24
$
5,784,000
$
24,217
U.S.
Treasury
10-Year
Note
March
Futures
(U.S.
Dollar)
3/19/24
78
8,805,469
276,553
$
300,770
AZL
MVP
FIAM
Multi-Strategy
Fund
5
See
accompanying
notes
to
the
financial
statements.
Statement
of
Assets
and
Liabilities
December
31,
2023
Statement
of
Operations
For
the
Year
Ended
December
31,
2023
Assets:
Investments
in
affiliates,
at
cost
$
280,371,413
Investments
in
affiliates,
at
value
$
315,196,873
Deposit
at
broker
for
futures
contracts
collateral
14,795,934
Interest
and
dividends
receivable
52,548
Receivable
for
affiliated
investments
sold
696,016
Prepaid
expenses
1,479
Total
Assets
330,742,850
Liabilities:
Cash
overdraft
696,016
Payable
for
capital
shares
redeemed
57,113
Management
fees
payable
34,401
Administration
fees
payable
8,538
Custodian
fees
payable
4,636
Administrative
and
compliance
services
fees
payable
478
Transfer
agent
fees
payable
849
Trustee
fees
payable
1,986
Other
accrued
liabilities
7,157
Total
Liabilities
811,174
Commitments
and
contingent
liabilities^
Net
Assets
$
329,931,676
Net
Assets
Consist
of:
Paid
in
capital
$
301,613,498
Total
distributable
earnings
28,318,178
Net
Assets
$
329,931,676
Shares
of
beneficial
interest
(unlimited
number
of
shares
authorized,
no
par
value)
26,972,392
Net
Asset
Value
(offering
and
redemption
price
per
share)
$
12.23
^
See
Note
3
in
Notes
to
the
Financial
Statements.
Investment
Income:
Dividends
from
affiliates
$
5,110,110
Interest
665,710
Dividends
from
non-affiliates
16,542
Total
Investment
Income
5,792,362
Expenses:
Management
fees
308,323
Administration
fees
75,546
Custodian
fees
18,491
Administrative
and
compliance
services
fees
4,074
Transfer
agent
fees
7,225
Trustee
fees
14,809
Professional
fees
15,312
Shareholder
reports
5,156
Recoupment
of
prior
expenses
reimbursed
by
the
manager
7,061
Other
expenses
6,487
Total
expenses
462,484
Net
Investment
Income/(Loss)
5,329,878
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments:
Net
realized
gains/(losses)
on
affiliated
underlying
funds
1,345,869
Net
realized
gains/(losses)
on
futures
contracts
(
1,489,419
)
Change
in
net
unrealized
appreciation/depreciation
on
affiliated
underlying
funds
32,841,060
Change
in
net
unrealized
appreciation/depreciation
on
futures
contracts
256,789
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments
32,954,299
Change
in
Net
Assets
Resulting
From
Operations
$
38,284,177
AZL
MVP
FIAM
Multi-Strategy
Fund
6
See
accompanying
notes
to
the
financial
statements.
Statements
of
Changes
in
Net
Assets
For
the
Year
Ended
December
31,
2023
For
the
Year
Ended
December
31,
2022
Change
In
Net
Assets:
Operations:
Net
investment
income/(loss)
$
5,329,878
$
1,647,186
Net
realized
gains/(losses)
on
investments
(
143,550
)
13,644,830
Change
in
unrealized
appreciation/depreciation
on
investments
33,097,849
(
47,701,574
)
Change
in
net
assets
resulting
from
operations
38,284,177
(
32,409,558
)
Distributions
to
Shareholders:
Distributions
(
4,941,197
)
(
10,283,765
)
Change
in
net
assets
resulting
from
distributions
to
shareholders
(
4,941,197
)
(
10,283,765
)
Capital
Transactions:
Proceeds
from
shares
issued
9,474,749
1,666,236
Proceeds
from
shares
issued
in
merger
165,908,114
—
Proceeds
from
dividends
reinvested
4,941,197
10,283,765
Value
of
shares
redeemed
(
66,117,969
)
(
30,662,612
)
Change
in
net
assets
resulting
from
capital
transactions
114,206,091
(
18,712,611
)
Change
in
net
assets
147,549,071
(
61,405,934
)
Net
Assets:
Beginning
of
period
182,382,605
243,788,539
End
of
period
$
329,931,676
$
182,382,605
Share
Transactions:
Shares
issued
828,026
138,834
Shares
issued
in
merger
14,877,903
—
Dividends
reinvested
441,178
946,940
Shares
redeemed
(
5,712,574
)
(
2,537,378
)
Change
in
shares
10,434,533
(
1,451,604
)
AZL
MVP
FIAM
Multi-Strategy
Fund
Financial
Highlights
(Selected
data
for
a
share
of
beneficial
interest
outstanding
throughout
the
periods
indicated.
Does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.)
7
See
accompanying
notes
to
the
financial
statements.
Year
Ended
December
31,
2023
Year
Ended
December
31,
2022
Year
Ended
December
31,
2021
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Net
Asset
Value,
Beginning
of
Period
$11.03
$13.55
$13.00
$12.47
$11.17
Investment
Activities:
Net
Investment
Income/(Loss)(a)
0.20
0.10
0.05
0.27
0.27
Net
Realized
and
Unrealized
Gains/(Losses)
on
Investments
1.18
(1.98
)
1.36
0.61
1.52
Total
from
Investment
Activities
1.38
(1.88
)
1.41
0.88
1.79
Distributions
to
Shareholders
From:
Net
Investment
Income
(0.18
)
(0.09
)
(0.36
)
(0.35
)
(0.49
)
Net
Realized
Gains
—
(0.55
)
(0.50
)
—
—
Total
Dividends
(0.18
)
(0.64
)
(0.86
)
(0.35
)
(0.49
)
Net
Asset
Value,
End
of
Period
$12.23
$11.03
$13.55
$13.00
$12.47
Total
Return
(b)
12.63
%
(13.81
)%
11.07
%
7.16
%
16.25
%
Ratios
to
Average
Net
Assets/Supplemental
Data:
Net
Assets,
End
of
Period
(000's)
$329,932
$182,383
$243,789
$254,918
$265,363
Net
Investment
Income/(Loss)
1.73
%
0.81
%
0.35
%
2.19
%
2.24
%
Expenses
Before
Reductions*(c)
0.15
%
0.15
%
0.14
%
0.15
%
0.14
%
Expenses
Net
of
Reductions*
0.15
%
0.15
%
0.14
%
0.15
%
0.14
%
Portfolio
Turnover
Rate
21
%
8
%
3
%
6
%
7
%
*
The
expense
ratios
exclude
the
impact
of
fees/expenses
paid
by
each
underlying
fund.
(a)
Calculated
using
the
average
shares
method.
(b)
The
returns
include
reinvested
dividends
and
fund
level
expenses,
but
exclude
insurance
contract
charges. If
these
charges
were
included,
the
returns
would
have
been
lower.
(c)
Excludes
fee
reductions. If
such
fee
reductions
had
not
occurred,
the
ratios
would
have
been
as
indicated.
AZL
MVP
FIAM
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
8
1.
Organization
The
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”)
was
organized
as
a
Delaware
statutory
trust
on
June
16,
2004.
The
Trust
is
an
open-end
management
investment
company
registered
under
the
Investment
Company
Act
of
1940,
as
amended,
(the
“1940
Act”)
and
thus
is
determined
to
be
an
investment
company,
and
follows
the
investment
company
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946
“Financial
Services—Investment
Companies”.
The
Trust
consists
of 9
separate
investment
portfolios
(collectively,
the
“Funds”),
of
which
one
is
included
in
this
report,
the
AZL
MVP
FIAM
Multi-
Strategy
Fund (the
“Fund”),
and 8
are
presented
in
separate
reports.
The
Fund
is
a
diversified
series
of
the
Trust.
The
Fund
is
a
“fund
of
funds”,
which
means
that
the
Fund
invests
primarily
in
other
mutual
funds
(the
"Underlying
Funds").
Underlying
Funds
invest
in
stocks,
bonds,
and
other
securities
and
reflect
varying
amounts
of
potential
investment
risk
and
reward.
The
Underlying
Funds
record
their
investments
at
fair
value.
Periodically,
the
Fund
will
adjust
its
asset
allocation
as
it
seeks
to
achieve
its
investment
objective.
The
Trust
is
authorized
to
issue
an
unlimited
number
of
shares
of
the
Fund
without
par
value.
Shares
of
the
Fund
are
available
through
the
variable
annuity
contracts
offered
through
the
separate
accounts
of
participating
insurance
companies.
Currently,
the
Fund
only
offers
its
shares
to
separate
accounts
of
Allianz
Life
Insurance
Company
of
North
America
and
Allianz
Life
Insurance
Company
of
New
York,
affiliates
of
the
Trust
and
the
Manager,
as
defined
below.
Under
the
Trust’s
organizational
documents,
its
officers
and
trustees
are
indemnified
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
In
addition,
in
the
normal
course
of
business,
the
Fund
may
enter
into
contracts
with
its
vendors
and
others
that
provide
for
general
indemnifications.
The
Fund’s
maximum
exposure
under
these
arrangements
is
unknown,
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund.
However,
based
on
experience,
the
Fund
expects
that
risk
of
loss
to
be
remote.
2.
Significant
Accounting
Policies
The
following
is
a
summary
of
significant
accounting
policies
followed
by
the
Fund
in
the
preparation
of
its
financial
statements.
The
policies
conform
with
U.S.
generally
accepted
accounting
principles
(“U.S.
GAAP”).
The
preparation
of
financial
statements
requires
management
to
make
certain
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
and
disclosure
of
contingent
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
Security
Valuation
The
Fund
records
its
investments
at
fair
value.
Fair
value
is
defined
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
willing
market
participants
at
the
measurement
date.
The
valuation
techniques
used
to
determine
fair
value
are
further
described
in
Note
4
below.
Investment
Transactions
and
Investment
Income
Investment
transactions
are
accounted
for
on
trade
date.
Net
realized
gains
and
losses
on
investments
sold
and
on
foreign
currency
transactions
are
recorded
on
the
basis
of
identified
cost.
Interest
income
is
recorded
on
the
accrual
basis
and
includes,
where
applicable,
the
amortization
of
premiums
or
accretion
of
discounts.
Dividend
income
is
recorded
on
the
ex-
dividend
date
except
in
the
case
of
foreign
securities,
in
which
case
dividends
are
recorded
as
soon
as
such
information
becomes
available.
Distributions
to
Shareholders
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
The
Fund
distributes
its
dividends
from
net
investment
income
and
net
realized
capital
gains,
if
any,
on
an
annual
basis.
The
amount
of
distributions
from
net
investment
income
and
from
net
realized
gains
is
determined
in
accordance
with
federal
income
tax
regulations,
which
may
differ
from
U.S.
GAAP.
These
“book/tax”
differences
are
either
temporary
or
permanent
in
nature.
To
the
extent
these
differences
are
permanent
in
nature
(e.g.,
return
of
capital,
net
operating
loss,
reclassification
of
certain
market
discounts,
gain/loss,
paydowns,
and
distributions),
such
amounts
are
reclassified
within
the
composition
of
net
assets
based
on
their
federal
tax-basis
treatment;
temporary
differences
(e.g.,
wash
sales
and
differing
treatment
on
certain
investments)
do
not
require
reclassification.
Distributions
to
shareholders
that
exceed
net
investment
income
and
net
realized
gains
for
tax
purposes
are
reported
as
distributions
of
capital.
Expense
Allocation
Expenses
directly
attributable
to
the
Fund
are
charged
directly
to
the
Fund,
while
expenses
attributable
to
more
than
one
Fund
are
allocated
among
the
respective
Funds
based
upon
relative
net
assets
or
some
other
reasonable
method.
Expenses
which
are
attributable
to
more
than
one
Trust
are
allocated
across
the
Allianz
Variable
Insurance
Products
Trust,
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
AIM
ETF
Products
Trust
based
upon
relative
net
assets
or
another
reasonable
basis.
Allianz
Investment
Management
LLC
(the
“Manager”),
serves
as
the
investment
manager
for
the
Trust,
Allianz
Variable
Insurance
Products
Trust
and
AIM
ETF
Products
Trust.
This
report
does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.
Affiliated
Securities
Transactions
Pursuant
to
Rule
17a-7
under
the
1940
Act,
the
Fund
may
engage
in
securities
transactions
with
affiliated
investment
companies
and
advisory
accounts
managed
by
the
Manager.
Any
such
purchase
or
sale
transaction
must
be
effected
without
a
brokerage
commission
or
other
remuneration,
except
for
customary
transfer
fees.
The
transaction
must
be
effected
at
the
current
market
price,
which
is
either
the
security’s
last
sale
price
on
an
exchange
or,
if
there
are
no
transactions
in
the
security
that
day,
at
the
average
of
the
highest
bid
and
lowest
asked
price.
During
the
year
ended
December
31,
2023,
the
Fund
did
not
engage
in
any
Rule
17a-7
transactions.
AZL
MVP
FIAM
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
9
Derivative
Instruments
All
open
derivative
positions
at
period
end
are
reflected
on
the
Fund’s
Schedule
of
Portfolio
Investments.
The
following
is
a
description
of
the
derivative
instruments
utilized
by
the
Fund,
including
the
primary
underlying
risk
exposures
related
to
each
instrument
type.
The
Fund’s
allocation
to
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process
may
include
(a)
derivatives
such
as
index
futures,
other
futures
contracts,
options,
and
other
similar
securities
and
(b)
cash,
money
market
equivalents,
short-term
debt
instruments,
money
market
funds,
and
short-term
debt
funds
to
satisfy
all
applicable
margin
requirements
and
to
provide
additional
portfolio
liquidity
to
satisfy
large
redemptions
and
any
margin
calls.
Due
to
the
leverage
provided
by
derivatives,
the
notional
value
of
the
Fund’s
derivative
positions
could
exceed
20%
of
the
Fund’s
value.
The
Fund
may
also
use
futures
to
gain
equity
exposure
and
may
hold
cash
as
a
buffer
in
the
event
of
market
shocks.
Futures
Contracts
During
the
year
ended
December
31,
2023,
the
Fund
invested
in
futures
contracts
to
reduce
volatility
and
limit
the
need
to
decrease
or
increase
allocations
to
underlying
funds.
Futures
contracts
are
valued
based
upon
their
quoted
daily
settlement
prices.
Upon
entering
into
a
futures
contract,
the
Fund
is
required
to
segregate
liquid
assets
in
accordance
with
the
initial
margin
requirements
of
the
broker
or
exchange.
Futures
contracts
are
marked
to
market
daily
and
a
payable
or
receivable
for
the
change
in
value
(“variation
margin”),
if
any,
is
recorded
by
the
Fund.
Gains
or
losses
are
recognized
but
not
considered
realized
until
the
contracts
expire
or
are
closed.
Futures
contracts
involve,
to
varying
degrees,
elements
of
market
risk
(generally
equity
price
risk
related
to
stock
futures,
interest
rate
risk
related
to
bond
futures,
and
foreign
currency
risk
related
to
currency
futures)
and
exposure
to
loss
in
excess
of
the
variation
margin
disclosed
in
the
Statement
of
Assets
and
Liabilities.
The
primary
risks
associated
with
the
use
of
futures
contracts
are
the
imperfect
correlation
between
the
change
in
value
of
the
underlying
securities
and
the
prices
of
futures
contracts,
the
possibility
of
an
illiquid
market,
and
the
inability
of
the
counterparty
to
meet
the
terms
of
the
contract.
For
the
year
ended
December
31,
2023,
the
monthly
average
notional
amount
for
long
contracts
was
$14.3
million,
and
the
monthly
average
notional
amount
for
short
contracts
was
$2.1
million.
Realized
gains
and
losses
are
reported
as
“Net
realized
gains/(losses)
on
futures
contracts”
on
the
Statement
of
Operations.
Summary
of
Derivative
Instruments
The
following
is
a
summary
of
the
values
of
derivative
instruments
on
the
Fund’s
Statement
of
Assets
and
Liabilities,
categorized
by
risk
exposure,
as
of
December
31,
2023:
The
following
is
a
summary
of
the
effect
of
derivative
instruments
on
the
Statement
of
Operations,
categorized
by
risk
exposure,
for
the
year
ended
December
31,
2023:
3.
Fees
and
Transactions
with
Affiliates
and
Other
Parties
The
Manager
provides
investment
advisory
and
management
services
for
the
Fund.
The
Manager
has
contractually
agreed
to
waive
fees
and
reimburse
the
Fund
to
limit
the
annual
expenses,
excluding
interest
expense
(e.g.,
cash
overdraft
fees),
taxes,
brokerage
commissions,
acquired
fund
fees
and
expenses,
other
expenditures
that
are
capitalized
in
accordance
with
U.S.
GAAP
and
other
extraordinary
expenses
not
incurred
in
the
ordinary
course
of
the
Fund’s
business,
based
on
the
daily
net
assets
of
the
Fund,
through
April
30,
2025.
Expenses
incurred
for
investment
advisory
and
management
services
are
reflected
on
the
Statement
of
Operations
as
“Management
fees.”
For
the
year
ended
December
31,
2023,
the
annual
rate
due
to
the
Manager
and
the
annual
expense
limit
were
as
follows:
Any
amounts
contractually
waived
or
remitted
to
the
Fund
by
the
Manager
with
respect
to
the
annual
expense
limit
in
a
particular
fiscal
year
may
be
reimbursed
by
the
Fund
to
the
Manager,
provided
that
such
reimbursement
will
not
cause
the
Fund
to
exceed
the
lesser
of
any
applicable
expense
limit
in
effect
(i)
at
the
time of
the
original
waiver
or
payment
and
(ii)
at
the
time
of
such
reimbursement,
as
supported
by
standard
accounting
practices.
Such
reimbursement
only
applies
to
amounts
waived
or
paid
by
the
Manager
within
the
three
years
prior
to the
date
of
such
reimbursement,
calculated
monthly
from
when
the
waiver
or
payment
was
recorded.
Any
amounts
recouped
by
the
Manager
during
the
period
are
reflected
on
the
Statement
of
Operations
as
“Recoupment
of
prior
expenses
reimbursed
by
the
Manager.”
At
December
31,
2023,
there
were
no
remaining
contractual
reimbursements
subject
to
repayment
by
the
Fund
in
subsequent
years,
and
no
commitment
or
contingent
liability
is
expected.
Asset
Derivatives
Liability
Derivatives
Primary
Risk
Exposure
Statement
of
Assets
and
Liabilities
Location
Total
Value
Statement
of
Assets
and
Liabilities
Location
Total
Value
Equity
Risk
24,217
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$24,217
Payable
for
variation
margin
on
futures
contracts*
$—
Interest
Rate
Risk
–
276,553
–
–
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$276,553
Payable
for
variation
margin
on
futures
contracts*
$
—
*
For
futures
contracts,
the
amounts
represent
the
cumulative
appreciation/depreciation
of
these
futures
contracts
as
reported
in
the
Schedule
of
Portfolio
Investments.
Only
the
current
day's
variation
margin,
if
any,
is
reported
within
the
Statement
of
Assets
and
Liabilities
as
Variation
margin
on
futures
contracts.
Primary
Risk
Exposure
Location
of
Gains/(Losses)
on
Derivatives
Recognized
Realized
Gains/(Losses)
on
Derivatives
Recognized
Change
in
Net
Unrealized
Appreciation/Depreciation
on
Derivatives
Recognized
Equity
Risk
966,967
71,412
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$
(966,967)
$
(71,412)
Interest
Rate
Risk
522,452
(328,201)
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$(522,452)
$328,201
Annual
Rate
Annual
Expense
Limit
AZL
MVP
FIAM
Multi-Strategy
Fund
0.10%
0.15%
AZL
MVP
FIAM
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
10
Management
fees,
which
the
Manager
may
waive
in
order
to
maintain
more
competitive
expense
ratios,
are
not
subject
to
repayment
in
subsequent
years.
Information
on
the
total
amount
waived/reimbursed
by
the
Manager
or
repaid
to
the
Manager
by
the
Fund
during
the
period
can
be
found
on
the
Statement
of
Operations,
as
applicable.
During
the
year
ended
December
31,
2023,
there
were
no
such
waivers.
The
Manager
serves
as
the
investment
adviser
of
the
underlying
funds
in
which
the
Fund
invests.
At
December
31,
2023,
these
underlying
funds
are
noted
as
Affiliated
Investment
Companies
in
the
Fund’s
Schedule
of
Portfolio
Investments.
Additional
information,
including
financial
statements,
about
these
Funds
is
available
at
www.allianzlife.com.
The
Manager
is
paid
a
separate
fee
from
the
underlying
funds
for
such
services.
A
summary
of
the
Fund’s
investments
in
affiliated
investment
companies
for
the
year
ended
December
31,
2023
is
as
follows:
Pursuant
to
separate
agreements
between
the
Trust
and
the
Manager,
the
Manager
provides
a
Chief
Compliance
Officer
(“CCO”)
and
certain
compliance
oversight
and
regulatory
filing
services
to
the
Trust.
Under
these
agreements,
the
Manager
is
entitled
to
an
amount
equal
to
a
portion
of
the
compensation
and
certain
other
expenses
related
to
the
individuals
performing
the
CCO
and
compliance
oversight
services,
as
well
as
$100
per
hour
for
time
incurred
in
connection
with
the
preparation
and
filing
of
certain
documents
with
the
SEC.
The
fees
are
paid
to
the
Manager
on
a
quarterly
basis.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administrative
and
compliance
services
fees.”
Citi
Fund
Services
Ohio,
Inc.
(“Citi”
or
the
“Administrator”),
a
wholly
owned
subsidiary
of
Citigroup,
Inc.,
with
which
an
officer
of
the
Trust
is
affiliated,
serves
as
the
Trust’s
administrator
and
fund
accountant,
and
assists
the
Trust
in
all
aspects
of
its
administration
and
operation.
The
Administrator
is
entitled
to
a
fee,
accrued
daily
and
paid
monthly.
The
Administrator
is
entitled
to
an
annual
fee
for
each
additional
class
of
shares
of
any
Fund,
certain
annual
fees
in
supporting
fair
value
services,
and
a
Trust-wide
annual
fee
for
providing
infrastructure
and
support
in
implementing
the
written
policies
and
procedures
comprising
the
Fund’s
compliance
program.
The
Administrator
is
also
reimbursed
for
certain
expenses
incurred.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administration
fees.”
FIS
Investor
Services
LLC
(“FIS”)
serves
as
the
Fund's
transfer
agent.
Under
the
Transfer
Agent
Agreement,
the
Trust
pays
FIS
a
fee
for
its
services
and
reimburses
FIS
for
all
of
their
reasonable
out-of-pocket
expenses
incurred
in
providing
these
services.
The
Bank
of
New
York
Mellon
(“BNY
Mellon”
or
the
“Custodian”)
serves
as
the
Trust’s
custodian.
For
these
services
as
custodian,
the
Funds
pay
BNY
Mellon
a
fee
based
on
a
percentage
of
assets
held
on
behalf
of
the
Funds,
plus
certain
out-of-pocket
charges.
Allianz
Life
Financial
Services,
LLC
(“ALFS”),
an
affiliate
of
the
Manager,
serves
as
distributor
of
the
Fund.
ALFS
receives
an
annual
Trust-wide
annual
fee
of
$7,500,
paid
by
the
Manager
from
its
profits
and
not
by
the
Trust,
for
recordkeeping
and
reporting
services.
Certain
Officers
and
Trustees
of
the
Trust
are
affiliated
with
the
Manager
or
the
Administrator.
Such
Officers
(except
for
the
Trust’s
CCO
as
noted
above)
and
Trustees
receive
no
compensation
from
the
Trust
for
serving
in
their
respective
roles.
4.
Investment
Valuation
Summary
The
valuation
techniques
employed
by
the
Fund,
as
described
below,
maximize
the
use
of
observable
inputs
and
minimize
the
use
of
unobservable
inputs
in
determining
fair
value.
The
inputs
used
for
valuing
the
Fund’s
investments
are
summarized
in
the
three
broad
levels
listed
below:
•
Level
1
-
quoted
prices
in
active
markets
for
identical
assets
•
Level
2
-
other
significant
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayments
speeds,
credit
risk,
etc.)
•
Level
3
-
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
investments)
Changes
in
valuation
techniques
may
result
in
transfers
in
or
out
of
an
assigned
level
within
the
disclosure
hierarchy.
The
inputs
or
methodology
used
for
valuing
investments
is
not
necessarily
an
indication
of
the
risk
associated
with
investing
in
those
investments.
Investments
in
other
investment
companies
are
valued
at
their
published
net
asset
value
(“NAV”).
Security
prices
are
determined
pursuant
to
valuation
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
“Board”
or
“Trustees”)
as
of
the
close
of
the
New
York
Stock
Exchange
(“NYSE”)
(generally
4:00
pm
Eastern
Time).
The
investments
utilizing
Level
1
valuations
represent
investments
in
open-end
investment
companies.
Futures
contracts
are
valued
at
the
settlement
prices
established
each
day
on
the
primary
exchange
and
are
typically
categorized
as
Level
1
in
the
fair
value
hierarchy.
The
Board
has
designated
the
Manager
to
perform
the
Fund’s
fair
value
determinations
in
accordance
with
valuation
procedures
approved
by
the
Board.
The
effect
of
using
fair
value
pricing
is
that
the
Fund’s
NAV
will
be
subject
to
the
judgment
of
the
Manager.
The
Manager’s
fair
valuation
process
is
subject
to
the
oversight
of
the
Board.
Value
12/31/22
Purchases
at
Cost
Proceeds
from
Sales
Net
Realized
Gains
(Losses)
Change
in
Net
Unrealized
Appreciation
(Depreciation)
Value
12/31/23
Shares
as
of
12/31/23
Dividend
Income
Net
Realized
Gains
Distributions
from
Affiliated
Underlying
Funds
AZL
Fidelity
Institutional
Asset
Management
Multi-Strategy
Fund,
Class
2
$
173,726,137
$
167,922,838
$
(60,639,031)
$
1,345,869
$
32,841,060
$
315,196,873
22,725,081
$
5,110,110
$
—
AZL
MVP
FIAM
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
11
The
following
is
a
summary
of
the
valuation
inputs
used
as
of
December
31,
2023
in
valuing
the
Fund’s
investments
based
upon
the
three
levels
defined
above:
5.
Security
Purchases
and
Sales
For
the
year
ended
December
31,
2023,
cost
of
purchases
and
proceeds
from
sales
of
securities
(excluding fund
merger
transactions
and securities
maturing
less
than
one
year
from
acquisition)
were
as
follows:
6.
Investment
Risks
The
risks
below
are
presented
in
an
order
intended
to
facilitate
readability.
Their
order
does
not
imply
that
the
realization
of
one
risk
is
more
likely
to
occur
more
frequently
than
another
risk,
nor
does
it
imply
that
the
realization
of
one
risk
is
likely
to
have
a
greater
adverse
impact
than
another
risk.
The
Fund
may
be
subject
to
other
risks
in
addition
to
these
identified
risks.
This
section
discusses
certain
common
principal
risks
encountered
by
the
Fund.
Derivatives
Risk:
The
Fund
may
invest
directly
or
through
affiliated
or
unaffiliated
mutual
funds
in
derivative
instruments
such
as
futures,
options,
and
options
on
futures.
A
derivative
is
a
financial
contract
whose
value
depends
on,
or
is
derived
from,
the
value
of
an
underlying
asset,
reference
rate,
or
risk.
Use
of
derivative
instruments
involves
risks
different
from,
or
possibly
greater
than,
the
risks
associated
with
investing
directly
in
securities
and
other
traditional
investments.
Derivatives
are
subject
to
a
number
of
other
risks,
such
as
liquidity
risk,
interest
rate
risk,
market
risk,
credit
risk,
and
selection
risk.
Derivatives
also
involve
the
risk
of
mispricing
or
improper
valuation
and
the
risk
that
changes
in
the
value
may
not
correlate
perfectly
with
the
underlying
asset,
rate,
or
index.
Using
derivatives
may
result
in
losses,
possibly
in
excess
of
the
principal
amount
invested.
Also,
suitable
derivative
transactions
may
not
be
available
in
all
circumstances.
The
other
party
to
a
derivatives
contract
could
default.
Foreign
Securities
Risk:
Investing
in
the
securities
of
non-U.S.
issuers
involves
a
number
of
risks,
such
as
fluctuations
in
currency
values,
adverse
political,
social
or
economic
developments,
and
differences
in
social
and
economic
developments
or
policies.
Such
risks
include
future
political
and
economic
developments,
and
the
possible
imposition
of
exchange
controls
or
other
foreign
governmental
laws
and
restrictions.
In
addition,
with
respect
to
certain
countries,
there
is
the
possibility
of
expropriation
of
assets,
confiscatory
taxation,
political
or
social
instability
or
diplomatic
developments
which
could
adversely
affect
investments
in
those
securities.
Certain
foreign
companies
may
be
subject
to
sanctions,
embargoes,
or
other
governmental
actions
that
may
impair
or
otherwise
limit
the
ability
to
invest
in,
receive,
hold
or
sell
the
securities
of
such
companies.
Fund
of
Fund
Risk:
The
Fund,
as
a
shareholder
of
the
underlying
funds,
indirectly
bears
its
proportionate
share
of
any
investment
management
fees
and
other
expenses
of
the
underlying
funds.
Further
due
to
the
fees
and
expenses
paid
by
the
Fund,
as
well
as
small
variations
in
the
Fund’s
actual
allocations
to
the
underlying
funds
and
any
futures
and
cash
held
in
the
Fund’s
portfolio,
the
performance
and
income
distributions
of
the
Fund
will
not
be
the
same
as
the
performance
and
income
distributions
of
the
underlying
funds.
In
addition,
the
Fund
maintains
indirect
exposure
to
various
types
of
risk
which
may
exist
in
the
underlying
Funds,
such
as
foreign
securities
risk,
fixed
income
securities
risk
and
other
risks.
Interest
Rate
Risk:
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
The
price
of
a
bond
is
also
affected
by
its
maturity.
Bonds
with
longer
maturities
generally
have
greater
sensitivity
to
changes
in
interest
rates.
Market
Risk
:
The
market
price
of
securities
owned
by
the
underlying
funds
may
go
up
or
down,
sometimes
rapidly
and
unpredictably.
Securities
may
decline
in
value
due
to
factors
affecting
securities
markets
generally
or
particular
industries
represented
in
the
securities
markets.
The
value
of
a
security
may
decline
due
to
general
market
conditions,
economic
trends
or
events that
are
not
specifically
related
to
a
particular
company,
such
as
real
or
perceived
adverse
economic
conditions,
inflation,
recessions, changes
in
the
general
outlook
for
corporate
earnings,
changes
in
interest
or
currency
rates,
or
adverse
investor
sentiment,
as
well
as
natural
disasters,
and
outbreaks
of
infectious
illnesses
or
other
widespread
public
health
issues.
Quantitative
Investing
Risk:
The
value
of
securities
selected
using
quantitative
analysis
can
react
differently
to
issuer,
political,
market,
and
economic
developments
than
the
market
as
a
whole
or
securities
selected
using
only
fundamental
analysis.
The
factors
used
in
quantitative
analysis
and
the
weight
placed
on
those
factors
may
not
be
predictive
of
a
security's
value.
In
addition,
factors
that
affect
a
security's
value
can
change
over
time
and
these
changes
may
not
be
reflected
in
the
quantitative
model.
A
quantitative
model
can
be
adversely
affected
by
errors
or
imperfections
in
the
factors
or
the
data
on
which
evaluations
are
based,
or
by
technical
issues
with
construction
or
implementation
of
the
model,
which
in
any
case
may
result
in
a
failure
of
the
portfolio
to
perform
as
expected
or
a
failure
to
identify
securities
that
will
perform
well
in
the
future.
Investment
Securities:
Level
1
Level
2
Level
3
Total
Affiliated
Investment
Company
$
315,196,873
$
—
$
—
$
315,196,873
Total
Investment
Securities
315,196,873
—
—
315,196,873
Other
Financial
Instruments:
*
Futures
Contracts
300,770
—
—
300,770
Total
Investments
$315,497,643
$—
$—
$315,497,643
*
Other
Financial
Instruments
would
include
any
derivative
instruments,
such
as
futures
contracts.
These
investments
are
generally
presented
in
the
Statement
of
Assets
and
Liabilities
at
variation
margin.
Purchases
Sales
AZL
MVP
FIAM
Multi-Strategy
Fund
$167,922,838
$60,639,031
AZL
MVP
FIAM
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
12
7.
Federal
Tax
Information
It
is
the
policy
of
the
Fund
to
continue
to
qualify
as
a
regulated
investment
company
by
complying
with
the
provisions
available
to
certain
investment
companies,
as
defined
under
Subchapter
M
of
the
Internal
Revenue
Code,
and
to
make
distributions
of
net
investment
income
and
net
realized
gains
sufficient
to
relieve
it
from
all,
or
substantially
all,
federal
income
taxes.
Accordingly,
no
provisions
for
federal
income
taxes
are
required
in
the
financial
statements.
Management
of
the
Fund
has
reviewed
tax
positions
taken
in
tax
years
that
remain
subject
to
examination
by
all
major
tax
jurisdictions,
including
federal
(i.e.,
the
last
four
tax
year
ends
and
the
interim
tax
period
since
then,
as
applicable).
Management
believes
that
there
is
no
tax
liability
resulting
from
unrecognized
tax
benefits
related
to
uncertain
tax
positions
taken.
Cost
of
securities,
including
derivatives
and
short
positions
as
applicable,
for
federal
income
tax
purposes
at
December
31,
2023
was
$283,978,278.
The
gross
unrealized
appreciation/
(depreciation)
on
a
tax
basis
was
as
follows:
As
of
the
end
of
its
tax
year
ended
December
31,
2023,
the
Fund
had
capital
loss
carry
forwards
(“CLCFs”)
as
summarized
in
the
table
below.
The
Board
does
not
intend
to
authorize
a
distribution
of
any
realized
gain
for
the
Fund
until
any
applicable
CLCF
has
been
offset.
CLCFs
not
subject
to
expiration:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2023, was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2022, was
as
follows:
At
December
31,
2023,
the
components
of
accumulated
earnings
on
a
tax
basis
were
as
follows:
8.
Ownership
and
Principal
Holders
The
beneficial
ownership,
either
directly
or
indirectly,
of
more
than
25%
of
the
voting
securities
of
a
fund
creates
presumptions
of
control
of
the
fund,
under
section
2
(a)(9)
of
the
1940
Act.
As
of
December
31,
2023,
the
Fund
had
an
individual
shareholder
account
which
is
affiliated
with
the
Manager
representing
ownership
in
excess
of
85%
of
the
Fund.
Investment
activities
of
this
shareholder
could
have
a
material
impact
to
the
Fund.
Unrealized
appreciation
$31,218,595
Unrealized
(depreciation)
—
Net
unrealized
appreciation/(depreciation)
$31,218,595
Short-Term
Amount
Long-Term
Amount
Total
AZL
MVP
FIAM
Multi-Strategy
Fund
$2,368,979
$—
$2,368,979
During
the
year
ended
December
31,
2023,
the
Fund
utilized
$2,042,274
in
CLCFs
to
offset
capital
gains.
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
FIAM
Multi-Strategy
Fund
$4,941,197
$—
$4,941,197
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
FIAM
Multi-Strategy
Fund
$7,184,253
$3,099,512
$10,283,765
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Undistributed
Ordinary
Income
Undistributed
Long-Term
Capital
Gains
Accumulated
Capital
and
Other
Losses
Unrealized
Appreciation/
Depreciation(a)
Total
Accumulated
Earnings/
(Deficit)
AZL
MVP
FIAM
Multi-Strategy
Fund
$5,329,857
$—
$(2,368,979)
$31,218,595
$34,179,473
(a)
The
differences
between
book-basis
and
tax-basis
unrealized
appreciation/(depreciation)
are
attributable
primarily
to
tax
deferral
of
losses
on
wash
sales,
mark-to-market
of
futures
contracts
and
straddles.
AZL
MVP
FIAM
Multi-Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
13
9.
Acquisition
of
Funds
Effective
as
of
the
close
of
business
March
10,
2023,
the
Fund
acquired
all
the
assets
and
liabilities
of
the
AZL
MVP
Fusion
Conservative
Fund
(“MVP
Fusion
Conservative
Fund”),
an
open-end
management
investment
company,
pursuant
to
a
plan
of
reorganization
approved
by
the
Board
on
December
13,
2022
(the
“Plan”).
The
acquisition
was
accomplished
by
a
taxable
exchange
of
17,761,854
shares
of
the
MVP
Fusion
Conservative
Fund
outstanding
as
of
close
of
business
March
10,
2023,
valued
at
$165,908,114
for
14,877,903
shares
of
the
Fund.
At
the
close
of
business
March
10,
2023,
the
MVP
Fusion
Conservative
Fund’s
investment
holdings
had
a
fair
value
of
$157,511,590
and
identified
cost
of
$157,511,590.
For
financial
reporting
purposes,
assets
received
and
shares
issued
by
the
Fund
were
recorded
at
fair
value,
including
the
cost
basis
of
investments
received.
All
fees
and
expenses
incurred
by
the
MVP
Fusion
Conservative
Fund
and
the
Fund
directly
in
connection
with
the
Plan
were
borne
by
the
Manager.
There
are
no
material
differences
in
accounting
policies
of
the
MVP
Fusion
Conservative
Fund
as
compared
to
those
of
the
Fund.
Assuming
the
acquisition
had
been
completed
on
January
1,
2023,
the
beginning
of
the
annual
reporting
period
of
the
Fund,
the
Fund’s
pro
forma
results
of
operations
for
the year
ended December
31,
2023,
are
as
follows:
Because
the
combined
investment
portfolios
have
been
managed
as
a
single
integrated
portfolio
since
the
acquisition
was
completed,
it
is
not
practicable
to
separate
the
amounts
of
revenue
and
earnings
of
the
MVP
Fusion
Conservative
Fund
that
have
been
included
in
the
Fund’s
Statement
of
Operations
subsequent
to
March
10,
2023.
The
Fund
did
not
purchase
or
sell
securities
following
the
acquisition
for
purposes
of
realigning
its
investment
portfolio.
Accordingly,
the
acquisition
of
the
MVP
Fusion
Conservative
Fund
did
not
affect
the
Fund’s
portfolio
turnover
ratio
for
the
year
ended
December
31,
2023.
10.
Recent
Regulatory
Pronouncements
Effective
January
24,
2023,
the
SEC
adopted
rule
and
form
amendments
that
require
open-end
management
investment
companies
to
transmit
concise
and
visually
engaging
annual
and
semi-annual
reports
to
shareholders
that
highlight
key
information.
Other
information,
including
financial
statements,
will
no
longer
appear
in
a
tailored
shareholder
report
but
must
be
available
online,
delivered
free
of
charge
upon
request,
and
filed
on
a
semi-annual
basis
on
Form
N-CSR.
The
rule
and
form
amendments
have
a
compliance
date
of
July
24,
2024.
Accordingly,
the
rule
and
form
amendments
will
not
impact
the
Fund
until
the
2024
semi-annual
shareholder
report
and
will
have
no
effect
on
the
Fund’s
accounting
policies
or
financial
statements.
11.
Subsequent
Events
Management
of
the
Fund
has
evaluated
the
need
for
additional
disclosures
or
adjustments
resulting
from
events
through
the
date
the
financial
statements
were
issued.
Based
on
this
evaluation,
there
were
no
subsequent
events
to
report
that
would
have
material
impact
on
the
Fund’s
financial
statements.
Net
investment
income/(loss)
$6,539,734
Net
realized/unrealized
gains/(losses)
34,500,077
Change
in
net
assets
resulting
from
operations
$41,039,811
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
14
To
the
Board
of
Trustees
of
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
Shareholders
of
AZL
MVP
Fidelity
Institutional
Asset
Management
Multi-Strategy
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
schedule
of
portfolio
investments,
of
AZL
MVP
Fidelity
Institutional
Asset
Management
Multi-
Strategy
Fund
(one
of
the
funds
constituting
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust,
referred
to
hereafter
as
the
"Fund")
as
of
December
31,
2023,
the
related
statement
of
operations
for
the
year
ended
December
31,
2023,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2023,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2023
by
correspondence
with
the
transfer
agent
and
brokers.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
/s/
PricewaterhouseCoopers
LLP
New
York,
New
York
February
22,
2024
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Allianz
Variable
Insurance
Products
complex
since
2018.
15
Other
Federal
Income
Tax
Information
(Unaudited)
For
the
year
ended
December
31,
2023,
36.64%
of
the
total
ordinary
income
dividends
paid
by
the
Fund
qualify
for
the
corporate
dividends
received
deductions
available
to
corporate
shareholders.
16
Other
Information
(Unaudited)
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities
is
available,
without
charge,
upon
request,
by
visiting
the
Securities
and
Exchange
Commission’s
(‘‘Commission’’)
website
at
www.sec.gov,
or
by
calling
800-624-0197.
Information
regarding
how
the
Fund
voted
proxies
relating
to
portfolio
securities
during
the
most
recent
12-month
period
ended
June
30th
is
available
(i)
without
charge,
upon
request,
by
calling
800-624-0197;
(ii)
on
the
Trust’s
website
at
https://www.allianzlife.com;
and
(iii)
on
the
Commission’s
website
at
http://www.sec.gov
.
The
Fund
files
complete
Schedules
of
Portfolio
Holdings
with
the
Commission
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Schedules
of
Portfolio
Holdings
for
the
Fund
are
available
without
charge
on
the
Commission’s
website
at
http://www.sec.gov,
or
may
be
obtained
by
calling
800-624-0197.
17
Approval
of
Investment
Advisory
Agreement
(Unaudited)
Subject
to
the
general
supervision
of
the
Board
of
Trustees
(the
“Board”)
and
in
accordance
with
the
investment
objectives
and
restrictions
of
each
separate
series
(each
a
“Fund,”
together,
the
“Funds”)
of
the
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”),
investment
advisory
services
are
provided
to
the
Funds
by
Allianz
Investment
Management
LLC
(the
“Manager”).
The
Manager
manages
each
Fund
pursuant
to
an
investment
management
agreement
(the
“Management
Agreement”)
with
the
Trust
in
respect
of
each
such
Fund.
The
Management
Agreement
provides
that
the
Manager,
subject
to
the
supervision
and
approval
of
the
Board,
is
responsible
for
the
management
of
each
Fund.
For
management
services,
each
Fund
pays
the
Manager
an
investment
advisory
fee
based
upon
each
Fund’s
average
daily
net
assets.
The
Manager
has
contractually
agreed
to
limit
the
expenses
of
each
Fund
by
reimbursing
the
Fund
if
and
when
total
Fund
operating
expenses
exceed
certain
amounts
until
at
least
April
30,
2025
(the
“Expense
Limitation
Agreement”).
In
reviewing
the
services
provided
by
the
Manager
and
the
terms
of
the
Management
Agreement,
the
Board
receives
and
reviews
information
related
to
the
Manager’s
experience
and
expertise
in
the
variable
insurance
marketplace.
In
addition,
the
Board
receives
information
regarding
the
Manager’s
expertise
with
regard
to
portfolio
diversification
and
asset
allocation
requirements
within
variable
insurance
products
issued
by
Allianz
Life
Insurance
Company
of
North
America
(“Allianz
Life”)
and
its
subsidiary,
Allianz
Life
Insurance
Company
of
New
York
(“Allianz
of
New
York”).
Currently,
the
Funds
are
offered
only
through
Allianz
Life
and
Allianz
of
New
York
variable
products,
and
not
in
the
retail
fund
market.
As
required
by
the
Investment
Company
Act
of
1940
(the
“1940
Act”),
the
Board
has
reviewed
and
approved
the
Management
Agreement
with
the
Manager.
The
Board’s
decision
to
approve
this
contract
reflects
the
exercise
of
its
business
judgment
on
whether
to
approve
new
arrangements
and
continue
the
existing
arrangements.
During
its
review
of
the
contract,
the
Board
considered
many
factors,
among
the
most
material
of
which
are:
the
Fund’s
investment
objectives
and
long-term
performance;
the
Manager’s
management
philosophy,
personnel,
processes
and
investment
performance,
including
its
compliance
history
and
the
adequacy
of
its
compliance
processes;
the
preferences
and
expectations
of
Fund
shareholders
(and
underlying
contract
owners)
and
their
relative
sophistication;
the
continuing
state
of
competition
in
the
mutual
fund
industry;
and
comparable
fees
in
the
mutual
fund
industry.
The
Board
also
considered
the
compensation
and
benefits
received
by
the
Manager.
This
includes
fees
received
for
services
provided
to
a
Fund
by
employees
of
the
Manager
or
of
affiliates
of
the
Manager
and
research
services
received
by
the
Manager
from
brokers
that
execute
Fund
trades,
as
well
as
advisory
fees.
The
Board
considered
the
fact
that:
(1) the
Manager
and
the
Trust
are
parties
to
an
Administrative
Services
Agreement
and
a
Compliance
Services
Agreement,
under
which
the
Manager
is
compensated
by
the
Trust
for
performing
certain
administrative
and
compliance
services
including
providing
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer;
and
(2) Allianz
Life
Financial
Services,
LLC,
an
affiliated
person
of
the
Manager,
is
a
registered
securities
broker-dealer
and
received
(along
with
its
affiliated
persons)
payments
made
by
the
underlying
funds
pursuant
to
Rule 12b1.
The
Board
is
aware
that
various
courts
have
interpreted
provisions
of
the
1940
Act
and
have
indicated
in
their
decisions
that
the
following
factors
may
be
relevant
to
an
adviser’s
compensation:
the
nature,
extent
and
quality
of
the
services
provided
by
the
adviser,
including
the
performance
of
the
fund;
the
adviser’s
cost
of
providing
the
services;
the
extent
to
which
the
adviser
may
realize
“economies
of
scale”
as
the
fund
grows
larger;
any
indirect
benefits
that
may
accrue
to
the
adviser
and
its
affiliates
as
a
result
of
the
adviser’s
relationship
with
the
fund;
performance
and
expenses
of
comparable
funds;
the
profitability
of
acting
as
adviser
to
the
fund;
and
the
extent
to
which
the
independent
Board
members,
who
are
not
“interested
persons”
of
a
fund
as
defined
by
the
1940
Act
(“Independent
Trustees”),
are
fully
informed
about
all
facts
bearing
on
the
adviser’s
services
and
fees.
The
Board
is
aware
of
these
factors
and
takes
them
into
account
in
its
review
of
the
Management
Agreement
for
the
Funds.
Each
member
of
the
Board
considered
and
weighed
these
factors
in
light
of
his
or
her
experience
in
governing
the
Trust.
The
Board
is
assisted
in
its
deliberations
by
the
advice
of
independent
legal
counsel
to
the
Independent
Trustees
(“Independent
Trustee
Counsel”).
In
this
regard,
the
Board
requests
and
receives
a
significant
amount
of
information
about
the
Funds
and
the
Manager.
Some
of
this
information
is
provided
at
each
regular
meeting
of
the
Board;
additional
information
is
provided
in
connection
with
the
particular
meetings
at
which
the
Board’s
formal
review
of
the
Management
Agreement
occurs.
In
between
regularly
scheduled
meetings,
the
Board
may
receive
information
on
particular
matters
as
the
need
arises.
Thus,
the
Board’s
evaluation
of
the
Management
Agreement
is
informed
by
reports
covering
such
matters
as:
the
Manager’s
investment
philosophy,
personnel
and
processes,
and
the
Fund’s
investment
performance
(in
absolute
terms
as
well
as
in
relationship
to
its
benchmark
and
certain
competitor
or
“peer
group”
funds).
In
connection
with
comparing
the
performance
of
each
Fund
versus
its
benchmark,
the
Board
receives
reports
on
the
extent
to
which
the
Fund’s
performance
may
be
attributed
to
various
applicable
factors,
such
as
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
rebalancing
decisions,
and
the
impact
of
cash
positions
and
Fund
fees
and
expenses.
The
Board
also
receives
reports
on
the
Funds’
expenses
(including
the
advisory
fee
itself
and
the
overall
expense
structure
of
the
Funds,
both
in
absolute
terms
and
relative
to
peer
group
and/or
competing
funds,
with
due
regard
for
the
Expense
Limitation
Agreement
and
additional
voluntary
expense
limitations);
the
use
and
allocation
of
any
brokerage
commissions
derived
from
trading
the
Funds’
portfolio
securities;
the
nature,
extent
and
quality
of
the
advisory
and
other
services
provided
to
the
Fund
by
the
Manager
and
its
affiliates;
compliance
and
audit
reports
concerning
the
Funds
and
the
companies
that
service
them;
and
relevant
developments
in
the
mutual
fund
industry
and
how
the
Funds
and/or
the
Manager
are
responding
to
them.
The
Board
also
receives
financial
information
about
the
Manager,
including
reports
on
the
compensation
and
benefits
the
Manager
derives
from
its
relationships
with
the
Funds.
These
reports
cover
not
only
the
fees
under
the
Management
Agreement,
but
also
the
fees,
if
any,
received
for
providing
other
services
to
the
Funds.
The
reports
also
discuss
any
indirect
or
“fall-out”
benefits
the
Manager
or
its
affiliates
may
derive
from
their
relationships
with
the
Funds.
The
Management
Agreement
was
most
recently
considered
at
Board
meetings
held
in
the
summer
and
fall
of
2023.
Information
relevant
to
the
approval
of
the
Management
Agreement
was
considered
at
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
as
well
as
at
various
other
meetings
preceding
those
meetings.
Accordingly,
the
Management
Agreement
was
approved
by
the
Board
at
an
in-person
meeting
on
September
19,
2023.
At
such
meeting
the
Board
also
approved
the
Expense
Limitation
Agreement
between
the
Manager
and
the
Trust
for
the
period
ending
April 30,
2025.
In
connection
with
such
meetings,
the
Board
requested
and
evaluated
extensive
materials
from
the
Manager,
including
performance
and
expense
information
for
other
investment
companies
with
similar
investment
objectives
derived
from
data
compiled
by
an
independent
third-party
provider
and
other
sources
believed
to
be
reliable
by
the
Manager
and
the
Trustees.
Prior
to
voting,
the
Trustees
reviewed
the
proposed
approval
of
the
Management
Agreement
with
management
and
with
Independent
Trustee
Counsel
and
received
a
memorandum
from
such
counsel
discussing
the
legal
standards
for
their
consideration
of
the
proposed
approval.
The
Independent
Trustees
also
discussed
the
proposed
approval
in
private
sessions
with
Independent
Trustee
Counsel
at
which
no
representatives
of
the
Manager
were
present.
In
reaching
their
determinations
relating
to
the
approval
of
the
Management
Agreement,
in
respect
of
each
Fund,
each
member
of
the
Board
considered
all
factors
he
or
she
believed
relevant.
The
Board
based
its
decision
to
approve
18
the
Management
Agreement
on
the
totality
of
the
circumstances
and
relevant
factors,
and
with
a
view
to
past
and
future
long-term
considerations.
Not
all
of
the
factors
and
considerations
discussed
above
and
below
are
necessarily
relevant
to
every
Fund,
and
the
Board
did
not
assign
relative
weights
to
factors
discussed
herein
or
deem
any
one
or
group
of
them
to
be
controlling
in
and
of
themselves.
Shareholder
reports
must
include
a
discussion
of
certain
factors
relating
to
the
selection
of
the
investment
adviser
and
the
approval
of
the
advisory
fee.
The
“factors”
enumerated
by
the
SEC
are
set
forth
below
in
italics,
as
well
as
the
Board’s
conclusions
regarding
such
factors:
(1)
The
nature,
extent
and
quality
of
services
provided
by
the
Manager.
The
Trustees
noted
that
the
Manager,
subject
to
the
oversight
of
the
Board,
administers
each
Fund’s
business
and
other
affairs.
The
Trustees
noted
that
the
Manager
also
provides
the
Trust
and
each
Fund
with
such
administrative
and
other
services
(exclusive
of,
and
in
addition
to,
any
such
services
provided
by
any
other
service
providers
retained
by
the
Trust
on
behalf
of
the
Funds)
and
executive
and
other
personnel
as
are
necessary
for
the
operation
of
the
Trust
and
the
Funds.
Except
for
the
Trust’s
Chief
Compliance
Officer
and
certain
compliance
staff,
the
Manager
pays
all
of
the
compensation
of
Trustees
and
officers
of
the
Trust
who
are
employees
of
the
Manager
or
its
affiliates.
The
Board
considered
the
scope
and
quality
of
services
provided
by
the
Manager
and
noted
that
the
scope
of
the
services
provided
has
continued
to
expand
as
a
result
of
regulatory
and
other
developments.
The
Board
noted,
for
example,
that
the
Manager
is
responsible
for
maintaining
and
monitoring
its
own
compliance
program,
and
this
compliance
program
has
been
continuously
refined
and
enhanced
in
light
of
new
regulatory
requirements.
The
Board
considered
the
capabilities
and
resources
which
the
Manager
has
dedicated
to
performing
services
on
behalf
of
the
Trust
and
its
Funds.
The
quality
of
administrative
and
other
services,
including
the
Manager’s
role
in
coordinating
the
activities
of
the
Trust’s
other
service
providers,
also
were
considered.
The
Board
concluded
that,
overall,
they
were
satisfied
with
the
nature,
extent
and
quality
of
services
provided
(and
expected
to
be
provided)
to
the
Trust
and
to
each
of
the
Funds
under
the
Management
Agreement.
(2)
The
investment
performance
of
the
Funds
and
the
Manager.
In
connection
with
every
quarterly
Board
meeting
and
the
summer
and
fall
2023
contract
review
process,
Trustees
received
extensive
information
on
the
performance
results
of
each
Fund.
This
included,
for
example,
performance
information
on
absolute
total
return,
performance
versus
the
appropriate
benchmark(s)
and
performance
versus
peer
groups
as
reported
by
Lipper,
the
contribution
to
performance
of
the
Manager’s
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
and
the
impact
on
performance
of
rebalancing
decisions,
cash
and
Fund
fees.
This
included
Lipper
performance
information
on
the
Funds
for
the
previous
quarter,
and
previous
one-,
three-
and
five-year
periods,
to
the
extent
available.
For
example,
in
connection
with
the
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
the
Manager
reported
that,
for
the
five-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
reported
that
for
the
three-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
four
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
also
reported
on
the
performance
of
the
MVP
Funds
compared
to
custom
managed-volatility
peer
groups.
For
the
five-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
middle
20%
of
its
respective
custom
managed-volatility
peer
group.
For
the
three-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%
and
three
were
in
the
middle
20%
of
their
respective
custom
managed-volatility
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
bottom
40%
of
its
respective
custom
managed-volatility
peer
group.
The
Board
members
discussed
with
the
Manager
and
considered
the
impact
of
the
volatility
management
strategies
on
performance
in
different
market
environments,
where
applicable,
and
considered
whether
they
were
operating
as
intended.
The
Board
noted,
in
particular,
the
impact
on
longer-term
performance
of
certain
characteristics
of
the
Funds’
volatility
management
strategies
in
relation
to
volatility
experienced
as
a
result
of
the
COVID-19
pandemic,
and
that
relative
performance
had
improved
as
the
markets
stabilized.
At
the
Board
meeting
held
September
19,
2023,
the
Board
also
received
updated
performance
information
for
the
Funds,
including
updated
Lipper
peer
group
ranking
information,
for
various
periods
ending
June
30,
2023.
At
the
Board
meeting
held
September
19,
2023,
the
Trustees
determined
that
the
investment
performance
of
the
Funds
was
acceptable.
(3)
The
costs
of
services
to
be
provided
and
profits
to
be
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Funds.
The
Board
considered
that
the
Manager
receives
an
advisory
fee
from
each
of
the
Funds.
The
Manager
reported
that
for
the
four
MVP
Index
Strategy
Funds,
the
advisory
fee
paid
was
in
the
31st
percentile
of
the
customized
peer
group,
and
for
the
AZL
Balanced
Index
Strategy
Fund,
the
advisory
fee
paid
was
in
the
8th
percentile
of
the
customized
peer
group.
The
Manager
reported
that
for
the
AZL
DFA
Multi-Strategy
Fund,
the
advisory
fee
paid
was
in
the
6th
percentile.
The
Manager
reported
that
for
the
AZL
MVP
DFA
Multi-Strategy,
AZL
MVP
FIAM
Multi-Strategy,
and
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Funds,
the
advisory
fee
paid
was
in
the
1st
percentile.
(A
lower
percentile
reflects
lower
fund
fees
and
is
better
for
fund
shareholders.)
Trustees
were
provided
with
information
on
the
total
expense
ratios
of
the
Funds
and
other
funds
in
the
customized
peer
groups,
and
the
Manager
reported
upon
the
challenges
in
making
peer
group
comparisons
for
the
Funds.
The
Board
further
considered
and
found
that
the
advisory
fee
paid
to
the
Manager
with
respect
to
each
Fund
was
based
on
services
provided
to
the
Fund
that
were
in
addition
to,
rather
than
duplicative
of,
the
services
provided
pursuant
to
the
advisory
agreements
for
the
underlying
funds
in
which
the
Fund
invests.
The
Manager
provided
information
concerning
the
profitability
of
the
Manager’s
investment
advisory
activities
for
the
period
from
2020
through
2022.
The
Board
recognized
that
it
is
difficult
to
make
comparisons
of
profitability
from
investment
company
advisory
agreements
because
comparative
information
is
not
generally
publicly
available
and
is
affected
by
numerous
factors,
including
the
structure
of
the
particular
adviser,
the
types
of
funds
it
manages,
its
business
mix,
numerous
assumptions
regarding
allocation
of
expenses
and
the
adviser’s
capital
structure
and
cost
of
capital.
In
considering
profitability
information,
the
Board
considered
the
possible
effect
of
certain
fall-out
benefits
to
the
Manager
and
its
affiliates.
The
Board
focused
on
profitability
of
the
Manager’s
relationships
with
the
Funds
before
taxes
and
distribution
expenses.
The
Board
recognized
that
the
Manager
should
earn
a
reasonable
level
of
profits
for
the
services
it
provides
to
each
Fund.
(4)
and
(5)
The
extent
to
which
economies
of
scale
would
be
realized
as
the
Funds
grow,
and
whether
fee
levels
reflect
these
economies
of
scale.
The
Board
noted
that
the
advisory
fee
schedules
for
the
Funds
do
not
contain
breakpoints
that
reduce
the
fee
rate
on
assets
above
specified
levels.
The
Board
recognized
that
breakpoints
may
be
an
appropriate
way
for
the
Manager
to
share
its
economies
of
scale,
if
any,
with
Funds
that
have
substantial
assets.
The
Board
found
there
was
no
uniform
methodology
for
establishing
breakpoints
that
give
effect
to
Fund-specific
services
provided
by
the
Manager.
The
Board
noted
that
in
the
fund
industry
as
a
whole,
as
well
as
among
funds
similar
to
the
Funds,
there
is
no
uniformity
or
pattern
in
the
fees
and
asset
levels
at
which
breakpoints
(if
any)
apply.
Depending
on
the
age,
size,
and
other
characteristics
of
a
particular
fund
and
its
manager’s
cost
structure,
different
conclusions
can
be
drawn
as
to
whether
there
are
economies
of
scale
to
be
realized
at
any
particular
level
of
assets,
notwithstanding
the
intuitive
conclusion
that
such
economies
exist,
or
will
be
realized
at
some
level
of
total
assets.
Moreover,
because
different
managers
have
different
cost
structures
and
service
models,
it
is
difficult
to
draw
meaningful
19
conclusions
from
the
breakpoints
that
may
have
been
adopted
by
other
funds.
The
Board
also
noted
that
the
advisory
agreements
for
many
funds
do
not
have
breakpoints
at
all,
or
if
breakpoints
exist,
they
may
be
at
asset
levels
significantly
greater
than
those
of
the
individual
Funds.
The
Board
noted
that
the
total
assets
in
all
of
the
Funds,
as
of
June
30,
2023,
were
approximately
$7.8 billion
and
that
the
largest
Fund,
the
AZL
MVP
Growth
Index
Strategy
Fund,
had
assets
of
approximately
$2.0 billion.
The
Board
noted
that
the
Manager
has
agreed
to
temporarily
limit
Fund
expenses
under
the
Expense
Limitation
Agreement,
which
has
the
effect
of
reducing
expenses
similar
to
implementation
of
advisory
fee
breakpoints.
The
Manager
has
committed
to
continue
to
consider
the
continuation
of
expense
limits
and/or
advisory
fee
breakpoints
as
Fund
assets
change.
The
Board
receives
quarterly
reports
on
the
level
of
Fund
assets.
The
Board
expects
to
continue
to
consider:
(a) the
extent
to
which
economies
of
scale
have
been
realized,
and
(b) whether
the
advisory
fee
should
be
modified,
either
in
connection
with
the
next
renewal
of
the
Management
Agreement
or
by
modifying
the
Expense
Limitation
Agreement,
to
reflect
such
economies
of
scale,
if
any.
Having
taken
these
factors
into
account,
the
Board
concluded
that
the
absence
of
breakpoints
in
the
Funds’
advisory
fee
rate
schedules
was
acceptable
under
each
Fund’s
circumstances.
In
conclusion,
after
full
consideration
of
the
above
factors,
as
well
as
such
other
factors
as
each
member
of
the
Board
considered
instructive
in
evaluating
the
Management
Agreement,
the
Board
concluded
that
the
advisory
fees
were
reasonable,
and
that
the
continuation
of
the
Management
Agreement
was
in
the
best
interest
of
the
Funds.
20
Information
about
the
Board
of
Trustees
and
Officers
(Unaudited)
The
Trust
is
managed
by
the
Trustees
in
accordance
with
the
laws
of
the
state
of
Delaware
governing
business
trusts.
In
addition
to
serving
on
the
Board
of
Trustees
of
the
Trust,
each
Trustee
serves
on
the
Board
of
the
Allianz
Variable
Insurance
Products
Trust
(“VIP
Trust”)
and
the
AIM
ETF
Products
Trust
(“ETF
Trust”)
(collectively,
the
Trust,
the
VIP
Trust,
and
ETF
Trust
are
the
“AIM
Complex”).
There
are
currently
six
Trustees,
one
of
whom
is
an
“interested
person”
of
the
Trust
within
the
meaning
of
that
term
under
the
1940
Act.
The
Trustees
and
Officers
of
the
Trust,
their
addresses,
years
of
birth,
their
positions
held
with
the
Trust,
their
terms
of
office
with
the
Trust
and
length
of
time
served,
their
principal
occupation(s)
during
the
past
five
years,
the
number
of
portfolios
in
the
Trust
they
oversee,
and
their
other
directorships
held
during
the
past
five
years
are
as
follows:
Independent
Trustees
(
1)
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Peggy
L.
Ettestad
(1957)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Lead
Independent
Trustee
Since
10/14
(Trustee
since
2/07)
Managing
Director,
Red
Canoe
Management
Consulting
LLC,
2008
to
present
56
None
Tamara
Lynn
Fagely
(1958)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Chief
Operations
Officer,
Hartford
Funds,
2012
to
2013
56
Diamond
Hill
Funds
(10
Funds)
Richard
H.
Forde
(1953)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Member
of
the
Board
and
Chairman
of
the
Finance
and
Investment
Committee,
Connecticut
Water
Service,
Inc.,
2013
to
2019
56
Connecticut
Water
Service,
Inc.
Jack
Gee
(1959)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
01/22
Retired;
previously,
Managing
Director,
BlackRock,
Inc.,
Treasurer
and
Chief
Financial
Officer
U.S.
iShares,
2004
to
2019
56
TCW
ETF
Trust
(3
Funds);
Esoterica
Thematic
Trust
(2019
-
2020)
Claire
R.
Leonardi
(1955)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
02/04
Retired;
previously,
CEO,
Health
eSense
Inc.
(a
medical
device
company),
2015
to
2018,
and
Connecticut
Innovations,
Inc.
(a
venture
capital
firm),
2012
to
2015
56
None
21
Interested
Trustee
(
3)
(1)
Each
of
the
Independent
Trustees
is
a
member
of
the
Audit
and
Operational
Risk
Oversight
Committee.
(2)
Indefinite.
(3)
Is
an
“interested
person,”
as
defined
by
the
1940
Act,
due
to
employment
by
Allianz
Life
and
the
Manager.
Officers
(1)
Indefinite.
(2)
The
Manager
and
the
Trust
are
parties
to
a
Compliance
Services
Agreement
under
which
the
Manager
provides
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer.
The
Fund’s
Statement
of
Additional
Information
(“SAI”)
contains
additional
information
about
the
Trust’s
Trustees
and
Officers.
The
SAI
is
available
without
charge,
upon
request,
by
calling
toll-free
800-624-0197
or
at
https://www.allianzlife.com.
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
06/11
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
56
None
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(1)
/
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
President
Since
11/10
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
Amanda
Farren
(1978)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Secretary
Since
02/24
Chief
Legal
Officer,
Allianz
Investment
Management
LLC;
Senior
Counsel,
Allianz
Life,
January
2024
to
present;
Senior
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2023;
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2015
-2023
Bashir
C.
Asad
(1963)
Citi
Fund
Services
Ohio,
Inc.
4400
Easton
Commons,
Suite
200
Columbus,
OH
43219
Treasurer,
Principal
Accounting
Officer
and
Principal
Financial
Officer
Since
06/16
Senior
Vice
President,
Citi
Fund
Services
Ohio,
Inc.,
2011
to
present
Chris
R.
Pheiffer
(1968)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Chief
Compliance
Officer
(2)
and
Anti-Money
Laundering
Compliance
Officer
Since
02/14
Chief
Compliance
Officer
of
the
Trust
and
the
VIP
Trust,
2014
to
present,
and
the
ETF
Trust,
2020
to
present
Michael
Tanski
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
04/09
Assistant
Vice
President,
Allianz
Investment
Management
LLC,
2013
to
present.
Laura
Quade
(1969)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
08/23
Vice
President,
Allianz
Investment
Management
LLC,
2023
to
present,
previously
Director
at
Wealth
Enhancement
Group,
November
2019
to
November
2022;
Vice
President,
Head
of
Operations
at
Hartford
Funds
2014
to
2019
ANNRPT1223
02/24
The
Allianz
VIP
Fund
of
Funds
are
distributed
by
Allianz
Life
Financial
Services,
LLC.
These
Funds
are
not
FDIC
Insured.
AZL®
MVP
Global
Balanced
Index
Strategy
Fund
Annual
Report
December
31,
2023
Table
of
Contents
AZL®
MVP
Global
Balanced
Index
Strategy
Fund
Management
Discussion
and
Analysis
Page
1
Expense
Examples
and
Portfolio
Composition
Page
3
Schedule
of
Portfolio
Investments
Page
4
Statement
of
Assets
and
Liabilities
Page
5
Statement
of
Operations
Page
5
Statements
of
Changes
in
Net
Assets
Page
6
Financial
Highlights
Page
7
Notes
to
the
Financial
Statements
Page
8
Report
of
Independent
Registered
Public
Accounting
Firm
Page
15
Other
Federal
Income
Tax
Information
Page
16
Other
Information
Page
17
Approval
of
Investment
Advisory
Agreement
Page
18
Information
about
the
Board
of
Trustees
and
Officers
Page
21
This
report
is
submitted
for
the
general
information
of
the
shareholder
of
the
Fund.
The
report
is
not
authorized
for
distribution
to
prospective
investors
in
the
Fund
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
contains
details
concerning
the
sales
charges
and
other
pertinent
information.
1
AZL®
MVP
Global
Balanced
Index
Strategy
Fund
Review
(Unaudited)
Allianz
Investment
Management
LLC
serves
as
the
Manager
for
the
AZL
®
MVP
Global
Balanced
Index
Strategy
Fund.
What
factors
affected
the
Fund’s
performance
during
the
year
ended
December
31,
2023?*
For
the
year
ended
December
31,
2023,
the
AZL
MVP
Global
Balanced
Index
Strategy
Fund
(the
“Fund”)
returned
13.85%.
That
compared
to
23.79%,
5.53%
and
14.72%
total
return
for
its
benchmarks,
the
MSCI
World
Index,
the
Bloomberg
U.S.
Aggregate
Bond
Index,
and
the
Global
Balanced
Composite
Index,
respectively.
1
The
Fund
is
a
fund
of
funds
that
pursues
broad
global
diversification.
The
underlying
equity
sub-portfolio
pursues
passive
strategies
that
aim
to
achieve,
before
fees,
returns
similar
to
the
MSCI
World
Index,
which
represents
shares
of
large-
and
mid-cap
companies
in
developed
market
countries.
The
fixed-income
sub-portfolio
is
an
enhanced
bond
index
strategy
that
seeks
to
achieve
a
return
that
exceeds
that
of
the
Bloomberg
U.S.
Aggregate
Bond
Index.
The
Fund
also
employs
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process,
which
is
intended
to
adjust
the
risk
of
the
portfolio
based
on
quantitative
indicators
of
market
risk,
such
as
the
current
level
of
Fund
and
market
volatility.
Generally,
the
Fund
allocates
40%
to
60%
of
its
assets
to
the
underlying
equity
index
fund
and
between
40%
and
60%
to
the
underlying
AZL
Enhanced
Bond
Index
Fund.
U.S.
equities,
particularly
large-cap
stocks,
posted
positive
performance
in
2023.
The
gains
were
due
in
part
to
falling
inflation
and
better-than-expected
earnings,
as
well
as
resilient
consumer
demand.
The
European
Central
Bank’s
(ECB)
monetary
tightening
had
a
negative
effect
on
economic
growth
in
the
Eurozone,
and
Russia’s
war
with
Ukraine
continued
to
weigh
on
international
equities.
The
U.S.
fixed
income
market
received
a
boost
after
the
Federal
Reserve
announced
a
possible
end
to
future
interest
rate
hikes.
Most
sectors
of
the
bond
market
finished
with
positive
performance
in
2023.
The
Fund,
which
invests
in
both
U.S.
and
international
markets,
underperformed
its
composite
benchmark
in
2023.
The
equity
and
fixed
income
allocations
underperformed
their
respective
blended
benchmarks
primarily
due
to
the
underlying
fund
fees.
The
Fund’s
fixed
income
allocation
benefited
on
a
relative
basis
from
security
selection,
particularly
in
investment
grade
credit
and
agency-backed
securities.
The
MVP
risk
management
process
uses
derivatives
to
seek
to
control
portfolio
volatility
in
unstable
market
conditions.
The
MVP
process
was
engaged
during
the
year
and
reduced
the
Fund’s
equity
exposure
at
multiple
points
during
the
year.
The
MVP
process
slightly
detracted
from
the
Fund’s
performance
during
2023.
Past
performance
does
not
guarantee
future
results.
*
The
Fund’s
portfolio
composition
is
subject
to
change.
There
is
no
guarantee
that
any
sectors
mentioned
will
continue
to
perform
as
described
or
that
securities
in
such
sectors
will
be
held
by
the
Fund
in
the
future.
The
information
contained
in
this
commentary
is
for
informational
purposes
only
and
should
not
be
construed
as
a
recommendation
to
purchase
or
sell
securities
in
the
sector
mentioned.
The
Fund’s
holdings
and
weightings
are
as
of
December
31,
2023.
1
For
a
complete
description
of
the
Fund’s
performance
benchmarks
please
refer
to
page
2
of
this
report.
2
AZL®
MVP
Global
Balanced
Index
Strategy
Fund
Review
(Unaudited)
Fund
Objective
The
Fund
seeks
long-term
capital
appreciation
with
preservation
of
capital
as
an
important
consideration.
This
objective
may
be
changed
by
the
Trustees
of
the
Fund
without
shareholder
approval.
The
Fund
seeks
to
achieve
its
objective
by
investing
primarily
in
a
combination
of
Underlying
Funds,
which
are
managed
by
the
manager,
combined
with
the
MVP
risk
management
process.
Investment
Concerns
The
Fund
invests
in
underlying
funds,
so
its
investment
performance
is
directly
related
to
the
performance
of
those
underlying
funds.
Before
investing,
investors
should
assess
the
risks
associated
with
and
types
of
investments
made
by
each
of
the
underlying
funds
in
which
the
Fund
invests.
Quantitative
investing
involves
risk
that
the
values
of
securities
selected
in
the
quantitative
analysis
can
react
differently
than
the
market
or
securities
selected
using
fundamental
analysis.
Stocks
are
more
volatile
and
carry
more
risk
and
return
potential
than
other
forms
of
investments.
International
investing
may
involve
risk
of
capital
loss
from
unfavorable
fluctuations
in
currency
values,
from
differences
in
generally
accepted
accounting
principles
or
from
economic
or
political
instability
in
other
nations.
Small-
to
mid-capitalization
companies
typically
have
a
higher
risk
of
failure
and
historically
have
experienced
a
greater
degree
of
volatility.
The
performance
of
the
underlying
funds
is
expected
to
be
lower
than
that
of
the
Indexes
because
of
fees
and
expenses.
Securities
in
which
the
underlying
funds
will
invest
may
involve
substantial
risk
and
may
be
subject
to
sudden
severe
price
declines.
Investing
in
a
single
industry
or
sector,
or
concentrating
investments
in
a
limited
number
of
industries
or
sectors,
tends
to
increase
the
risk
that
economic,
political,
or
regulatory
developments
affecting
certain
industries
or
sectors
will
have
a
large
impact
on
the
value
of
the
portfolio.
Mortgage-backed
investments
involve
risk
of
loss
due
to
prepayments
and,
like
any
bond,
due
to
default.
Because
of
the
sensitivity
of
mortgage-
related
securities
to
changes
in
interest
rates,
an
underlying
fund’s
performance
may
be
more
volatile
than
if
it
did
not
hold
these
securities.
Investing
in
derivative
instruments
involves
risks
that
may
be
different
from
or
greater
than
the
risk
associated
with
investing
directly
in
securities
or
other
traditional
instruments.
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
For
a
complete
description
of
these
and
other
risks
associated
with
investing
in
the
Fund,
please
refer
to
the
Fund’s
prospectus.
Growth
of
$10,000
Investment
The
chart
above
represents
a
comparison
of
a
hypothetical
investment
in
the
Fund
versus
a
similar
investment
in
the
Fund’s
benchmarks
and
represents
the
reinvestment
of
dividends
and
capital
gains
in
the
Fund.
Past
performance
does
not
guarantee
future
results.
The
performance
data
quoted
represents
past
performance
and
current
returns
may
be
lower
or
higher.
The
investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
the
original
cost.
To
obtain
performance
information
current
to
the
most
recent
month
end,
please
visit
www.Allianzlife.com.
The
above
expense
ratio
is
based
on
the
current
Fund
prospectus
dated
May
1,
2023.
The
Manager
and
the
Fund
have
entered
into
a
written
agreement
limiting
operating
expenses,
excluding
certain
expenses
(such
as
interest
expense
and
acquired
fund
fees
and
expenses),
to
0.15%
through
April
30,
2025.
Additional
information
pertaining
to
the
December
31,
2023
expense
ratio
can
be
found
in
the
Financial
Highlights.
Acquired
fund
fees
and
expenses
are
incurred
indirectly
by
the
Fund
through
the
valuation
of
the
Fund’s
investments
in
the
permitted
Underlying
Funds.
Accordingly,
acquired
fund
fees
and
expenses
affect
the
Fund’s
total
returns.
Because
these
fees
and
expenses
are
not
included
in
the
Fund’s
financial
highlights,
the
Fund’s
total
annual
fund
operating
expenses,
as
shown
in
the
current
prospectus,
do
not
correlate
to
the
ratios
of
expenses
to
average
net
assets
shown
in
the
Financial
Highlights.
Without
acquired
fund
fees
and
expenses
the
Fund’s
gross
expense
ratio
would
be
0.13%.
The
total
return
of
the
Fund
does
not
reflect
the
effect
of
any
insurance
charges,
the
annual
maintenance
fee
or
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Such
charges,
fees
and
tax
payments
would
reduce
the
performance
quoted.
The
Fund’s
performance
is
measured
against
the
Morgan
Stanley
Capital
International
World
Index
(“MSCI
World
Index”),
the
Bloomberg
U.S.
Aggregate
Bond
Index,
and
the
Global
Balanced
Composite
Index
(“Composite“).
The
MSCI
World
Index
is
a
broad
global
equity
benchmark
that
represents
large-
and
mid-cap
equity
performance
across
23
developed
markets
countries.
The
Bloomberg
U.S.
Aggregate
Bond
Index
is
a
market
value-weighted
performance
benchmark
for
investment-grade
fixed-rate
debt
issues,
including
government,
corporate,
asset-backed,
and
mortgage-
backed
securities,
with
maturities
of
at
least
one
year.
The
Composite
is
a
blended
index
comprised
of
(50%)
MSCI
World
Index
and
(50%)
Bloomberg
U.S.
Aggregate
Bond
Index.
The
Indexes
are
unmanaged
and
do
not
reflect
the
deduction
of
fees
associated
with
a
mutual
fund,
such
as
investment
management
and
fund
accounting
fees.
The
Index
noted
as
“gross
of
withholding
taxes”
reflects
the
maximum
possible
reinvestment
of
dividends
with
no
adjustment
for
withholding
tax
deductions
or
tax
credits.
The
Index
noted
as
“net
of
withholding
taxes”
reflects
the
reinvestment
of
dividends
after
the
deduction
of
withholding
taxes,
using
(for
international
indexes)
a
tax
rate
applicable
to
non-resident
institutional
investors
who
do
not
benefit
from
double
taxation
treaties.
Investors
cannot
invest
directly
in
an
index.
Average
Annual
Total
Returns
as
of
December
31,
2023
1
Year
3
Years
5
Years
10
Years
AZL
®
MVP
Global
Balanced
Index
Strategy
Fund
13.85%
1.06%
5.27%
3.50%
Bloomberg
U.S.
Aggregate
Bond
Index
5.53%
(3.31)%
1.10%
1.81%
Global
Balanced
Composite
Index
14.72%
2.29%
7.54%
5.74%
MSCI
World
Index
(gross
of
withholding
taxes)
24.42%
7.79%
13.37%
9.18%
MSCI
World
Index
(net
of
withholding
taxes)
23.79%
7.27%
12.80%
8.60%
Expense
Ratio
Gross
AZL
®
MVP
Global
Balanced
Index
Strategy
Fund
0.74%
AZL
MVP
Global
Balanced
Index
Strategy
Fund
3
Expense
Examples
(Unaudited)
As
a
shareholder
of
the
AZL
MVP
Global
Balanced
Index
Strategy
Fund
(the
“Fund”),
you
incur
ongoing
costs,
including
management
fees,
distribution
fees,
and
other
Fund
expenses.
These
examples
are
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
Please
note
that
the
expenses
shown
in
each
table
do
not
reflect
expenses
that
apply
to
the
subaccount
or
the
insurance
contract.
If
the
expenses
that
apply
to
the
subaccount
or
the
insurance
contract
were
included,
your
costs
would
have
been
higher.
These
examples
are
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
periods
presented
below.
The
Actual
Expense
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
below,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
table
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
this
period.
The
Hypothetical
Expense
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
Global
Balanced
Index
Strategy
Fund
$1,000.00
$1,051.60
$0.67
0.13%
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
Global
Balanced
Index
Strategy
Fund
$1,000.00
$1,024.55
$0.66
0.13%
*
Expenses
are
equal
to
the
average
account
value
multiplied
by
the
Fund's
annualized
expense
ratio
multiplied
by
184/365
(the
number
of
days
in
the
most
recent
fiscal
half-year
divided
by
the
number
of
days
in
the
fiscal
year).
Portfolio
Composition
(Unaudited)
Investments
Percent
of
Net
Assets
International
Equity
Fund
47.5
%
Fixed
Income
Fund
47.4
Private
Placements
0.1
%
Common
Stocks
—
†
Corporate
Bonds
—
†
Convertible
Bond
—
†
Total
Investment
Securities
95.0
Net
other
assets
(liabilities)
5.0
Net
Assets
100.0%
Portfolio
Composition
(Unaudited)
Investments
Percent
of
Net
Assets
United
States
95.0
%
Australia
—
†
India
—
†
Total
Investment
Securities
95.0
Net
other
assets
(liabilities)
5.0
Net
Assets
100.0%
†
Represents
less
than
0.05%.
AZL
MVP
Global
Balanced
Index
Strategy
Fund
Schedule
of
Portfolio
Investments
December
31,
2023
4
See
accompanying
notes
to
the
financial
statements.
Percentages
indicated
are
based
on
net
assets
as
of
December
31,
2023
.
Shares
Value
Common
Stocks
(0.0%
†
):
Health
Care
Providers
&
Services
(0.0%
†
):
145,123
Grand
Rounds,
Inc.,
Series
C(a)(b)
$
148,025
Paper
&
Forest
Products
(0.0%
†
):
386,370
Quintis
Pty,
Ltd.(a)(b)
3
Total
Common
Stocks
(Cost
$653,277)
148,028
Private
Placements
(0.1%):
Household
Durables
(0.0%
†
):
23,389
Jawbone,
0.00%(a)(b)
—
Software
(0.1%):
5,547
Lookout,
Inc.,
0.00%(a)(b)
12,925
63,925
Lookout,
Inc.,
Series
F,
Preferred
Shares,
0.00%(a)
(b)
285,744
298,669
Total
Private
Placements
(Cost
$485,378)
298,669
Principal
Amount
Convertible
Bond
(0.0%
†
):
Food
Products
(0.0%
†
):
$
400,000
REI
Agro,
Ltd.,
Registered
Shares,
5.50%,
11/13/14(a)(b)(c)
—
Total
Convertible
Bond
(Cost
$—)
—
Principal
Amount
Value
Corporate
Bonds
(0.0%
†
):
Paper
&
Forest
Products
(0.0%
†
):
$
52,331
Quintis
Australia
Pty,
Ltd.,
7.50%,
10/1/26,
Callable
2/5/24
@
101.88(a)(b)
$
32,058
730,672
Quintis
Australia
Pty,
Ltd.,
0.00%,
10/1/28,
Callable
2/5/24
@
100(a)(b)
—
Total
Corporate
Bonds
(Cost
$783,003)
32,058
Shares
Affiliated
Investment
Companies
(94.9%):
Fixed
Income
Fund
(47.4%):
24,448,592
AZL
Enhanced
Bond
Index
Fund
240,085,173
International
Equity
Fund
(47.5%):
15,829,809
AZL
MSCI
Global
Equity
Index
Fund,
Class
2
240,613,096
Total
Affiliated
Investment
Companies
(Cost
$444,136,812)
480,698,269
Total
Investment
Securities
(Cost
$446,058,470)
—
95.0%(d)
481,177,024
Net
other
assets
(liabilities)
—
5.0%
25,249,566
Net
Assets
—
100.0%
$
506,426,590
†
Represents
less
than
0.05%.
(a)
Rule
144A,
Section
4(2)
or
other
security
which
is
restricted
to
resale
to
institutional
investors.
(b)
Security
was
valued
using
significant
unobservable
inputs
as
of
December
31,
2023.
(c)
Defaulted
bond.
(d)
See
Federal
Tax
Information
listed
in
the
Notes
to
the
Financial
Statements.
Amounts
shown
as
“—“
are
either
$0
or
round
to
less
than
$1.
Futures
Contracts
At
December
31,
2023,
the
Fund's
open
futures
contracts
were
as
follows:
Long
Futures
Description
Expiration
Date
Number
of
Contracts
Notional
Amount
Value
and
Unrealized
Appreciation/
(Depreciation)
S&P
500
Index
E-Mini
March
Futures
(U.S.
Dollar)
3/15/24
52
$
12,532,000
$
413,737
U.S.
Treasury
10-Year
Note
March
Futures
(U.S.
Dollar)
3/19/24
112
12,643,750
389,899
$
803,636
AZL
MVP
Global
Balanced
Index
Strategy
Fund
5
See
accompanying
notes
to
the
financial
statements.
Statement
of
Assets
and
Liabilities
December
31,
2023
Statement
of
Operations
For
the
Year
Ended
December
31,
2023
Assets:
Investments
in
non-affiliates,
at
cost
$
1,921,658
Investments
in
affiliates,
at
cost
444,136,812
Investments
in
non-affiliates,
at
value
$
478,755
Investments
in
affiliates,
at
value
480,698,269
Deposit
at
broker
for
futures
contracts
collateral
25,275,764
Interest
and
dividends
receivable
90,110
Receivable
for
investments
sold
228,949
Reclaims
receivable
35,161
Prepaid
expenses
2,294
Total
Assets
506,809,302
Liabilities:
Cash
overdraft
228,949
Payable
for
capital
shares
redeemed
86,329
Management
fees
payable
42,516
Administration
fees
payable
7,909
Custodian
fees
payable
3,340
Administrative
and
compliance
services
fees
payable
657
Transfer
agent
fees
payable
778
Trustee
fees
payable
2,725
Other
accrued
liabilities
9,509
Total
Liabilities
382,712
Commitments
and
contingent
liabilities^
Net
Assets
$
506,426,590
Net
Assets
Consist
of:
Paid
in
capital
$
507,371,042
Total
distributable
earnings
(944,452)
Net
Assets
$
506,426,590
Shares
of
beneficial
interest
(unlimited
number
of
shares
authorized,
no
par
value)
49,200,119
Net
Asset
Value
(offering
and
redemption
price
per
share)
$
10.29
^
See
Note
3
in
Notes
to
the
Financial
Statements.
Investment
Income:
Dividends
from
affiliates
$
6,996,273
Interest
1,069,319
Dividends
from
non-affiliates
19,011
Foreign
withholding
tax
(18,961)
Total
Investment
Income
8,065,642
Expenses:
Management
fees
511,146
Administration
fees
75,424
Custodian
fees
18,569
Administrative
and
compliance
services
fees
6,718
Transfer
agent
fees
7,168
Trustee
fees
27,572
Professional
fees
26,431
Shareholder
reports
7,722
Other
expenses
10,138
Total
expenses
690,888
Net
Investment
Income/(Loss)
7,374,754
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments:
Net
realized
gains/(losses)
on
securities
and
foreign
currencies
71,926
Net
realized
gains/(losses)
on
affiliated
underlying
funds
592,829
Net
realized
gains
distributions
from
affiliated
underlying
funds
344,991
Net
realized
gains/(losses)
on
futures
contracts
652,866
Change
in
net
unrealized
appreciation/depreciation
on
securities
and
foreign
currencies
(211,335)
Change
in
net
unrealized
appreciation/depreciation
on
affiliated
underlying
funds
56,359,328
Change
in
net
unrealized
appreciation/depreciation
on
futures
contracts
917,557
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments
58,728,162
Change
in
Net
Assets
Resulting
From
Operations
$
66,102,916
AZL
MVP
Global
Balanced
Index
Strategy
Fund
6
See
accompanying
notes
to
the
financial
statements.
Statements
of
Changes
in
Net
Assets
For
the
Year
Ended
December
31,
2023
For
the
Year
Ended
December
31,
2022
Change
In
Net
Assets:
Operations:
Net
investment
income/(loss)
$
7,374,754
$
6,772,321
Net
realized
gains/(losses)
on
investments
1,662,612
10,654,479
Change
in
unrealized
appreciation/depreciation
on
investments
57,065,550
(
125,554,284
)
Change
in
net
assets
resulting
from
operations
66,102,916
(
108,127,484
)
Distributions
to
Shareholders:
Distributions
(
20,387,500
)
(
44,561,908
)
Change
in
net
assets
resulting
from
distributions
to
shareholders
(
20,387,500
)
(
44,561,908
)
Capital
Transactions:
Proceeds
from
shares
issued
512,058
1,117,253
Proceeds
from
dividends
reinvested
20,387,500
44,561,908
Value
of
shares
redeemed
(
78,067,295
)
(
66,319,575
)
Change
in
net
assets
resulting
from
capital
transactions
(
57,167,737
)
(
20,640,414
)
Change
in
net
assets
(
11,452,321
)
(
173,329,806
)
Net
Assets:
Beginning
of
period
517,878,911
691,208,717
End
of
period
$
506,426,590
$
517,878,911
Share
Transactions:
Shares
issued
51,282
103,568
Dividends
reinvested
2,185,155
4,838,426
Shares
redeemed
(
7,886,963
)
(
6,242,472
)
Change
in
shares
(
5,650,526
)
(
1,300,478
)
AZL
MVP
Global
Balanced
Index
Strategy
Fund
Financial
Highlights
(Selected
data
for
a
share
of
beneficial
interest
outstanding
throughout
the
periods
indicated.
Does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.)
7
See
accompanying
notes
to
the
financial
statements.
Year
Ended
December
31,
2023
Year
Ended
December
31,
2022
Year
Ended
December
31,
2021
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019†
Net
Asset
Value,
Beginning
of
Period
$9.44
$12.31
$12.31
$12.99
$11.62
Investment
Activities:
Net
Investment
Income/(Loss)(a)
0.14
0.12
0.08
0.19
0.18
Net
Realized
and
Unrealized
Gains/(Losses)
on
Investments
1.12
(2.12
)
0.89
0.73
1.68
Total
from
Investment
Activities
1.26
(2.00
)
0.97
0.92
1.86
Distributions
to
Shareholders
From:
Net
Investment
Income
(0.41
)
(0.32
)
(0.20
)
(1.22
)
(0.23
)
Net
Realized
Gains
—
(0.55
)
(0.77
)
(0.38
)
(0.26
)
Total
Dividends
(0.41
)
(0.87
)
(0.97
)
(1.60
)
(0.49
)
Net
Asset
Value,
End
of
Period
$10.29
$9.44
$12.31
$12.31
$12.99
Total
Return
(b)
13.85
%
(16.09
)%
8.05
%
7.81
%
16.20
%
Ratios
to
Average
Net
Assets/Supplemental
Data:
Net
Assets,
End
of
Period
(000's)
$506,427
$517,879
$691,209
$716,925
$763,705
Net
Investment
Income/(Loss)
1.44
%
1.18
%
0.61
%
1.49
%
1.40
%
Expenses
Before
Reductions*(c)
0.14
%
0.13
%
0.13
%
0.13
%
0.66
%
Expenses
Net
of
Reductions*
0.14
%
0.13
%
0.13
%
0.13
%
0.66
%
Portfolio
Turnover
Rate
6
%
5
%
5
%
9
%
103
%(d)
*
The
expense
ratios
exclude
the
impact
of
fees/expenses
paid
by
each
underlying
fund.
†
The
amounts
shown,
where
applicable,
are
consolidated
through
December
6,
2019.
(Prior
to
December
6,
2019,
the
Fund
primarily
invested
in
shares
of
a
wholly-owned
and
controlled
subsidiary
of
the
Fund.)
(a)
Calculated
using
the
average
shares
method.
(b)
The
returns
include
reinvested
dividends
and
fund
level
expenses,
but
exclude
insurance
contract
charges. If
these
charges
were
included,
the
returns
would
have
been
lower.
(c)
Excludes
fee
reductions. If
such
fee
reductions
had
not
occurred,
the
ratios
would
have
been
as
indicated.
(d)
Portfolio
turnover
increased
significantly
during
the
year
due
to
a
change
in
investment
strategy
of
the
Fund.
AZL
MVP
Global
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
8
1.
Organization
The
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”)
was
organized
as
a
Delaware
statutory
trust
on
June
16,
2004.
The
Trust
is
an
open-end
management
investment
company
registered
under
the
Investment
Company
Act
of
1940,
as
amended,
(the
“1940
Act”)
and
thus
is
determined
to
be
an
investment
company,
and
follows
the
investment
company
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946
“Financial
Services—Investment
Companies”.
The
Trust
consists
of 9
separate
investment
portfolios
(collectively,
the
“Funds”),
of
which
one
is
included
in
this
report,
the
AZL
MVP
Global
Balanced
Index
Strategy
Fund (the
“Fund”),
and 8
are
presented
in
separate
reports.
The
Fund
is
a
diversified
series
of
the
Trust.
The
Fund
is
a
“fund
of
funds”,
which
means
that
the
Fund
invests
primarily
in
other
mutual
funds
(the
"Underlying
Funds").
Underlying
Funds
invest
in
stocks,
bonds,
and
other
securities
and
reflect
varying
amounts
of
potential
investment
risk
and
reward.
The
Underlying
Funds
record
their
investments
at
fair
value.
Periodically,
the
Fund
will
adjust
its
asset
allocation
as
it
seeks
to
achieve
its
investment
objective.
The
Trust
is
authorized
to
issue
an
unlimited
number
of
shares
of
the
Fund
without
par
value.
Shares
of
the
Fund
are
available
through
the
variable
annuity
contracts
offered
through
the
separate
accounts
of
participating
insurance
companies.
Currently,
the
Fund
only
offers
its
shares
to
separate
accounts
of
Allianz
Life
Insurance
Company
of
North
America
and
Allianz
Life
Insurance
Company
of
New
York,
affiliates
of
the
Trust
and
the
Manager,
as
defined
below.
Under
the
Trust’s
organizational
documents,
its
officers
and
trustees
are
indemnified
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
In
addition,
in
the
normal
course
of
business,
the
Fund
may
enter
into
contracts
with
its
vendors
and
others
that
provide
for
general
indemnifications.
The
Fund’s
maximum
exposure
under
these
arrangements
is
unknown,
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund.
However,
based
on
experience,
the
Fund
expects
that
risk
of
loss
to
be
remote.
2.
Significant
Accounting
Policies
The
following
is
a
summary
of
significant
accounting
policies
followed
by
the
Fund
in
the
preparation
of
its
financial
statements.
The
policies
conform
with
U.S.
generally
accepted
accounting
principles
(“U.S.
GAAP”).
The
preparation
of
financial
statements
requires
management
to
make
certain
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
and
disclosure
of
contingent
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
Security
Valuation
The
Fund
records
its
investments
at
fair
value.
Fair
value
is
defined
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
willing
market
participants
at
the
measurement
date.
The
valuation
techniques
used
to
determine
fair
value
are
further
described
in
Note
4
below.
Investment
Transactions
and
Investment
Income
Investment
transactions
are
accounted
for
on
trade
date.
Net
realized
gains
and
losses
on
investments
sold
and
on
foreign
currency
transactions
are
recorded
on
the
basis
of
identified
cost.
Interest
income
is
recorded
on
the
accrual
basis
and
includes,
where
applicable,
the
amortization
of
premiums
or
accretion
of
discounts.
Dividend
income
is
recorded
on
the
ex-
dividend
date
except
in
the
case
of
foreign
securities,
in
which
case
dividends
are
recorded
as
soon
as
such
information
becomes
available.
Foreign
Currency
Translation
and
Withholding
Taxes
The
accounting
records
of
the
Fund
are
maintained
in
U.S.
dollars.
Foreign
currency
amounts
are
translated
into
U.S.
dollars
at
the
current
rate
of
exchange
to
determine
the
fair
value
of
investments,
assets
and
liabilities.
Purchases
and
sales
of
securities,
and
income
and
expenses
are
translated
at
the
prevailing
rate
of
exchange
on
the
respective
dates
of
such
transactions.
The
Fund
does
not
isolate
that
portion
of
the
results
of
operations
resulting
from
changes
in
foreign
exchange
rates
on
investments
from
fluctuations
arising
from
changes
in
market
prices
of
securities
held.
Such
fluctuations
are
included
in
the
net
realized
and
unrealized
gain
or
loss
on
investments
and
foreign
currencies.
Income
received
by
the
Fund
from
sources
within
foreign
countries
may
be
subject
to
withholding
and
other
income
or
similar
taxes
imposed
by
such
countries.
The
Fund
accrues
such
taxes,
as
applicable,
based
on
its
current
interpretation
of
tax
rules
in
the
foreign
markets
in
which
it
invests.
Distributions
to
Shareholders
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
The
Fund
distributes
its
dividends
from
net
investment
income
and
net
realized
capital
gains,
if
any,
on
an
annual
basis.
The
amount
of
distributions
from
net
investment
income
and
from
net
realized
gains
is
determined
in
accordance
with
federal
income
tax
regulations,
which
may
differ
from
U.S.
GAAP.
These
“book/tax”
differences
are
either
temporary
or
permanent
in
nature.
To
the
extent
these
differences
are
permanent
in
nature
(e.g.,
return
of
capital,
net
operating
loss,
reclassification
of
certain
market
discounts,
gain/loss,
paydowns,
and
distributions),
such
amounts
are
reclassified
within
the
composition
of
net
assets
based
on
their
federal
tax-basis
treatment;
temporary
differences
(e.g.,
wash
sales
and
differing
treatment
on
certain
investments)
do
not
require
reclassification.
Distributions
to
shareholders
that
exceed
net
investment
income
and
net
realized
gains
for
tax
purposes
are
reported
as
distributions
of
capital.
Expense
Allocation
Expenses
directly
attributable
to
the
Fund
are
charged
directly
to
the
Fund,
while
expenses
attributable
to
more
than
one
Fund
are
allocated
among
the
respective
Funds
based
upon
relative
net
assets
or
some
other
reasonable
method.
Expenses
which
are
attributable
to
more
than
one
Trust
are
allocated
across
the
Allianz
Variable
Insurance
Products
Trust,
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
AIM
ETF
Products
Trust
based
upon
relative
net
assets
or
another
reasonable
basis.
Allianz
Investment
Management
LLC
(the
“Manager”),
serves
as
the
investment
manager
for
the
Trust,
Allianz
Variable
Insurance
Products
Trust
and
AIM
ETF
Products
Trust.
This
report
does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.
AZL
MVP
Global
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
9
Affiliated
Securities
Transactions
Pursuant
to
Rule
17a-7
under
the
1940
Act,
the
Fund
may
engage
in
securities
transactions
with
affiliated
investment
companies
and
advisory
accounts
managed
by
the
Manager.
Any
such
purchase
or
sale
transaction
must
be
effected
without
a
brokerage
commission
or
other
remuneration,
except
for
customary
transfer
fees.
The
transaction
must
be
effected
at
the
current
market
price,
which
is
either
the
security’s
last
sale
price
on
an
exchange
or,
if
there
are
no
transactions
in
the
security
that
day,
at
the
average
of
the
highest
bid
and
lowest
asked
price.
During
the
year
ended
December
31,
2023,
the
Fund
did
not
engage
in
any
Rule
17a-7
transactions.
Derivative
Instruments
All
open
derivative
positions
at
period
end
are
reflected
on
the
Fund’s
Schedule
of
Portfolio
Investments.
The
following
is
a
description
of
the
derivative
instruments
utilized
by
the
Fund,
including
the
primary
underlying
risk
exposures
related
to
each
instrument
type.
The
Fund’s
allocation
to
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process
may
include
(a)
derivatives
such
as
index
futures,
other
futures
contracts,
options,
and
other
similar
securities
and
(b)
cash,
money
market
equivalents,
short-term
debt
instruments,
money
market
funds,
and
short-term
debt
funds
to
satisfy
all
applicable
margin
requirements
and
to
provide
additional
portfolio
liquidity
to
satisfy
large
redemptions
and
any
margin
calls.
Due
to
the
leverage
provided
by
derivatives,
the
notional
value
of
the
Fund’s
derivative
positions
could
exceed
20%
of
the
Fund’s
value.
The
Fund
may
also
use
futures
to
gain
equity
exposure
and
may
hold
cash
as
a
buffer
in
the
event
of
market
shocks.
Futures
Contracts
During
the
year
ended
December
31,
2023,
the
Fund
invested
in
futures
contracts
to
reduce
volatility
and
limit
the
need
to
decrease
or
increase
allocations
to
underlying
funds.
Futures
contracts
are
valued
based
upon
their
quoted
daily
settlement
prices.
Upon
entering
into
a
futures
contract,
the
Fund
is
required
to
segregate
liquid
assets
in
accordance
with
the
initial
margin
requirements
of
the
broker
or
exchange.
Futures
contracts
are
marked
to
market
daily
and
a
payable
or
receivable
for
the
change
in
value
(“variation
margin”),
if
any,
is
recorded
by
the
Fund.
Gains
or
losses
are
recognized
but
not
considered
realized
until
the
contracts
expire
or
are
closed.
Futures
contracts
involve,
to
varying
degrees,
elements
of
market
risk
(generally
equity
price
risk
related
to
stock
futures,
interest
rate
risk
related
to
bond
futures,
and
foreign
currency
risk
related
to
currency
futures)
and
exposure
to
loss
in
excess
of
the
variation
margin
disclosed
in
the
Statement
of
Assets
and
Liabilities.
The
primary
risks
associated
with
the
use
of
futures
contracts
are
the
imperfect
correlation
between
the
change
in
value
of
the
underlying
securities
and
the
prices
of
futures
contracts,
the
possibility
of
an
illiquid
market,
and
the
inability
of
the
counterparty
to
meet
the
terms
of
the
contract.
For
the
year
ended
December
31,
2023,
the
monthly
average
notional
amount
for
long
contracts
was
$24.3
million.
There
was
no
short
contract
activity
during
the
period.
Realized
gains
and
losses
are
reported
as
“Net
realized
gains/(losses)
on
futures
contracts”
on
the
Statement
of
Operations.
Summary
of
Derivative
Instruments
The
following
is
a
summary
of
the
values
of
derivative
instruments
on
the
Fund’s
Statement
of
Assets
and
Liabilities,
categorized
by
risk
exposure,
as
of
December
31,
2023:
The
following
is
a
summary
of
the
effect
of
derivative
instruments
on
the
Statement
of
Operations,
categorized
by
risk
exposure,
for
the
year
ended
December
31,
2023:
3.
Fees
and
Transactions
with
Affiliates
and
Other
Parties
The
Manager
provides
investment
advisory
and
management
services
for
the
Fund.
The
Manager
has
contractually
agreed
to
waive
fees
and
reimburse
the
Fund
to
limit
the
annual
expenses,
excluding
interest
expense
(e.g.,
cash
overdraft
fees),
taxes,
brokerage
commissions,
acquired
fund
fees
and
expenses,
other
expenditures
that
are
capitalized
in
accordance
with
U.S.
GAAP
and
other
extraordinary
expenses
not
incurred
in
the
ordinary
course
of
the
Fund’s
business,
based
on
the
daily
net
assets
of
the
Fund,
through
April
30,
2025.
Expenses
incurred
for
investment
advisory
and
management
services
are
reflected
on
the
Statement
of
Operations
as
“Management
fees.”
For
the
year
ended
December
31,
2023,
the
annual
rate
due
to
the
Manager
and
the
annual
expense
limit
were
as
follows:
Asset
Derivatives
Liability
Derivatives
Primary
Risk
Exposure
Statement
of
Assets
and
Liabilities
Location
Total
Value
Statement
of
Assets
and
Liabilities
Location
Total
Value
Equity
Risk
413,737
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$413,737
Payable
for
variation
margin
on
futures
contracts*
$—
Interest
Rate
Risk
–
389,899
–
–
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$389,899
Payable
for
variation
margin
on
futures
contracts*
$
—
*
For
futures
contracts,
the
amounts
represent
the
cumulative
appreciation/depreciation
of
these
futures
contracts
as
reported
in
the
Schedule
of
Portfolio
Investments.
Only
the
current
day's
variation
margin,
if
any,
is
reported
within
the
Statement
of
Assets
and
Liabilities
as
Variation
margin
on
futures
contracts.
Primary
Risk
Exposure
Location
of
Gains/(Losses)
on
Derivatives
Recognized
Realized
Gains/(Losses)
on
Derivatives
Recognized
Change
in
Net
Unrealized
Appreciation/Depreciation
on
Derivatives
Recognized
Equity
Risk
(1,339,318)
(412,917)
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$
1,339,318
$
412,917
Interest
Rate
Risk
686,452
(504,640)
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$(686,452)
$504,640
Annual
Rate
Annual
Expense
Limit
AZL
MVP
Global
Balanced
Index
Strategy
Fund
0.10%
0.15%
AZL
MVP
Global
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
10
Any
amounts
contractually
waived
or remitted
to
the
Fund by
the
Manager
with
respect
to
the
annual
expense
limit
in
a
particular
fiscal
year
may
be
reimbursed
by
the
Fund
to
the
Manager,
provided
that
such
reimbursement
will
not
cause
the
Fund
to
exceed
the
lesser
of
any
applicable
expense
limit
in
effect
(i)
at
the
time
of
the
original
waiver
or
payment
and
(ii)
at
the
time
of
such
reimbursement,
as
supported
by
standard accounting
practices.
Such
reimbursement
only
applies
to
amounts
waived
or
paid
by
the
Manager
within
the
three
years
prior
to
the
date
of
such
reimbursement,
calculated
monthly
from
when
the
waiver
or
payment
was
recorded.
Any
amounts
recouped
by
the
Manager
during
the
period
are
reflected
on
the
Statement
of
Operations
as
“Recoupment
of
prior
expenses
reimbursed
by
the
Manager.”
At
December
31,
2023,
there
were
no
remaining
contractual
reimbursements
subject
to
repayment
by
the
Fund
in
subsequent
years,
and
no
commitment
or
contingent
liability
is
expected.
Management
fees,
which
the
Manager
may
waive
in
order
to
maintain
more
competitive
expense
ratios,
are
not
subject
to
repayment
in
subsequent
years.
Information
on
the
total
amount
waived/reimbursed
by
the
Manager
or
repaid
to
the
Manager
by
the
Fund
during
the
period
can
be
found
on
the
Statement
of
Operations,
as
applicable.
During
the
year
ended
December
31,
2023,
there
were
no
such
waivers.
The
Manager
serves
as
the
investment
adviser
of the
underlying
funds
in
which
the
Fund
invests.
At
December
31,
2023,
these
underlying
funds
are
noted
as
Affiliated
Investment
Companies
in
the
Fund’s
Schedule
of
Portfolio
Investments.
Additional
information,
including
financial
statements,
about
these
Funds
is
available
at
www.allianzlife.com.
The
Manager
is
paid
a
separate
fee
from
the
underlying
funds
for
such
services.
A
summary
of
the
Fund’s
investments
in
affiliated
investment
companies
for
the
year
ended
December
31,
2023
is
as
follows:
Pursuant
to
separate
agreements
between
the
Trust
and
the
Manager,
the
Manager
provides
a
Chief
Compliance
Officer
(“CCO”)
and
certain
compliance
oversight
and
regulatory
filing
services
to
the
Trust.
Under
these
agreements,
the
Manager
is
entitled
to
an
amount
equal
to
a
portion
of
the
compensation
and
certain
other
expenses
related
to
the
individuals
performing
the
CCO
and
compliance
oversight
services,
as
well
as
$100
per
hour
for
time
incurred
in
connection
with
the
preparation
and
filing
of
certain
documents
with
the
SEC.
The
fees
are
paid
to
the
Manager
on
a
quarterly
basis.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administrative
and
compliance
services
fees.”
Citi
Fund
Services
Ohio,
Inc.
(“Citi”
or
the
“Administrator”),
a
wholly
owned
subsidiary
of
Citigroup,
Inc.,
with
which
an
officer
of
the
Trust
is
affiliated,
serves
as
the
Trust’s
administrator
and
fund
accountant,
and
assists
the
Trust
in
all
aspects
of
its
administration
and
operation.
The
Administrator
is
entitled
to
a
fee,
accrued
daily
and
paid
monthly.
The
Administrator
is
entitled
to
an
annual
fee
for
each
additional
class
of
shares
of
any
Fund,
certain
annual
fees
in
supporting
fair
value
services,
and
a
Trust-wide
annual
fee
for
providing
infrastructure
and
support
in
implementing
the
written
policies
and
procedures
comprising
the
Fund’s
compliance
program.
The
Administrator
is
also
reimbursed
for
certain
expenses
incurred.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administration
fees.”
FIS
Investor
Services
LLC
(“FIS”)
serves
as
the
Fund's
transfer
agent.
Under
the
Transfer
Agent
Agreement,
the
Trust
pays
FIS
a
fee
for
its
services
and
reimburses
FIS
for
all
of
their
reasonable
out-of-pocket
expenses
incurred
in
providing
these
services.
The
Bank
of
New
York
Mellon
(“BNY
Mellon”
or
the
“Custodian”)
serves
as
the
Trust’s
custodian.
For
these
services
as
custodian,
the
Funds
pay
BNY
Mellon
a
fee
based
on
a
percentage
of
assets
held
on
behalf
of
the
Funds,
plus
certain
out-of-pocket
charges.
Allianz
Life
Financial
Services,
LLC
(“ALFS”),
an
affiliate
of
the
Manager,
serves
as
distributor
of
the
Fund.
ALFS
receives
an
annual
Trust-wide
annual
fee
of
$7,500,
paid
by
the
Manager
from
its
profits
and
not
by
the
Trust,
for
recordkeeping
and
reporting
services.
Certain
Officers
and
Trustees
of
the
Trust
are
affiliated
with
the
Manager
or
the
Administrator.
Such
Officers
(except
for
the
Trust’s
CCO
as
noted
above)
and
Trustees
receive
no
compensation
from
the
Trust
for
serving
in
their
respective
roles.
4.
Investment
Valuation
Summary
The
valuation
techniques
employed
by
the
Fund,
as
described
below,
maximize
the
use
of
observable
inputs
and
minimize
the
use
of
unobservable
inputs
in
determining
fair
value.
The
inputs
used
for
valuing
the
Fund’s
investments
are
summarized
in
the
three
broad
levels
listed
below:
•
Level
1
-
quoted
prices
in
active
markets
for
identical
assets
•
Level
2
-
other
significant
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayments
speeds,
credit
risk,
etc.)
•
Level
3
-
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
investments)
Changes
in
valuation
techniques
may
result
in
transfers
in
or
out
of
an
assigned
level
within
the
disclosure
hierarchy.
The
inputs
or
methodology
used
for
valuing
investments
is
not
necessarily
an
indication
of
the
risk
associated
with
investing
in
those
investments.
Value
12/31/22
Purchases
at
Cost
Proceeds
from
Sales
Net
Realized
Gains
(Losses)
Change
in
Net
Unrealized
Appreciation
(Depreciation)
Value
12/31/23
Shares
as
of
12/31/23
Dividend
Income
Net
Realized
Gains
Distributions
from
Affiliated
Underlying
Funds
AZL
Enhanced
Bond
Index
Fund
$
246,907,613
$
3,914,570
$
(19,242,320)
$
(3,461,880)
$
11,967,190
$
240,085,173
24,448,592
$
3,914,571
$
—
AZL
MSCI
Emerging
Markets
Equity
Index
Fund,
Class
2
25,965,885
—
(28,400,037)
(2,649,371)
5,083,523
—
—
—
—
AZL
MSCI
Global
Equity
Index
Fund,
Class
2
220,830,950
27,407,757
(53,638,306)
6,704,080
39,308,615
240,613,096
15,829,809
3,081,702
344,991
$
493,704,448
$
31,322,327
$
(
101
,
280
,
663
)
$
592
,
829
$
5
6
,
359
,
328
$
480,698,269
40,278,401
$
6,996,273
$
344,991
AZL
MVP
Global
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
11
Security
prices
are
determined
pursuant
to
valuation
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
“Board”
or
“Trustees”)
as
of
the
close
of
the
New
York
Stock
Exchange
(“NYSE”)
(generally
4:00
pm
Eastern
Time).
Equity
securities
are
valued
at
the
last
quoted
sale
price
or,
if
there
is
no
sale,
the
last
quoted
bid
price
is
used.
Securities
listed
on
NASDAQ
Stock
Market,
Inc.
(“NASDAQ”)
are
valued
at
the
official
closing
price
as
reported
by
NASDAQ.
In
each
of
these
situations,
valuations
are
typically
categorized
as
a
Level
1
in the
fair
value
hierarchy.
Investments
in
open-end
investment
companies
are
valued
at
their
respective
net
asset
value
as
reported
by
such
companies
and
are
typically
categorized
as
Level
1
in
the
fair
value
hierarchy.
Futures
contracts
are
valued
at
the
settlement
prices
established
each
day
on
the
primary
exchange
and
are
typically
categorized
as
Level
1
in
the
fair
value
hierarchy.
Debt
and
other
fixed
income
securities
are
generally
valued
at
an
evaluated
bid
price
provided
by
an
independent
pricing
source
in
accordance
with
valuation
procedures
approved
by
the
Board.
To
value
debt
securities,
pricing
services
may
use
various
pricing
techniques
which
take
into
account
appropriate
factors
such
as
market
activity,
yield,
quality,
coupon
rate,
maturity,
type
of
issue,
trading
characteristics,
call
features,
credit
ratings
and
other
data,
as
well
as
broker
quotes.
Short-term
securities
of
sufficient
credit
quality
with
sixty
days
or
less
remaining
until
maturity
may
be
valued
at
amortized
cost,
which
approximates
fair
value.
In
each
of
these
situations,
valuations
are
typically
categorized
as
Level
2
in
the
fair
value
hierarchy.
Other
assets
and
securities
for
which
market
quotations
have
become
unreliable
or
are
not
readily
available
as
defined
in
Rule
2a-5
under
the
1940
Act
are
valued
in
accordance
with
valuation
procedures
approved
by
the
Board.
Fair
value
pricing
may
be
used
for
significant
events
such
as
securities
whose
trading
has
been
suspended,
whose
price
has
become
stale
or
for
which
there
is
no
currently
available
price
at
the
close
of
the
NYSE.
Depending
on
the
source
and
relative
significance
of
valuation
inputs,
these
instruments
may
be
classified
as
Level
2
or
Level
3
in
the
fair
value
hierarchy.
The
Fund
utilizes
a
pricing
service
to
assist
in
determining
the
fair
value
of
securities
when
certain
significant
events
occur
that
may
affect
the
value
of
foreign
securities.
In
accordance
with
valuation
procedures
approved
by
the
Board,
fair
value
pricing
may
be
used
if
events
materially
affecting
the
value
of
foreign
securities
occur
between
the
time
when
the
exchange
on
which
they
are
traded
closes
and
the
time
when
the
Fund’s
net
asset
value
is
calculated.
Management
identifies
possible
fluctuations
in
international
securities
by
monitoring
the
increase
or
decrease
in
the
value
of
a
designated
benchmark
index.
In
the
event
of
an
increase
or
decrease
greater
than
predetermined
levels,
the
Fund
may
use
a
systematic
valuation
model
provided
by
an
independent
third
party
to
fair
value
its
international
equity
securities
which
are
then
typically
categorized
as
Level
2
in
the
fair
value
hierarchy.
The
Board
has
designated
the
Manager
to
perform
the
Fund’s
fair
value
determinations
in
accordance
with
valuation
procedures
approved
by
the
Board.
The
effect
of
using
fair
value
pricing
is
that
the
Fund’s
NAV
will
be
subject
to
the
judgment
of
the
Manager.
The
Manager’s
fair
valuation
process
is
subject
to
the
oversight
of
the
Board.
The
following
is
a
summary
of
the
valuation
inputs
used
as
of December
31,
2023
in
valuing
the
Fund’s
investments
based
upon
the
three
levels
defined
above:
5.
Security
Purchases
and
Sales
For
the
year
ended
December
31,
2023,
cost
of
purchases
and
proceeds
from
sales
of
securities
(excluding
securities
maturing
less
than
one
year
from
acquisition)
were
as
follows:
6.
Restricted
Securities
A
restricted
security
is
a
security
which
has
been
purchased
through
a
private
offering
and
cannot
be
resold
to
the
general
public
without
prior
registration
under
the
Securities
Act
of
1933
(the
“1933
Act”)
or
pursuant
to
the
resale
limitations
provided
by
Rule
144A
under
the
1933
Act,
or
an
exemption
from
the
registration
requirements
of
the
1933
Act.
Whether
a
restricted
security
is
illiquid
is
determined
pursuant
to
guidelines
established
by
the
Trustees.
Not
all
restricted
securities
are
considered
illiquid.
The
illiquid
restricted
securities
held
as
of
December
31,
2023
are
identified
below.
Investment
Securities:
Level
1
Level
2
Level
3
Total
Common
Stocks
+
$
—
$
—
$
148,028
$
148,028
Private
Placements
+
—
—
298,669
298,669
Convertible
Bond
+
—
—
—
#
—
Corporate
Bonds
+
—
—
32,058
32,058
Affiliated
Investment
Companies
480,698,269
—
—
480,698,269
Total
Investment
Securities
480,698,269
—
478,755
481,177,024
Other
Financial
Instruments:
*
Futures
Contracts
803,636
—
—
803,636
Total
Investments
$481,501,905
$—
$478,755
$481,980,660
+
For
detailed
industry
descriptions,
see
the
accompanying
Schedule
of
Portfolio
Investments.
#
Represents
the
interest
in
securities
that
were
determined
to
have
a
value
of
zero
at
December
31,
2023.
*
Other
Financial
Instruments
would
include
any
derivative
instruments,
such
as
futures
contracts. These
investments
are
generally
presented
in
the
Statement
of
Assets
and
Liabilities
at
variation
margin.
Purchases
Sales
AZL
MVP
Global
Balanced
Index
Strategy
Fund
$31,322,327
$101,280,663
AZL
MVP
Global
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
12
Security
Acquisition
Date
(a)
Acquisition
Cost
Shares
or
Principal
Amount
Value
Percentage
of
Net
Assets
Grand
Rounds,
Inc.
Series
C
3/31/15
$
399,608
145,123
$
148,025
0.02%
Jawbone
1/24/17
–
23,389
–
0.00%
Lookout,
Inc.,
Preferred
Shares,
Series
F
9/19/14
481,994
63,925
285,744
0.06%
Lookout,
Inc.
3/4/15
3,384
5,547
12,925
0.00%
Quintis
Australia
Pty,
Ltd.
7.50%
,
10/1/26
,
Callable
2/5/24
@
101.88
10/25/18
52,331
52,331
32,058
0.01%
Quintis
Australia
Pty,
Ltd.
10/1/28
,
Callable
2/5/24
@
100.00
10/25/18
730,672
730,672
–
0.00%
Quintis
Pty,
Ltd.
10/25/18
253,669
386,370
3
0.00%
REI
Agro,
Ltd.,
Registered
Shares
,
5.50%
,
11/13/14
2/7/12
–
400,000
–
0.00%
7.
Investment
Risks
The
risks
below
are
presented
in
an
order
intended
to
facilitate
readability.
Their
order
does
not
imply
that
the
realization
of
one
risk
is
more
likely
to
occur
more
frequently
than
another
risk,
nor
does
it
imply
that
the
realization
of
one
risk
is
likely
to
have
a
greater
adverse
impact
than
another
risk.
The
Fund
may
be
subject
to
other
risks
in
addition
to
these
identified
risks.
This
section
discusses
certain
common
principal
risks
encountered
by
the
Fund.
Derivatives
Risk:
The
Fund
may
invest
directly
or
through
affiliated
or
unaffiliated
mutual
funds
in
derivative
instruments
such
as
futures,
options,
and
options
on
futures.
A
derivative
is
a
financial
contract
whose
value
depends
on,
or
is
derived
from,
the
value
of
an
underlying
asset,
reference
rate,
or
risk.
Use
of
derivative
instruments
involves
risks
different
from,
or
possibly
greater
than,
the
risks
associated
with
investing
directly
in
securities
and
other
traditional
investments.
Derivatives
are
subject
to
a
number
of
other
risks,
such
as
liquidity
risk,
interest
rate
risk,
market
risk,
credit
risk,
and
selection
risk.
Derivatives
also
involve
the
risk
of
mispricing
or
improper
valuation
and
the
risk
that
changes
in
the
value
may
not
correlate
perfectly
with
the
underlying
asset,
rate,
or
index.
Using
derivatives
may
result
in
losses,
possibly
in
excess
of
the
principal
amount
invested.
Also,
suitable
derivative
transactions
may
not
be
available
in
all
circumstances.
The
other
party
to
a
derivatives
contract
could
default.
Foreign
Securities
Risk:
Investing
in
the
securities
of
non-U.S.
issuers
involves
a
number
of
risks,
such
as
fluctuations
in
currency
values,
adverse
political,
social
or
economic
developments,
and
differences
in
social
and
economic
developments
or
policies.
Such
risks
include
future
political
and
economic
developments,
and
the
possible
imposition
of
exchange
controls
or
other
foreign
governmental
laws
and
restrictions.
In
addition,
with
respect
to
certain
countries,
there
is
the
possibility
of
expropriation
of
assets,
confiscatory
taxation,
political
or
social
instability
or
diplomatic
developments
which
could
adversely
affect
investments
in
those
securities.
Certain
foreign
companies
may
be
subject
to
sanctions,
embargoes,
or
other
governmental
actions
that
may
impair
or
otherwise
limit
the
ability
to
invest
in,
receive,
hold
or
sell
the
securities
of
such
companies.
Fund
of
Fund
Risk:
The
Fund,
as
a
shareholder
of
the
underlying
funds,
indirectly
bears
its
proportionate
share
of
any
investment
management
fees
and
other
expenses
of
the
underlying
funds.
Further
due
to
the
fees
and
expenses
paid
by
the
Fund,
as
well
as
small
variations
in
the
Fund’s
actual
allocations
to
the
underlying
funds
and
any
futures
and
cash
held
in
the
Fund’s
portfolio,
the
performance
and
income
distributions
of
the
Fund
will
not
be
the
same
as
the
performance
and
income
distributions
of
the
underlying
funds.
In
addition,
the
Fund
maintains
indirect
exposure
to
various
types
of
risk
which
may
exist
in
the
underlying
Funds,
such
as
foreign
securities
risk,
fixed
income
securities
risk
and
other
risks.
Interest
Rate
Risk:
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
The
price
of
a
bond
is
also
affected
by
its
maturity.
Bonds
with
longer
maturities
generally
have
greater
sensitivity
to
changes
in
interest
rates.
Market
Risk
:
The
market
price
of
securities
owned
by
the
underlying
funds
may
go
up
or
down,
sometimes
rapidly
and
unpredictably.
Securities
may
decline
in
value
due
to
factors
affecting
securities
markets
generally
or
particular
industries
represented
in
the
securities
markets.
The
value
of
a
security
may
decline
due
to
general
market
conditions,
economic
trends
or
events that
are
not
specifically
related
to
a
particular
company,
such
as
real
or
perceived
adverse
economic
conditions,
inflation,
recessions, changes
in
the
general
outlook
for
corporate
earnings,
changes
in
interest
or
currency
rates,
or
adverse
investor
sentiment,
as
well
as
natural
disasters,
and
outbreaks
of
infectious
illnesses
or
other
widespread
public
health
issues.
Quantitative
Investing
Risk:
The
value
of
securities
selected
using
quantitative
analysis
can
react
differently
to
issuer,
political,
market,
and
economic
developments
than
the
market
as
a
whole
or
securities
selected
using
only
fundamental
analysis.
The
factors
used
in
quantitative
analysis
and
the
weight
placed
on
those
factors
may
not
be
predictive
of
a
security's
value.
In
addition,
factors
that
affect
a
security's
value
can
change
over
time
and
these
changes
may
not
be
reflected
in
the
quantitative
model.
A
quantitative
model
can
be
adversely
affected
by
errors
or
imperfections
in
the
factors
or
the
data
on
which
evaluations
are
based,
or
by
technical
issues
with
construction
or
implementation
of
the
model,
which
in
any
case
may
result
in
a
failure
of
the
portfolio
to
perform
as
expected
or
a
failure
to
identify
securities
that
will
perform
well
in
the
future.
8.
Federal
Tax
Information
It
is
the
policy
of
the
Fund
to
continue
to
qualify
as
a
regulated
investment
company
by
complying
with
the
provisions
available
to
certain
investment
companies,
as
defined
under
Subchapter
M
of
the
Internal
Revenue
Code,
and
to
make
distributions
of
net
investment
income
and
net
realized
gains
sufficient
to
relieve
it
from
all,
or
substantially
all,
federal
income
taxes.
Accordingly,
no
provisions
for
federal
income
taxes
are
required
in
the
financial
statements.
(a)
Acquisition
date
represents
the
initial
purchase
date
of
the
security.
AZL
MVP
Global
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
13
Management
of
the
Fund
has
reviewed
tax
positions
taken
in
tax
years
that
remain
subject
to
examination
by
all
major
tax
jurisdictions,
including
federal
(i.e.,
the
last
four
tax
year
ends
and
the
interim
tax
period
since
then,
as
applicable).
Management
believes
that
there
is
no
tax
liability
resulting
from
unrecognized
tax
benefits
related
to
uncertain
tax
positions
taken.
Cost
of
securities,
including
derivatives
and
short
positions
as
applicable,
for
federal
income
tax
purposes
at
December
31,
2023
was
$448,512,299.
The
gross
unrealized
appreciation/
(depreciation)
on
a
tax
basis
was
as
follows:
As
of
the
end
of
its
tax
year
ended
December
31,
2023,
the
Fund
had
capital
loss
carry
forwards
(“CLCFs”)
as
summarized
in
the
table
below.
The
Board
does
not
intend
to
authorize
a
distribution
of
any
realized
gain
for
the
Fund
until
any
applicable
CLCF
has
been
offset.
CLCFs
not
subject
to
expiration:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2023, was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2022, was
as
follows:
At
December
31,
2023,
the
components
of
accumulated
earnings
on
a
tax
basis
were
as
follows:
9.
Ownership
and
Principal
Holders
The
beneficial
ownership,
either
directly
or
indirectly,
of
more
than
25%
of
the
voting
securities
of
a
fund
creates
presumptions
of
control
of
the
fund,
under
section
2
(a)(9)
of
the
1940
Act.
As
of December
31,
2023,
the
Fund
had
an
individual
shareholder
account
which
is
affiliated
with
the
Manager
representing
ownership
in
excess
of
85%
of
the
Fund.
Investment
activities
of
this
shareholder
could
have
a
material
impact
to
the
Fund.
As
of
December
31,
2023,
the
Fund
had
a
controlling
interest
(in
excess
of
50%)
in
the
AZL
MSCI
Global
Equity
Index
Fund,
which
is
affiliated
with
the
Manager.
10.
Recent
Regulatory
Pronouncements
Effective
January
24,
2023,
the
SEC
adopted
rule
and
form
amendments
that
require
open-end
management
investment
companies
to
transmit
concise
and
visually
engaging
annual
and
semi-annual
reports
to
shareholders
that
highlight
key
information.
Other
information,
including
financial
statements,
will
no
longer
appear
in
a
tailored
shareholder
report
but
must
be
available
online,
delivered
free
of
charge
upon
request,
and
filed
on
a
semi-annual
basis
on
Form
N-CSR.
The
rule
and
form
amendments
have
a
compliance
date
of
July
24,
2024.
Accordingly,
the
rule
and
form
amendments
will
not
impact
the
Fund
until
the
2024
semi-annual
shareholder
report
and
will
have
no
effect
on
the
Fund’s
accounting
policies
or
financial
statements.
Unrealized
appreciation
$62,274,625
Unrealized
(depreciation)
(29,609,900)
Net
unrealized
appreciation/(depreciation)
$32,664,725
Short-Term
Amount
Long-Term
Amount
Total
AZL
MVP
Global
Balanced
Index
Strategy
Fund
$
—
$
15,607,753
$
15,607,753
During
the
year
ended
December
31,
2023,
the
Fund
utilized
$3,113,985
in
CLCFs
to
offset
capital
gains.
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
Global
Balanced
Index
Strategy
Fund
$20,387,500
$—
$20,387,500
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
Global
Balanced
Index
Strategy
Fund
$35,754,717
$8,807,191
$44,561,908
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Undistributed
Ordinary
Income
Undistributed
Long-Term
Capital
Gains
Accumulated
Capital
and
Other
Losses
Unrealized
Appreciation/
Depreciation(a)
Total
Accumulated
Earnings/
(Deficit)
AZL
MVP
Global
Balanced
Index
Strategy
Fund
$7,719,718
$—
$(15,607,753)
$32,664,276
$24,776,241
(a)
The
differences
between
book-basis
and
tax-basis
unrealized
appreciation/(depreciation)
are
attributable
primarily
to
tax
deferral
of
losses
on
wash
sales,
foreign
currency
gains
or
losses,
mark-to-
market
of
futures
contracts
and
straddles.
AZL
MVP
Global
Balanced
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
14
11.
Subsequent
Events
Management
of
the
Fund
has
evaluated
the
need
for
additional
disclosures
or
adjustments
resulting
from
events
through
the
date
the
financial
statements
were
issued.
Based
on
this
evaluation,
there
were
no
subsequent
events
to
report
that
would
have
material
impact
on
the
Fund’s
financial
statements.
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
15
To
the
Board
of
Trustees
of
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
Shareholders
of
AZL
MVP
Global
Balanced
Index
Strategy
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
schedule
of
portfolio
investments,
of
AZL
MVP
Global
Balanced
Index
Strategy
Fund
(one
of
the
funds
constituting
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust,
referred
to
hereafter
as
the
"Fund")
as
of
December
31,
2023,
the
related
statement
of
operations
for
the
year
ended
December
31,
2023,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2023,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2023
by
correspondence
with
the
custodian,
transfer
agent
and
brokers.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
/s/
PricewaterhouseCoopers
LLP
New
York,
New
York
February
22,
2024
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Allianz
Variable
Insurance
Products
complex
since
2018.
16
Other
Federal
Income
Tax
Information
(Unaudited)
For
the
year
ended
December
31,
2023,
52.45%
of
the
total
ordinary
income
dividends
paid
by
the
Fund
qualify
for
the
corporate
dividends
received
deductions
available
to
corporate
shareholders.
17
Other
Information
(Unaudited)
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities
is
available,
without
charge,
upon
request,
by
visiting
the
Securities
and
Exchange
Commission’s
(‘‘Commission’’)
website
at
www.sec.gov,
or
by
calling
800-624-0197.
Information
regarding
how
the
Fund
voted
proxies
relating
to
portfolio
securities
during
the
most
recent
12-month
period
ended
June
30th
is
available
(i)
without
charge,
upon
request,
by
calling
800-624-0197;
(ii)
on
the
Trust’s
website
at
https://www.allianzlife.com;
and
(iii)
on
the
Commission’s
website
at
http://www.sec.gov
.
The
Fund
files
complete
Schedules
of
Portfolio
Holdings
with
the
Commission
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Schedules
of
Portfolio
Holdings
for
the
Fund
are
available
without
charge
on
the
Commission’s
website
at
http://www.sec.gov,
or
may
be
obtained
by
calling
800-624-0197.
18
Approval
of
Investment
Advisory
Agreement
(Unaudited)
Subject
to
the
general
supervision
of
the
Board
of
Trustees
(the
“Board”)
and
in
accordance
with
the
investment
objectives
and
restrictions
of
each
separate
series
(each
a
“Fund,”
together,
the
“Funds”)
of
the
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”),
investment
advisory
services
are
provided
to
the
Funds
by
Allianz
Investment
Management
LLC
(the
“Manager”).
The
Manager
manages
each
Fund
pursuant
to
an
investment
management
agreement
(the
“Management
Agreement”)
with
the
Trust
in
respect
of
each
such
Fund.
The
Management
Agreement
provides
that
the
Manager,
subject
to
the
supervision
and
approval
of
the
Board,
is
responsible
for
the
management
of
each
Fund.
For
management
services,
each
Fund
pays
the
Manager
an
investment
advisory
fee
based
upon
each
Fund’s
average
daily
net
assets.
The
Manager
has
contractually
agreed
to
limit
the
expenses
of
each
Fund
by
reimbursing
the
Fund
if
and
when
total
Fund
operating
expenses
exceed
certain
amounts
until
at
least
April
30,
2025
(the
“Expense
Limitation
Agreement”).
In
reviewing
the
services
provided
by
the
Manager
and
the
terms
of
the
Management
Agreement,
the
Board
receives
and
reviews
information
related
to
the
Manager’s
experience
and
expertise
in
the
variable
insurance
marketplace.
In
addition,
the
Board
receives
information
regarding
the
Manager’s
expertise
with
regard
to
portfolio
diversification
and
asset
allocation
requirements
within
variable
insurance
products
issued
by
Allianz
Life
Insurance
Company
of
North
America
(“Allianz
Life”)
and
its
subsidiary,
Allianz
Life
Insurance
Company
of
New
York
(“Allianz
of
New
York”).
Currently,
the
Funds
are
offered
only
through
Allianz
Life
and
Allianz
of
New
York
variable
products,
and
not
in
the
retail
fund
market.
As
required
by
the
Investment
Company
Act
of
1940
(the
“1940
Act”),
the
Board
has
reviewed
and
approved
the
Management
Agreement
with
the
Manager.
The
Board’s
decision
to
approve
this
contract
reflects
the
exercise
of
its
business
judgment
on
whether
to
approve
new
arrangements
and
continue
the
existing
arrangements.
During
its
review
of
the
contract,
the
Board
considered
many
factors,
among
the
most
material
of
which
are:
the
Fund’s
investment
objectives
and
long-term
performance;
the
Manager’s
management
philosophy,
personnel,
processes
and
investment
performance,
including
its
compliance
history
and
the
adequacy
of
its
compliance
processes;
the
preferences
and
expectations
of
Fund
shareholders
(and
underlying
contract
owners)
and
their
relative
sophistication;
the
continuing
state
of
competition
in
the
mutual
fund
industry;
and
comparable
fees
in
the
mutual
fund
industry.
The
Board
also
considered
the
compensation
and
benefits
received
by
the
Manager.
This
includes
fees
received
for
services
provided
to
a
Fund
by
employees
of
the
Manager
or
of
affiliates
of
the
Manager
and
research
services
received
by
the
Manager
from
brokers
that
execute
Fund
trades,
as
well
as
advisory
fees.
The
Board
considered
the
fact
that:
(1) the
Manager
and
the
Trust
are
parties
to
an
Administrative
Services
Agreement
and
a
Compliance
Services
Agreement,
under
which
the
Manager
is
compensated
by
the
Trust
for
performing
certain
administrative
and
compliance
services
including
providing
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer;
and
(2) Allianz
Life
Financial
Services,
LLC,
an
affiliated
person
of
the
Manager,
is
a
registered
securities
broker-dealer
and
received
(along
with
its
affiliated
persons)
payments
made
by
the
underlying
funds
pursuant
to
Rule 12b1.
The
Board
is
aware
that
various
courts
have
interpreted
provisions
of
the
1940
Act
and
have
indicated
in
their
decisions
that
the
following
factors
may
be
relevant
to
an
adviser’s
compensation:
the
nature,
extent
and
quality
of
the
services
provided
by
the
adviser,
including
the
performance
of
the
fund;
the
adviser’s
cost
of
providing
the
services;
the
extent
to
which
the
adviser
may
realize
“economies
of
scale”
as
the
fund
grows
larger;
any
indirect
benefits
that
may
accrue
to
the
adviser
and
its
affiliates
as
a
result
of
the
adviser’s
relationship
with
the
fund;
performance
and
expenses
of
comparable
funds;
the
profitability
of
acting
as
adviser
to
the
fund;
and
the
extent
to
which
the
independent
Board
members,
who
are
not
“interested
persons”
of
a
fund
as
defined
by
the
1940
Act
(“Independent
Trustees”),
are
fully
informed
about
all
facts
bearing
on
the
adviser’s
services
and
fees.
The
Board
is
aware
of
these
factors
and
takes
them
into
account
in
its
review
of
the
Management
Agreement
for
the
Funds.
Each
member
of
the
Board
considered
and
weighed
these
factors
in
light
of
his
or
her
experience
in
governing
the
Trust.
The
Board
is
assisted
in
its
deliberations
by
the
advice
of
independent
legal
counsel
to
the
Independent
Trustees
(“Independent
Trustee
Counsel”).
In
this
regard,
the
Board
requests
and
receives
a
significant
amount
of
information
about
the
Funds
and
the
Manager.
Some
of
this
information
is
provided
at
each
regular
meeting
of
the
Board;
additional
information
is
provided
in
connection
with
the
particular
meetings
at
which
the
Board’s
formal
review
of
the
Management
Agreement
occurs.
In
between
regularly
scheduled
meetings,
the
Board
may
receive
information
on
particular
matters
as
the
need
arises.
Thus,
the
Board’s
evaluation
of
the
Management
Agreement
is
informed
by
reports
covering
such
matters
as:
the
Manager’s
investment
philosophy,
personnel
and
processes,
and
the
Fund’s
investment
performance
(in
absolute
terms
as
well
as
in
relationship
to
its
benchmark
and
certain
competitor
or
“peer
group”
funds).
In
connection
with
comparing
the
performance
of
each
Fund
versus
its
benchmark,
the
Board
receives
reports
on
the
extent
to
which
the
Fund’s
performance
may
be
attributed
to
various
applicable
factors,
such
as
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
rebalancing
decisions,
and
the
impact
of
cash
positions
and
Fund
fees
and
expenses.
The
Board
also
receives
reports
on
the
Funds’
expenses
(including
the
advisory
fee
itself
and
the
overall
expense
structure
of
the
Funds,
both
in
absolute
terms
and
relative
to
peer
group
and/or
competing
funds,
with
due
regard
for
the
Expense
Limitation
Agreement
and
additional
voluntary
expense
limitations);
the
use
and
allocation
of
any
brokerage
commissions
derived
from
trading
the
Funds’
portfolio
securities;
the
nature,
extent
and
quality
of
the
advisory
and
other
services
provided
to
the
Fund
by
the
Manager
and
its
affiliates;
compliance
and
audit
reports
concerning
the
Funds
and
the
companies
that
service
them;
and
relevant
developments
in
the
mutual
fund
industry
and
how
the
Funds
and/or
the
Manager
are
responding
to
them.
The
Board
also
receives
financial
information
about
the
Manager,
including
reports
on
the
compensation
and
benefits
the
Manager
derives
from
its
relationships
with
the
Funds.
These
reports
cover
not
only
the
fees
under
the
Management
Agreement,
but
also
the
fees,
if
any,
received
for
providing
other
services
to
the
Funds.
The
reports
also
discuss
any
indirect
or
“fall-out”
benefits
the
Manager
or
its
affiliates
may
derive
from
their
relationships
with
the
Funds.
The
Management
Agreement
was
most
recently
considered
at
Board
meetings
held
in
the
summer
and
fall
of
2023.
Information
relevant
to
the
approval
of
the
Management
Agreement
was
considered
at
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
as
well
as
at
various
other
meetings
preceding
those
meetings.
Accordingly,
the
Management
Agreement
was
approved
by
the
Board
at
an
in-person
meeting
on
September
19,
2023.
At
such
meeting
the
Board
also
approved
the
Expense
Limitation
Agreement
between
the
Manager
and
the
Trust
for
the
period
ending
April 30,
2025.
In
connection
with
such
meetings,
the
Board
requested
and
evaluated
extensive
materials
from
the
Manager,
including
performance
and
expense
information
for
other
investment
companies
with
similar
investment
objectives
derived
from
data
compiled
by
an
independent
third-party
provider
and
other
sources
believed
to
be
reliable
by
the
Manager
and
the
Trustees.
Prior
to
voting,
the
Trustees
reviewed
the
proposed
approval
of
the
Management
Agreement
with
management
and
with
Independent
Trustee
Counsel
and
received
a
memorandum
from
such
counsel
discussing
the
legal
standards
for
their
consideration
of
the
proposed
approval.
The
Independent
Trustees
also
discussed
the
proposed
approval
in
private
sessions
with
Independent
Trustee
Counsel
at
which
no
representatives
of
the
Manager
were
present.
In
reaching
their
determinations
relating
to
the
approval
of
the
Management
Agreement,
in
respect
of
each
Fund,
each
member
of
the
Board
considered
all
factors
he
or
she
believed
relevant.
The
Board
based
its
decision
to
approve
19
the
Management
Agreement
on
the
totality
of
the
circumstances
and
relevant
factors,
and
with
a
view
to
past
and
future
long-term
considerations.
Not
all
of
the
factors
and
considerations
discussed
above
and
below
are
necessarily
relevant
to
every
Fund,
and
the
Board
did
not
assign
relative
weights
to
factors
discussed
herein
or
deem
any
one
or
group
of
them
to
be
controlling
in
and
of
themselves.
Shareholder
reports
must
include
a
discussion
of
certain
factors
relating
to
the
selection
of
the
investment
adviser
and
the
approval
of
the
advisory
fee.
The
“factors”
enumerated
by
the
SEC
are
set
forth
below
in
italics,
as
well
as
the
Board’s
conclusions
regarding
such
factors:
(1)
The
nature,
extent
and
quality
of
services
provided
by
the
Manager.
The
Trustees
noted
that
the
Manager,
subject
to
the
oversight
of
the
Board,
administers
each
Fund’s
business
and
other
affairs.
The
Trustees
noted
that
the
Manager
also
provides
the
Trust
and
each
Fund
with
such
administrative
and
other
services
(exclusive
of,
and
in
addition
to,
any
such
services
provided
by
any
other
service
providers
retained
by
the
Trust
on
behalf
of
the
Funds)
and
executive
and
other
personnel
as
are
necessary
for
the
operation
of
the
Trust
and
the
Funds.
Except
for
the
Trust’s
Chief
Compliance
Officer
and
certain
compliance
staff,
the
Manager
pays
all
of
the
compensation
of
Trustees
and
officers
of
the
Trust
who
are
employees
of
the
Manager
or
its
affiliates.
The
Board
considered
the
scope
and
quality
of
services
provided
by
the
Manager
and
noted
that
the
scope
of
the
services
provided
has
continued
to
expand
as
a
result
of
regulatory
and
other
developments.
The
Board
noted,
for
example,
that
the
Manager
is
responsible
for
maintaining
and
monitoring
its
own
compliance
program,
and
this
compliance
program
has
been
continuously
refined
and
enhanced
in
light
of
new
regulatory
requirements.
The
Board
considered
the
capabilities
and
resources
which
the
Manager
has
dedicated
to
performing
services
on
behalf
of
the
Trust
and
its
Funds.
The
quality
of
administrative
and
other
services,
including
the
Manager’s
role
in
coordinating
the
activities
of
the
Trust’s
other
service
providers,
also
were
considered.
The
Board
concluded
that,
overall,
they
were
satisfied
with
the
nature,
extent
and
quality
of
services
provided
(and
expected
to
be
provided)
to
the
Trust
and
to
each
of
the
Funds
under
the
Management
Agreement.
(2)
The
investment
performance
of
the
Funds
and
the
Manager.
In
connection
with
every
quarterly
Board
meeting
and
the
summer
and
fall
2023
contract
review
process,
Trustees
received
extensive
information
on
the
performance
results
of
each
Fund.
This
included,
for
example,
performance
information
on
absolute
total
return,
performance
versus
the
appropriate
benchmark(s)
and
performance
versus
peer
groups
as
reported
by
Lipper,
the
contribution
to
performance
of
the
Manager’s
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
and
the
impact
on
performance
of
rebalancing
decisions,
cash
and
Fund
fees.
This
included
Lipper
performance
information
on
the
Funds
for
the
previous
quarter,
and
previous
one-,
three-
and
five-year
periods,
to
the
extent
available.
For
example,
in
connection
with
the
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
the
Manager
reported
that,
for
the
five-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
reported
that
for
the
three-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
four
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
also
reported
on
the
performance
of
the
MVP
Funds
compared
to
custom
managed-volatility
peer
groups.
For
the
five-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
middle
20%
of
its
respective
custom
managed-volatility
peer
group.
For
the
three-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%
and
three
were
in
the
middle
20%
of
their
respective
custom
managed-volatility
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
bottom
40%
of
its
respective
custom
managed-volatility
peer
group.
The
Board
members
discussed
with
the
Manager
and
considered
the
impact
of
the
volatility
management
strategies
on
performance
in
different
market
environments,
where
applicable,
and
considered
whether
they
were
operating
as
intended.
The
Board
noted,
in
particular,
the
impact
on
longer-term
performance
of
certain
characteristics
of
the
Funds’
volatility
management
strategies
in
relation
to
volatility
experienced
as
a
result
of
the
COVID-19
pandemic,
and
that
relative
performance
had
improved
as
the
markets
stabilized.
At
the
Board
meeting
held
September
19,
2023,
the
Board
also
received
updated
performance
information
for
the
Funds,
including
updated
Lipper
peer
group
ranking
information,
for
various
periods
ending
June
30,
2023.
At
the
Board
meeting
held
September
19,
2023,
the
Trustees
determined
that
the
investment
performance
of
the
Funds
was
acceptable.
(3)
The
costs
of
services
to
be
provided
and
profits
to
be
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Funds.
The
Board
considered
that
the
Manager
receives
an
advisory
fee
from
each
of
the
Funds.
The
Manager
reported
that
for
the
four
MVP
Index
Strategy
Funds,
the
advisory
fee
paid
was
in
the
31st
percentile
of
the
customized
peer
group,
and
for
the
AZL
Balanced
Index
Strategy
Fund,
the
advisory
fee
paid
was
in
the
8th
percentile
of
the
customized
peer
group.
The
Manager
reported
that
for
the
AZL
DFA
Multi-Strategy
Fund,
the
advisory
fee
paid
was
in
the
6th
percentile.
The
Manager
reported
that
for
the
AZL
MVP
DFA
Multi-Strategy,
AZL
MVP
FIAM
Multi-Strategy,
and
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Funds,
the
advisory
fee
paid
was
in
the
1st
percentile.
(A
lower
percentile
reflects
lower
fund
fees
and
is
better
for
fund
shareholders.)
Trustees
were
provided
with
information
on
the
total
expense
ratios
of
the
Funds
and
other
funds
in
the
customized
peer
groups,
and
the
Manager
reported
upon
the
challenges
in
making
peer
group
comparisons
for
the
Funds.
The
Board
further
considered
and
found
that
the
advisory
fee
paid
to
the
Manager
with
respect
to
each
Fund
was
based
on
services
provided
to
the
Fund
that
were
in
addition
to,
rather
than
duplicative
of,
the
services
provided
pursuant
to
the
advisory
agreements
for
the
underlying
funds
in
which
the
Fund
invests.
The
Manager
provided
information
concerning
the
profitability
of
the
Manager’s
investment
advisory
activities
for
the
period
from
2020
through
2022.
The
Board
recognized
that
it
is
difficult
to
make
comparisons
of
profitability
from
investment
company
advisory
agreements
because
comparative
information
is
not
generally
publicly
available
and
is
affected
by
numerous
factors,
including
the
structure
of
the
particular
adviser,
the
types
of
funds
it
manages,
its
business
mix,
numerous
assumptions
regarding
allocation
of
expenses
and
the
adviser’s
capital
structure
and
cost
of
capital.
In
considering
profitability
information,
the
Board
considered
the
possible
effect
of
certain
fall-out
benefits
to
the
Manager
and
its
affiliates.
The
Board
focused
on
profitability
of
the
Manager’s
relationships
with
the
Funds
before
taxes
and
distribution
expenses.
The
Board
recognized
that
the
Manager
should
earn
a
reasonable
level
of
profits
for
the
services
it
provides
to
each
Fund.
(4)
and
(5)
The
extent
to
which
economies
of
scale
would
be
realized
as
the
Funds
grow,
and
whether
fee
levels
reflect
these
economies
of
scale.
The
Board
noted
that
the
advisory
fee
schedules
for
the
Funds
do
not
contain
breakpoints
that
reduce
the
fee
rate
on
assets
above
specified
levels.
The
Board
recognized
that
breakpoints
may
be
an
appropriate
way
for
the
Manager
to
share
its
economies
of
scale,
if
any,
with
Funds
that
have
substantial
assets.
The
Board
found
there
was
no
uniform
methodology
for
establishing
breakpoints
that
give
effect
to
Fund-specific
services
provided
by
the
Manager.
The
Board
noted
that
in
the
fund
industry
as
a
whole,
as
well
as
among
funds
similar
to
the
Funds,
there
is
no
uniformity
or
pattern
in
the
fees
and
asset
levels
at
which
breakpoints
(if
any)
apply.
Depending
on
the
age,
size,
and
other
characteristics
of
a
particular
fund
and
its
manager’s
cost
structure,
different
conclusions
can
be
drawn
as
to
whether
there
are
economies
of
scale
to
be
realized
at
any
particular
level
of
assets,
notwithstanding
the
intuitive
conclusion
that
such
economies
exist,
or
will
be
realized
at
some
level
of
total
assets.
Moreover,
because
different
managers
have
different
cost
structures
and
service
models,
it
is
difficult
to
draw
meaningful
20
conclusions
from
the
breakpoints
that
may
have
been
adopted
by
other
funds.
The
Board
also
noted
that
the
advisory
agreements
for
many
funds
do
not
have
breakpoints
at
all,
or
if
breakpoints
exist,
they
may
be
at
asset
levels
significantly
greater
than
those
of
the
individual
Funds.
The
Board
noted
that
the
total
assets
in
all
of
the
Funds,
as
of
June
30,
2023,
were
approximately
$7.8 billion
and
that
the
largest
Fund,
the
AZL
MVP
Growth
Index
Strategy
Fund,
had
assets
of
approximately
$2.0 billion.
The
Board
noted
that
the
Manager
has
agreed
to
temporarily
limit
Fund
expenses
under
the
Expense
Limitation
Agreement,
which
has
the
effect
of
reducing
expenses
similar
to
implementation
of
advisory
fee
breakpoints.
The
Manager
has
committed
to
continue
to
consider
the
continuation
of
expense
limits
and/or
advisory
fee
breakpoints
as
Fund
assets
change.
The
Board
receives
quarterly
reports
on
the
level
of
Fund
assets.
The
Board
expects
to
continue
to
consider:
(a) the
extent
to
which
economies
of
scale
have
been
realized,
and
(b) whether
the
advisory
fee
should
be
modified,
either
in
connection
with
the
next
renewal
of
the
Management
Agreement
or
by
modifying
the
Expense
Limitation
Agreement,
to
reflect
such
economies
of
scale,
if
any.
Having
taken
these
factors
into
account,
the
Board
concluded
that
the
absence
of
breakpoints
in
the
Funds’
advisory
fee
rate
schedules
was
acceptable
under
each
Fund’s
circumstances.
In
conclusion,
after
full
consideration
of
the
above
factors,
as
well
as
such
other
factors
as
each
member
of
the
Board
considered
instructive
in
evaluating
the
Management
Agreement,
the
Board
concluded
that
the
advisory
fees
were
reasonable,
and
that
the
continuation
of
the
Management
Agreement
was
in
the
best
interest
of
the
Funds.
21
Information
about
the
Board
of
Trustees
and
Officers
(Unaudited)
The
Trust
is
managed
by
the
Trustees
in
accordance
with
the
laws
of
the
state
of
Delaware
governing
business
trusts.
In
addition
to
serving
on
the
Board
of
Trustees
of
the
Trust,
each
Trustee
serves
on
the
Board
of
the
Allianz
Variable
Insurance
Products
Trust
(“VIP
Trust”)
and
the
AIM
ETF
Products
Trust
(“ETF
Trust”)
(collectively,
the
Trust,
the
VIP
Trust,
and
ETF
Trust
are
the
“AIM
Complex”).
There
are
currently
six
Trustees,
one
of
whom
is
an
“interested
person”
of
the
Trust
within
the
meaning
of
that
term
under
the
1940
Act.
The
Trustees
and
Officers
of
the
Trust,
their
addresses,
years
of
birth,
their
positions
held
with
the
Trust,
their
terms
of
office
with
the
Trust
and
length
of
time
served,
their
principal
occupation(s)
during
the
past
five
years,
the
number
of
portfolios
in
the
Trust
they
oversee,
and
their
other
directorships
held
during
the
past
five
years
are
as
follows:
Independent
Trustees
(
1)
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Peggy
L.
Ettestad
(1957)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Lead
Independent
Trustee
Since
10/14
(Trustee
since
2/07)
Managing
Director,
Red
Canoe
Management
Consulting
LLC,
2008
to
present
56
None
Tamara
Lynn
Fagely
(1958)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Chief
Operations
Officer,
Hartford
Funds,
2012
to
2013
56
Diamond
Hill
Funds
(10
Funds)
Richard
H.
Forde
(1953)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Member
of
the
Board
and
Chairman
of
the
Finance
and
Investment
Committee,
Connecticut
Water
Service,
Inc.,
2013
to
2019
56
Connecticut
Water
Service,
Inc.
Jack
Gee
(1959)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
01/22
Retired;
previously,
Managing
Director,
BlackRock,
Inc.,
Treasurer
and
Chief
Financial
Officer
U.S.
iShares,
2004
to
2019
56
TCW
ETF
Trust
(3
Funds);
Esoterica
Thematic
Trust
(2019
-
2020)
Claire
R.
Leonardi
(1955)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
02/04
Retired;
previously,
CEO,
Health
eSense
Inc.
(a
medical
device
company),
2015
to
2018,
and
Connecticut
Innovations,
Inc.
(a
venture
capital
firm),
2012
to
2015
56
None
22
Interested
Trustee
(
3)
(1)
Each
of
the
Independent
Trustees
is
a
member
of
the
Audit
and
Operational
Risk
Oversight
Committee.
(2)
Indefinite.
(3)
Is
an
“interested
person,”
as
defined
by
the
1940
Act,
due
to
employment
by
Allianz
Life
and
the
Manager.
Officers
(1)
Indefinite.
(2)
The
Manager
and
the
Trust
are
parties
to
a
Compliance
Services
Agreement
under
which
the
Manager
provides
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer.
The
Fund’s
Statement
of
Additional
Information
(“SAI”)
contains
additional
information
about
the
Trust’s
Trustees
and
Officers.
The
SAI
is
available
without
charge,
upon
request,
by
calling
toll-free
800-624-0197
or
at
https://www.allianzlife.com.
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
06/11
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
56
None
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(1)
/
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
President
Since
11/10
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
Amanda
Farren
(1978)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Secretary
Since
02/24
Chief
Legal
Officer,
Allianz
Investment
Management
LLC;
Senior
Counsel,
Allianz
Life,
January
2024
to
present;
Senior
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2023;
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2015
-2023
Bashir
C.
Asad
(1963)
Citi
Fund
Services
Ohio,
Inc.
4400
Easton
Commons,
Suite
200
Columbus,
OH
43219
Treasurer,
Principal
Accounting
Officer
and
Principal
Financial
Officer
Since
06/16
Senior
Vice
President,
Citi
Fund
Services
Ohio,
Inc.,
2011
to
present
Chris
R.
Pheiffer
(1968)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Chief
Compliance
Officer
(2)
and
Anti-Money
Laundering
Compliance
Officer
Since
02/14
Chief
Compliance
Officer
of
the
Trust
and
the
VIP
Trust,
2014
to
present,
and
the
ETF
Trust,
2020
to
present
Michael
Tanski
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
04/09
Assistant
Vice
President,
Allianz
Investment
Management
LLC,
2013
to
present.
Laura
Quade
(1969)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
08/23
Vice
President,
Allianz
Investment
Management
LLC,
2023
to
present,
previously
Director
at
Wealth
Enhancement
Group,
November
2019
to
November
2022;
Vice
President,
Head
of
Operations
at
Hartford
Funds
2014
to
2019
ANNRPT1223
02/24
The
Allianz
VIP
Fund
of
Funds
are
distributed
by
Allianz
Life
Financial
Services,
LLC.
These
Funds
are
not
FDIC
Insured.
AZL®
MVP
Growth
Index
Strategy
Fund
Annual
Report
December
31,
2023
Table
of
Contents
AZL®
MVP
Growth
Index
Strategy
Fund
Management
Discussion
and
Analysis
Page
1
Expense
Examples
and
Portfolio
Composition
Page
3
Schedule
of
Portfolio
Investments
Page
4
Statement
of
Assets
and
Liabilities
Page
5
Statement
of
Operations
Page
5
Statements
of
Changes
in
Net
Assets
Page
6
Financial
Highlights
Page
7
Notes
to
the
Financial
Statements
Page
8
Report
of
Independent
Registered
Public
Accounting
Firm
Page
13
Other
Federal
Income
Tax
Information
Page
14
Other
Information
Page
15
Approval
of
Investment
Advisory
Agreement
Page
16
Information
about
the
Board
of
Trustees
and
Officers
Page
19
This
report
is
submitted
for
the
general
information
of
the
shareholder
of
the
Fund.
The
report
is
not
authorized
for
distribution
to
prospective
investors
in
the
Fund
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
contains
details
concerning
the
sales
charges
and
other
pertinent
information.
1
AZL®
MVP
Growth
Index
Strategy
Fund
Review
(Unaudited)
Allianz
Investment
Management
LLC
serves
as
the
Manager
for
the
AZL
®
MVP
Growth
Index
Strategy
Fund.
What
factors
affected
the
Fund’s
performance
during
the
year
ended
December
31,
2023?*
For
the
year
ended
December
31,
2023,
the
AZL
MVP
Growth
Index
Strategy
Fund
(the
“Fund”)
returned
16.81%.
That
compared
to
26.29%,
5.53%
and
20.88%
total
return
for
its
benchmarks,
the
S&P
500
Index,
the
Bloomberg
U.S.
Aggregate
Bond
Index,
and
the
Growth
Composite
Index,
respectively.
1
The
AZL
MVP
Growth
Index
Strategy
Fund
is
a
fund
of
funds
that
pursues
broad
diversification
across
four
underlying
equity
sub-portfolios
and
one
fixed
income
sub-portfolio.
The
four
equity
sub-portfolios
pursue
passive
strategies
that
aim
to
achieve,
before
fees,
returns
similar
to
the
S&P
500
Index,
the
S&P
MidCap
400
Index
2
,
the
S&P
SmallCap
600
Index
3
,
and
the
MSCI
EAFE
Index
4
.
The
fixed-income
sub-portfolio
is
an
enhanced
bond
index
strategy
that
seeks
to
achieve
a
return
that
exceeds
that
of
the
Bloomberg
U.S.
Aggregate
Bond
Index.
Generally,
the
Fund
allocates
65%
to
85%
of
its
assets
to
the
underlying
equity
index
funds
and
15%
to
35%
of
its
assets
to
the
underlying
AZL
Enhanced
Bond
Index
Fund.
The
Fund
also
employs
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process,
which
is
intended
to
adjust
the
risk
of
the
portfolio
based
on
quantitative
indicators
of
market
risk,
such
as
the
current
level
of
Fund
and
market
volatility.
U.S.
equities,
particularly
large-cap
stocks,
posted
positive
performance
in
2023.
The
gains
were
due
in
part
to
falling
inflation
and
better-than-expected
earnings,
as
well
as
resilient
consumer
demand.
The
European
Central
Bank’s
(ECB)
monetary
tightening
had
a
negative
effect
on
economic
growth
in
the
Eurozone,
and
Russia’s
war
with
Ukraine
continued
to
weigh
on
international
equities.
The
U.S.
fixed
income
market
received
a
boost
after
the
Federal
Reserve
announced
a
possible
end
to
future
interest
rate
hikes.
Most
sectors
of
the
bond
market
finished
with
positive
performance
in
2023.
The
Fund,
which
invests
in
both
U.S.
and
international
markets,
underperformed
its
blended
benchmark
during
the
year
ended
December
31,
2023.
Its
off-benchmark
allocation
to
developed
market
non-U.S.
equities
slightly
detracted
from
relative
performance,
as
these
underperformed
U.S.
equities.
The
Fund’s
off-benchmark
allocation
to
mid-cap
and
small-cap
U.S.
equities
also
slightly
detracted
from
relative
performance,
as
these
underperformed
the
S&P
500
Index.
The
MVP
risk
management
process
uses
derivatives
to
seek
to
control
portfolio
volatility
in
unstable
market
conditions.
The
MVP
process
was
engaged
during
the
year
and
reduced
the
Fund’s
equity
exposure
at
multiple
points
during
the
year.
The
MVP
process
slightly
detracted
from
the
Fund’s
performance
during
2023.
Past
performance
does
not
guarantee
future
results.
*
The
Fund’s
portfolio
composition
is
subject
to
change.
There
is
no
guarantee
that
any
sectors
mentioned
will
continue
to
perform
as
described
or
that
securities
in
such
sectors
will
be
held
by
the
Fund
in
the
future.
The
information
contained
in
this
commentary
is
for
informational
purposes
only
and
should
not
be
construed
as
a
recommendation
to
purchase
or
sell
securities
in
the
sector
mentioned.
The
Fund’s
holdings
and
weightings
are
as
of
December
31,
202
3
.
1
For
a
complete
description
of
the
Fund’s
pe
rformance
benchmarks
please
refer
to
page
2
of
this
report.
2
The
Standard
&
Poor’s
Mi
dCap
400
Index
(“S&P
400”)
is
a
widely
used
index
for
m
id-sized
companies.
The
S&P
400
covers
7%
of
the
U.S.
eq
uities
market,
and
is
part
of
a
series
of
S&P
U.S.
indexes
tha
t
can
be
used
as
building
blocks
for
portfolio
composition
.
3
The
Standard
&
Poor’s
SmallCap
600
Index
(“S&P
600”)
is
a
widely
used
index
for
small
capitalization
companies.
The
S&P
600
covers
3%
of
the
U.S.
equities
market,
and
is
part
of
a
series
of
S&P
U.S.
indexes
that
can
be
used
as
building
blocks
for
portfolio
composition
.
4
The
Morgan
Stanley
Capi
tal
International,
Europe,
Australasia
and
Far
Eas
t
(“MSCI
EAFE”)
Index
is
a
free
float-adjusted
market
capita
lization-
weighted
index
that
is
designed
to
measure
t
he
equity
market
performance
of
developed
markets,
excluding
the
U.S.
&
Canada.
The
indexes
defined
above
are
unmanaged.
Investors
cannot
invest
directly
in
an
index.
2
AZL®
MVP
Growth
Index
Strategy
Fund
Review
(Unaudited)
Fund
Objective
The
Fund’s
investment
objective
is
to
seek
long-term
capital
appreciation.
This
objective
may
be
changed
by
the
Trustees
of
the
Fund
without
shareholder
approval.
The
Fund
seeks
to
achieve
its
objective
by
investing
in
five
underlying
index
funds
(the
"Index
Strategy
Underlying
Funds"),
allocating
approximately
65%-85%
of
its
assets
in
the
underlying
equity
index
funds
and
approximately
15%-35%
of
its
assets
in
the
underlying
bond
index
fund.
Investment
Concerns
The
Fund
invests
in
underlying
funds,
so
its
investment
performance
is
directly
related
to
the
performance
of
those
underlying
funds.
Before
investing,
investors
should
assess
the
risks
associated
with
and
types
of
investments
made
by
each
of
the
underlying
funds
in
which
the
Fund
invests.
Quantitative
investing
involves
risk
that
the
values
of
securities
selected
in
the
quantitative
analysis
can
react
differently
than
the
market
or
securities
selected
using
fundamental
analysis.
Stocks
are
more
volatile
and
carry
more
risk
and
return
potential
than
other
forms
of
investments.
International
investing
may
involve
risk
of
capital
loss
from
unfavorable
fluctuations
in
currency
values,
from
differences
in
generally
accepted
accounting
principles
or
from
economic
or
political
instability
in
other
nations.
Small-
to
mid-capitalization
companies
typically
have
a
higher
risk
of
failure
and
historically
have
experienced
a
greater
degree
of
volatility.
The
performance
of
the
underlying
funds
is
expected
to
be
lower
than
that
of
the
Indexes
because
of
fees
and
expenses.
Securities
in
which
the
underlying
funds
will
invest
may
involve
substantial
risk
and
may
be
subject
to
sudden
severe
price
declines.
Investing
in
a
single
industry
or
sector,
or
concentrating
investments
in
a
limited
number
of
industries
or
sectors,
tends
to
increase
the
risk
that
economic,
political,
or
regulatory
developments
affecting
certain
industries
or
sectors
will
have
a
large
impact
on
the
value
of
the
portfolio.
Bonds
offer
a
relatively
stable
level
of
income,
although
bond
prices
will
fluctuate,
providing
the
potential
for
principal
gain
or
loss.
Mortgage-backed
investments
involve
risk
of
loss
due
to
prepayments
and,
like
any
bond,
due
to
default.
Because
of
the
sensitivity
of
mortgage-
related
securities
to
changes
in
interest
rates,
an
underlying
fund’s
performance
may
be
more
volatile
than
if
it
did
not
hold
these
securities.
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
Investing
in
derivative
instruments
involves
risks
that
may
be
different
from
or
greater
than
the
risk
associated
with
investing
directly
in
securities
or
other
traditional
instruments.
For
a
complete
description
of
these
and
other
risks
associated
with
investing
in
the
Fund,
please
refer
to
the
Fund’s
prospectus.
Growth
of
$10,000
Investment
The
chart
above
represents
a
comparison
of
a
hypothetical
investment
in
the
Fund
versus
a
similar
investment
in
the
Fund’s
benchmarks
and
represents
the
reinvestment
of
dividends
and
capital
gains
in
the
Fund.
Past
performance
does
not
guarantee
future
results.
The
performance
data
quoted
represents
past
performance
and
current
returns
may
be
lower
or
higher.
The
investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
the
original
cost.
To
obtain
performance
information
current
to
the
most
recent
month
end,
please
visit
www.Allianzlife.com.
The
above
expense
ratio
is
based
on
the
current
Fund
prospectus
dated
May
1,
2023.
The
Manager
and
the
Fund
have
entered
into
a
written
agreement
limiting
operating
expenses,
excluding
certain
expenses
(such
as
interest
expense
and
acquired
fund
fees
and
expenses),
to
0.20%
through
April
30,
2025.
Additional
information
pertaining
to
the
December
31,
2023
expense
ratio
can
be
found
in
the
Financial
Highlights.
Acquired
fund
fees
and
expenses
are
incurred
indirectly
by
the
Fund
through
the
valuation
of
the
Fund’s
investments
in
the
Index
Strategy
Underlying
Funds.
Accordingly,
acquired
fund
fees
and
expenses
affect
the
Fund’s
total
returns.
Because
these
fees
and
expenses
are
not
included
in
the
Fund’s
financial
highlights,
the
Fund’s
total
annual
fund
operating
expenses,
as
shown
in
the
current
prospectus,
do
not
correlate
to
the
ratios
of
expenses
to
average
net
assets
shown
in
the
Financial
Highlights.
Without
acquired
fund
fees
and
expenses
the
Fund’s
gross
expense
ratio
would
be
0.12%.
The
total
return
of
the
Fund
does
not
reflect
the
effect
of
any
insurance
charges,
the
annual
maintenance
fee
or
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Such
charges,
fees
and
tax
payments
would
reduce
the
performance
quoted.
The
Fund’s
performance
is
measured
against
the
Standard
&
Poor’s
500
Index
(“S&P
500”),
the
Bloomberg
U.S.
Aggregate
Bond
Index
and
the
Growth
Composite
Index
(“Composite”).
The
S&P
500
is
representative
of
500
selected
common
stocks,
most
of
which
are
listed
on
the
New
York
Stock
Exchange,
and
is
a
measure
of
the
U.S.
Stock
market
as
a
whole.
The
Bloomberg
U.S.
Aggregate
Bond
Index
is
a
market
value-weighted
performance
benchmark
for
investment-grade
fixed-rate
debt
issues,
including
government,
corporate,
asset-backed,
and
mortgage-backed
securities,
with
maturities
of
at
least
one
year.
The
Composite
is
a
blended
index
comprised
of
(75%)
S&P
500
and
(25%)
Bloomberg
U.S.
Aggregate
Bond
Index.
These
indexes
are
unmanaged
and
do
not
reflect
the
deduction
of
fees
associated
with
a
mutual
fund,
such
as
investment
management
and
fund
accounting
fees.
The
Fund’s
performance
reflects
the
deduction
of
fees
for
services
provided
to
the
Fund.
Investors
cannot
invest
directly
in
an
index.
Average
Annual
Total
Returns
as
of
December
31,
2023
1
Year
3
Years
5
Years
10
Years
AZL
®
MVP
Growth
Index
Strategy
Fund
16.81%
4.90%
7.82%
5.95%
Bloomberg
U.S.
Aggregate
Bond
Index
5.53%
(3.31)%
1.10%
1.81%
Growth
Composite
Index
20.88%
6.69%
12.23%
9.63%
S&P
500
Index
26.29%
10.00%
15.69%
12.03%
Expense
Ratio
Gross
AZL
®
MVP
Growth
Index
Strategy
Fund
0.66%
AZL
MVP
Growth
Index
Strategy
Fund
3
Expense
Examples
(Unaudited)
As
a
shareholder
of
the
AZL
MVP
Growth
Index
Strategy
Fund
(the
“Fund”),
you
incur
ongoing
costs,
including
management
fees,
distribution
fees,
and
other
Fund
expenses.
These
examples
are
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
Please
note
that
the
expenses
shown
in
each
table
do
not
reflect
expenses
that
apply
to
the
subaccount
or
the
insurance
contract.
If
the
expenses
that
apply
to
the
subaccount
or
the
insurance
contract
were
included,
your
costs
would
have
been
higher.
These
examples
are
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
periods
presented
below.
The
Actual
Expense
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
below,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
table
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
this
period.
The
Hypothetical
Expense
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
Growth
Index
Strategy
Fund
$1,000.00
$1,060.40
$0.62
0.12%
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
Growth
Index
Strategy
Fund
$1,000.00
$1,024.60
$0.61
0.12%
*
Expenses
are
equal
to
the
average
account
value
multiplied
by
the
Fund's
annualized
expense
ratio
multiplied
by
184/365
(the
number
of
days
in
the
most
recent
fiscal
half-year
divided
by
the
number
of
days
in
the
fiscal
year).
Portfolio
Composition
(Unaudited)
Investments
Percent
of
Net
Assets
Domestic
Equity
Funds
52
.5
%
Fixed
Income
Fund
23
.4
International
Equity
Fund
19
.2
Total
Investment
Securities
95
.1
Net
other
assets
(liabilities)
4
.9
Net
Assets
100
.0
%
AZL
MVP
Growth
Index
Strategy
Fund
Schedule
of
Portfolio
Investments
December
31,
2023
4
See
accompanying
notes
to
the
financial
statements.
Percentages
indicated
are
based
on
net
assets
as
of
December
31,
2023
.
Shares
Value
Affiliated
Investment
Companies
(
95
.1
%
):
Domestic
Equity
Funds
(
52
.5
%
):
10,413,417
AZL
Mid
Cap
Index
Fund,
Class
2
$
221,180,974
35,507,216
AZL
S&P
500
Index
Fund,
Class
2
716,180,551
9,097,232
AZL
Small
Cap
Stock
Index
Fund,
Class
2
111,350,115
1,048,711,640
1
Fixed
Income
Fund
(
23
.4
%
):
47,692,114
AZL
Enhanced
Bond
Index
Fund
468,336,555
Shares
Value
Affiliated
Investment
Companies,
continued
International
Equity
Fund
(
19
.2
%
):
22,015,481
AZL
International
Index
Fund,
Class
2
$
383,949,980
Total
Affiliated
Investment
Companies
(Cost
$1,535,082,219)
1,900,998,175
Total
Investment
Securities
(Cost
$1,535,082,219)
—
95.1%(a)
1,900,998,175
Net
other
assets
(liabilities)
—
4.9%
98,829,421
Net
Assets
—
100.0%
$
1,999,827,596
(a)
See
Federal
Tax
Information
listed
in
the
Notes
to
the
Financial
Statements.
Futures
Contracts
At
December
31,
2023,
the
Fund's
open
futures
contracts
were
as
follows:
Long
Futures
Description
Expiration
Date
Number
of
Contracts
Notional
Amount
Value
and
Unrealized
Appreciation/
(Depreciation)
S&P
500
Index
E-Mini
March
Futures
(U.S.
Dollar)
3/15/24
309
$
74,469,000
$
2,451,067
U.S.
Treasury
10-Year
Note
March
Futures
(U.S.
Dollar)
3/19/24
221
24,948,828
769,252
$
3,220,319
AZL
MVP
Growth
Index
Strategy
Fund
5
See
accompanying
notes
to
the
financial
statements.
Statement
of
Assets
and
Liabilities
December
31,
2023
Statement
of
Operations
For
the
Year
Ended
December
31,
2023
Assets:
Investments
in
affiliates,
at
cost
$
1,535,082,219
Investments
in
affiliates,
at
value
$
1,900,998,175
Deposit
at
broker
for
futures
contracts
collateral
99,575,657
Interest
and
dividends
receivable
350,062
Receivable
for
affiliated
investments
sold
467,104
Receivable
for
variation
margin
on
futures
contracts
816
Prepaid
expenses
8,879
Total
Assets
2,001,400,693
Liabilities:
Cash
overdraft
467,104
Payable
for
capital
shares
redeemed
874,102
Management
fees
payable
167,188
Administration
fees
payable
9,242
Custodian
fees
payable
10,389
Administrative
and
compliance
services
fees
payable
2,477
Transfer
agent
fees
payable
847
Trustee
fees
payable
10,279
Other
accrued
liabilities
31,469
Total
Liabilities
1,573,097
Commitments
and
contingent
liabilities^
Net
Assets
$
1,999,827,596
Net
Assets
Consist
of:
Paid
in
capital
$
1,754,269,451
Total
distributable
earnings
245,558,145
Net
Assets
$
1,999,827,596
Shares
of
beneficial
interest
(unlimited
number
of
shares
authorized,
no
par
value)
142,825,879
Net
Asset
Value
(offering
and
redemption
price
per
share)
$
14.00
^
See
Note
3
in
Notes
to
the
Financial
Statements.
Investment
Income:
Dividends
from
affiliates
$
27,826,477
Interest
4,124,887
Dividends
from
non-affiliates
138,438
Total
Investment
Income
32,089,802
Expenses:
Management
fees
1,976,580
Administration
fees
104,586
Custodian
fees
55,757
Administrative
and
compliance
services
fees
26,556
Transfer
agent
fees
8,180
Trustee
fees
108,439
Professional
fees
104,223
Shareholder
reports
17,046
Other
expenses
37,198
Total
expenses
2,438,565
Net
Investment
Income/(Loss)
29,651,237
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments:
Net
realized
gains/(losses)
on
affiliated
underlying
funds
25,915,401
Net
realized
gains
distributions
from
affiliated
underlying
funds
39,639,039
Net
realized
gains/(losses)
on
futures
contracts
4,802,206
Change
in
net
unrealized
appreciation/depreciation
on
affiliated
underlying
funds
203,795,153
Change
in
net
unrealized
appreciation/depreciation
on
futures
contracts
3,508,398
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments
277,660,197
Change
in
Net
Assets
Resulting
From
Operations
$
307,311,434
AZL
MVP
Growth
Index
Strategy
Fund
6
See
accompanying
notes
to
the
financial
statements.
Statements
of
Changes
in
Net
Assets
For
the
Year
Ended
December
31,
2023
For
the
Year
Ended
December
31,
2022
Change
In
Net
Assets:
Operations:
Net
investment
income/(loss)
$
29,651,237
$
28,875,659
Net
realized
gains/(losses)
on
investments
70,356,646
190,216,983
Change
in
unrealized
appreciation/depreciation
on
investments
207,303,551
(
608,819,725
)
Change
in
net
assets
resulting
from
operations
307,311,434
(
389,727,083
)
Distributions
to
Shareholders:
Distributions
(
76,260,325
)
(
229,168,242
)
Change
in
net
assets
resulting
from
distributions
to
shareholders
(
76,260,325
)
(
229,168,242
)
Capital
Transactions:
Proceeds
from
shares
issued
3,930,389
4,917,148
Proceeds
from
dividends
reinvested
76,260,325
229,168,242
Value
of
shares
redeemed
(
293,901,444
)
(
274,271,436
)
Change
in
net
assets
resulting
from
capital
transactions
(
213,710,730
)
(
40,186,046
)
Change
in
net
assets
17,340,379
(
659,081,371
)
Net
Assets:
Beginning
of
period
1,982,487,217
2,641,568,588
End
of
period
$
1,999,827,596
$
1,982,487,217
Share
Transactions:
Shares
issued
296,153
320,462
Dividends
reinvested
6,095,949
19,002,342
Shares
redeemed
(
22,166,575
)
(
19,312,786
)
Change
in
shares
(
15,774,473
)
10,018
AZL
MVP
Growth
Index
Strategy
Fund
Financial
Highlights
(Selected
data
for
a
share
of
beneficial
interest
outstanding
throughout
the
periods
indicated.
Does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.)
7
See
accompanying
notes
to
the
financial
statements.
Year
Ended
December
31,
2023
Year
Ended
December
31,
2022
Year
Ended
December
31,
2021
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Net
Asset
Value,
Beginning
of
Period
$12.50
$16.66
$15.77
$16.02
$13.99
Investment
Activities:
Net
Investment
Income/(Loss)(a)
0
.20
0
.19
0
.14
0
.26
0
.26
Net
Realized
and
Unrealized
Gains/(Losses)
on
Investments
1
.84
(
2
.76
)
2
.36
0
.42
2
.55
Total
from
Investment
Activities
2
.04
(
2
.57
)
2
.50
0
.68
2
.81
Distributions
to
Shareholders
From:
Net
Investment
Income
(
0
.27
)
(
0
.26
)
(
0
.30
)
(
0
.29
)
(
0
.35
)
Net
Realized
Gains
(
0
.27
)
(
1
.33
)
(
1
.31
)
(
0
.64
)
(
0
.43
)
Total
Dividends
(
0
.54
)
(
1
.59
)
(
1
.61
)
(
0
.93
)
(
0
.78
)
Net
Asset
Value,
End
of
Period
$14.00
$12.50
$16.66
$15.77
$16.02
Total
Return
(b)
16.81
%
(
15.10
)
%
16.40
%
4
.73
%
20.52
%
Ratios
to
Average
Net
Assets/Supplemental
Data:
Net
Assets,
End
of
Period
(000's)
$1,999,828
$1,982,487
$2,641,569
$2,578,042
$2,722,348
Net
Investment
Income/(Loss)
1
.50
%
1
.32
%
0
.82
%
1
.76
%
1
.67
%
Expenses
Before
Reductions*(c)
0
.12
%
0
.12
%
0
.12
%
0
.12
%
0
.12
%
Expenses
Net
of
Reductions*
0
.12
%
0
.12
%
0
.12
%
0
.12
%
0
.12
%
Portfolio
Turnover
Rate
4
%
10
%
6
%
12
%
5
%
*
The
expense
ratios
exclude
the
impact
of
fees/expenses
paid
by
each
underlying
fund.
(a)
Calculated
using
the
average
shares
method.
(b)
The
returns
include
reinvested
dividends
and
fund
level
expenses,
but
exclude
insurance
contract
charges. If
these
charges
were
included,
the
returns
would
have
been
lower.
(c)
Excludes
fee
reductions. If
such
fee
reductions
had
not
occurred,
the
ratios
would
have
been
as
indicated.
AZL
MVP
Growth
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
8
1.
Organization
The
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”)
was
organized
as
a
Delaware
statutory
trust
on
June
16,
2004.
The
Trust
is
an
open-end
management
investment
company
registered
under
the
Investment
Company
Act
of
1940,
as
amended,
(the
“1940
Act”)
and
thus
is
determined
to
be
an
investment
company,
and
follows
the
investment
company
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946
“Financial
Services—Investment
Companies”.
The
Trust
consists
of 9
separate
investment
portfolios
(collectively,
the
“Funds”),
of
which
one
is
included
in
this
report,
the
AZL
MVP
Growth
Index
Strategy
Fund (the
“Fund”),
and 8
are
presented
in
separate
reports.
The
Fund
is
a
diversified
series
of
the
Trust.
The
Fund
is
a
“fund
of
funds”,
which
means
that
the
Fund
invests
primarily
in
other
mutual
funds
(the
"Underlying
Funds").
Underlying
Funds
invest
in
stocks,
bonds,
and
other
securities
and
reflect
varying
amounts
of
potential
investment
risk
and
reward.
The
Underlying
Funds
record
their
investments
at
fair
value.
Periodically,
the
Fund
will
adjust
its
asset
allocation
as
it
seeks
to
achieve
its
investment
objective.
The
Trust
is
authorized
to
issue
an
unlimited
number
of
shares
of
the
Fund
without
par
value.
Shares
of
the
Fund
are
available
through
the
variable
annuity
contracts
offered
through
the
separate
accounts
of
participating
insurance
companies.
Currently,
the
Fund
only
offers
its
shares
to
separate
accounts
of
Allianz
Life
Insurance
Company
of
North
America
and
Allianz
Life
Insurance
Company
of
New
York,
affiliates
of
the
Trust
and
the
Manager,
as
defined
below.
Under
the
Trust’s
organizational
documents,
its
officers
and
trustees
are
indemnified
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
In
addition,
in
the
normal
course
of
business,
the
Fund
may
enter
into
contracts
with
its
vendors
and
others
that
provide
for
general
indemnifications.
The
Fund’s
maximum
exposure
under
these
arrangements
is
unknown,
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund.
However,
based
on
experience,
the
Fund
expects
that
risk
of
loss
to
be
remote.
2.
Significant
Accounting
Policies
The
following
is
a
summary
of
significant
accounting
policies
followed
by
the
Fund
in
the
preparation
of
its
financial
statements.
The
policies
conform
with
U.S.
generally
accepted
accounting
principles
(“U.S.
GAAP”).
The
preparation
of
financial
statements
requires
management
to
make
certain
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
and
disclosure
of
contingent
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
Security
Valuation
The
Fund
records
its
investments
at
fair
value.
Fair
value
is
defined
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
willing
market
participants
at
the
measurement
date.
The
valuation
techniques
used
to
determine
fair
value
are
further
described
in
Note
4
below.
Investment
Transactions
and
Investment
Income
Investment
transactions
are
accounted
for
on
trade
date.
Net
realized
gains
and
losses
on
investments
sold
and
on
foreign
currency
transactions
are
recorded
on
the
basis
of
identified
cost.
Interest
income
is
recorded
on
the
accrual
basis
and
includes,
where
applicable,
the
amortization
of
premiums
or
accretion
of
discounts.
Dividend
income
is
recorded
on
the
ex-
dividend
date
except
in
the
case
of
foreign
securities,
in
which
case
dividends
are
recorded
as
soon
as
such
information
becomes
available.
Distributions
to
Shareholders
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
The
Fund
distributes
its
dividends
from
net
investment
income
and
net
realized
capital
gains,
if
any,
on
an
annual
basis.
The
amount
of
distributions
from
net
investment
income
and
from
net
realized
gains
is
determined
in
accordance
with
federal
income
tax
regulations,
which
may
differ
from
U.S.
GAAP.
These
“book/tax”
differences
are
either
temporary
or
permanent
in
nature.
To
the
extent
these
differences
are
permanent
in
nature
(e.g.,
return
of
capital,
net
operating
loss,
reclassification
of
certain
market
discounts,
gain/loss,
paydowns,
and
distributions),
such
amounts
are
reclassified
within
the
composition
of
net
assets
based
on
their
federal
tax-basis
treatment;
temporary
differences
(e.g.,
wash
sales
and
differing
treatment
on
certain
investments)
do
not
require
reclassification.
Distributions
to
shareholders
that
exceed
net
investment
income
and
net
realized
gains
for
tax
purposes
are
reported
as
distributions
of
capital.
Expense
Allocation
Expenses
directly
attributable
to
the
Fund
are
charged
directly
to
the
Fund,
while
expenses
attributable
to
more
than
one
Fund
are
allocated
among
the
respective
Funds
based
upon
relative
net
assets
or
some
other
reasonable
method.
Expenses
which
are
attributable
to
more
than
one
Trust
are
allocated
across
the
Allianz
Variable
Insurance
Products
Trust,
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
AIM
ETF
Products
Trust
based
upon
relative
net
assets
or
another
reasonable
basis.
Allianz
Investment
Management
LLC
(the
“Manager”),
serves
as
the
investment
manager
for
the
Trust,
Allianz
Variable
Insurance
Products
Trust
and
AIM
ETF
Products
Trust.
This
report
does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.
Affiliated
Securities
Transactions
Pursuant
to
Rule
17a-7
under
the
1940
Act,
the
Fund
may
engage
in
securities
transactions
with
affiliated
investment
companies
and
advisory
accounts
managed
by
the
Manager.
Any
such
purchase
or
sale
transaction
must
be
effected
without
a
brokerage
commission
or
other
remuneration,
except
for
customary
transfer
fees.
The
transaction
must
be
effected
at
the
current
market
price,
which
is
either
the
security’s
last
sale
price
on
an
exchange
or,
if
there
are
no
transactions
in
the
security
that
day,
at
the
average
of
the
highest
bid
and
lowest
asked
price.
During
the
year
ended
December
31,
2023,
the
Fund
did
not
engage
in
any
Rule
17a-7
transactions.
AZL
MVP
Growth
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
9
Derivative
Instruments
All
open
derivative
positions
at
period
end
are
reflected
on
the
Fund’s
Schedule
of
Portfolio
Investments.
The
following
is
a
description
of
the
derivative
instruments
utilized
by
the
Fund,
including
the
primary
underlying
risk
exposures
related
to
each
instrument
type.
The
Fund’s
allocation
to
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process
may
include
(a)
derivatives
such
as
index
futures,
other
futures
contracts,
options,
and
other
similar
securities
and
(b)
cash,
money
market
equivalents,
short-term
debt
instruments,
money
market
funds,
and
short-term
debt
funds
to
satisfy
all
applicable
margin
requirements
and
to
provide
additional
portfolio
liquidity
to
satisfy
large
redemptions
and
any
margin
calls.
Due
to
the
leverage
provided
by
derivatives,
the
notional
value
of
the
Fund’s
derivative
positions
could
exceed
20%
of
the
Fund’s
value.
The
Fund
may
also
use
futures
to
gain
equity
exposure
and
may
hold
cash
as
a
buffer
in
the
event
of
market
shocks.
Futures
Contracts
During
the
year
ended
December
31,
2023,
the
Fund
invested
in
futures
contracts
to
reduce
volatility
and
limit
the
need
to
decrease
or
increase
allocations
to
underlying
funds.
Futures
contracts
are
valued
based
upon
their
quoted
daily
settlement
prices.
Upon
entering
into
a
futures
contract,
the
Fund
is
required
to
segregate
liquid
assets
in
accordance
with
the
initial
margin
requirements
of
the
broker
or
exchange.
Futures
contracts
are
marked
to
market
daily
and
a
payable
or
receivable
for
the
change
in
value
(“variation
margin”),
if
any,
is
recorded
by
the
Fund.
Gains
or
losses
are
recognized
but
not
considered
realized
until
the
contracts
expire
or
are
closed.
Futures
contracts
involve,
to
varying
degrees,
elements
of
market
risk
(generally
equity
price
risk
related
to
stock
futures,
interest
rate
risk
related
to
bond
futures,
and
foreign
currency
risk
related
to
currency
futures)
and
exposure
to
loss
in
excess
of
the
variation
margin
disclosed
in
the
Statement
of
Assets
and
Liabilities.
The
primary
risks
associated
with
the
use
of
futures
contracts
are
the
imperfect
correlation
between
the
change
in
value
of
the
underlying
securities
and
the
prices
of
futures
contracts,
the
possibility
of
an
illiquid
market,
and
the
inability
of
the
counterparty
to
meet
the
terms
of
the
contract.
For
the
year
ended
December
31,
2023,
the
monthly
average
notional
amount
for
long
contracts
was
$98.4
million.
There
was
no
short
contract
activity
during
the
period.
Realized
gains
and
losses
are
reported
as
“Net
realized
gains/(losses)
on
futures
contracts”
on
the
Statement
of
Operations.
Summary
of
Derivative
Instruments
The
following
is
a
summary
of
the
values
of
derivative
instruments
on
the
Fund’s
Statement
of
Assets
and
Liabilities,
categorized
by
risk
exposure,
as
of
December
31,
2023:
The
following
is
a
summary
of
the
effect
of
derivative
instruments
on
the
Statement
of
Operations,
categorized
by
risk
exposure,
for
the
year
ended
December
31,
2023:
3.
Fees
and
Transactions
with
Affiliates
and
Other
Parties
The
Manager
provides
investment
advisory
and
management
services
for
the
Fund.
The
Manager
has
contractually
agreed
to
waive
fees
and
reimburse
the
Fund
to
limit
the
annual
expenses,
excluding
interest
expense
(e.g.,
cash
overdraft
fees),
taxes,
brokerage
commissions,
acquired
fund
fees
and
expenses,
other
expenditures
that
are
capitalized
in
accordance
with
U.S.
GAAP
and
other
extraordinary
expenses
not
incurred
in
the
ordinary
course
of
the
Fund’s
business,
based
on
the
daily
net
assets
of
the
Fund,
through
April
30,
2025.
Expenses
incurred
for
investment
advisory
and
management
services
are
reflected
on
the
Statement
of
Operations
as
“Management
fees.”
For
the
year
ended
December
31,
2023,
the
annual
rate
due
to
the
Manager
and
the
annual
expense
limit
were
as
follows:
Any
amounts
contractually
waived
or remitted
to
the
Fund by
the
Manager
with
respect
to
the
annual
expense
limit
in
a
particular
fiscal
year
may
be
reimbursed
by
the
Fund
to
the
Manager,
provided
that
such
reimbursement
will
not
cause
the
Fund
to
exceed
the
lesser
of
any
applicable
expense
limit
in
effect
(i)
at
the
time
of
the
original
waiver
or
payment
and
(ii)
at
the
time
of
such
reimbursement,
as
supported
by
standard accounting
practices.
Such
reimbursement
only
applies
to
amounts
waived
or
paid
by
the
Manager
within
the
three
years
prior
to
the
date
of
such
reimbursement,
calculated
monthly
from
when
the
waiver
or
payment
was
recorded.
Any
amounts
recouped
by
the
Manager
during
the
period
are
reflected
on
the
Statement
of
Operations
as
“Recoupment
of
prior
expenses
reimbursed
by
the
Manager.”
At
December
31,
2023,
there
were
no
remaining
contractual
reimbursements
subject
to
repayment
by
the
Fund
in
subsequent
years,
and
no
commitment
or
contingent
liability
is
expected.
Asset
Derivatives
Liability
Derivatives
Primary
Risk
Exposure
Statement
of
Assets
and
Liabilities
Location
Total
Value
Statement
of
Assets
and
Liabilities
Location
Total
Value
Equity
Risk
2,451,067
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$2,451,067
Payable
for
variation
margin
on
futures
contracts*
$—
Interest
Rate
Risk
–
769,252
–
–
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$769,252
Payable
for
variation
margin
on
futures
contracts*
$
—
*
For
futures
contracts,
the
amounts
represent
the
cumulative
appreciation/depreciation
of
these
futures
contracts
as
reported
in
the
Schedule
of
Portfolio
Investments.
Only
the
current
day's
variation
margin,
if
any,
is
reported
within
the
Statement
of
Assets
and
Liabilities
as
Variation
margin
on
futures
contracts.
Primary
Risk
Exposure
Location
of
Gains/(Losses)
on
Derivatives
Recognized
Realized
Gains/(Losses)
on
Derivatives
Recognized
Change
in
Net
Unrealized
Appreciation/Depreciation
on
Derivatives
Recognized
Equity
Risk
(6,153,793)
(2,450,918)
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$
6,153,793
$
2,450,918
Interest
Rate
Risk
1,351,587
(1,057,480)
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$(1,351,587)
$1,057,480
Annual
Rate
Annual
Expense
Limit
AZL
MVP
Growth
Index
Strategy
Fund
0.10%
0.20%
AZL
MVP
Growth
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
10
Management
fees,
which
the
Manager
may
waive
in
order
to
maintain
more
competitive
expense
ratios,
are
not
subject
to
repayment
in
subsequent
years.
Information
on
the
total
amount
waived/reimbursed
by
the
Manager
or
repaid
to
the
Manager
by
the
Fund
during
the
period
can
be
found
on
the
Statement
of
Operations,
as
applicable.
During
the
year
ended
December
31,
2023,
there
were
no
such
waivers.
The
Manager
serves
as
the
investment
adviser
of the
underlying
funds
in
which
the
Fund
invests.
At
December
31,
2023,
these
underlying
funds
are
noted
as
Affiliated
Investment
Companies
in
the
Fund’s
Schedule
of
Portfolio
Investments.
Additional
information,
including
financial
statements,
about
these
Funds
is
available
at
www.allianzlife.com.
The
Manager
is
paid
a
separate
fee
from
the
underlying
funds
for
such
services.
A
summary
of
the
Fund’s
investments
in
affiliated
investment
companies
for
the
year
ended
December
31,
2023
is
as
follows:
Pursuant
to
separate
agreements
between
the
Trust
and
the
Manager,
the
Manager
provides
a
Chief
Compliance
Officer
(“CCO”)
and
certain
compliance
oversight
and
regulatory
filing
services
to
the
Trust.
Under
these
agreements,
the
Manager
is
entitled
to
an
amount
equal
to
a
portion
of
the
compensation
and
certain
other
expenses
related
to
the
individuals
performing
the
CCO
and
compliance
oversight
services,
as
well
as
$100
per
hour
for
time
incurred
in
connection
with
the
preparation
and
filing
of
certain
documents
with
the
SEC.
The
fees
are
paid
to
the
Manager
on
a
quarterly
basis.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administrative
and
compliance
services
fees.”
Citi
Fund
Services
Ohio,
Inc.
(“Citi”
or
the
“Administrator”),
a
wholly
owned
subsidiary
of
Citigroup,
Inc.,
with
which
an
officer
of
the
Trust
is
affiliated,
serves
as
the
Trust’s
administrator
and
fund
accountant,
and
assists
the
Trust
in
all
aspects
of
its
administration
and
operation.
The
Administrator
is
entitled
to
a
fee,
accrued
daily
and
paid
monthly.
The
Administrator
is
entitled
to
an
annual
fee
for
each
additional
class
of
shares
of
any
Fund,
certain
annual
fees
in
supporting
fair
value
services,
and
a
Trust-wide
annual
fee
for
providing
infrastructure
and
support
in
implementing
the
written
policies
and
procedures
comprising
the
Fund’s
compliance
program.
The
Administrator
is
also
reimbursed
for
certain
expenses
incurred.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administration
fees.”
FIS
Investor
Services
LLC
(“FIS”)
serves
as
the
Fund's
transfer
agent.
Under
the
Transfer
Agent
Agreement,
the
Trust
pays
FIS
a
fee
for
its
services
and
reimburses
FIS
for
all
of
their
reasonable
out-of-pocket
expenses
incurred
in
providing
these
services.
The
Bank
of
New
York
Mellon
(“BNY
Mellon”
or
the
“Custodian”)
serves
as
the
Trust’s
custodian.
For
these
services
as
custodian,
the
Funds
pay
BNY
Mellon
a
fee
based
on
a
percentage
of
assets
held
on
behalf
of
the
Funds,
plus
certain
out-of-pocket
charges.
Allianz
Life
Financial
Services,
LLC
(“ALFS”),
an
affiliate
of
the
Manager,
serves
as
distributor
of
the
Fund.
ALFS
receives
an
annual
Trust-wide
annual
fee
of
$7,500,
paid
by
the
Manager
from
its
profits
and
not
by
the
Trust,
for
recordkeeping
and
reporting
services.
Certain
Officers
and
Trustees
of
the
Trust
are
affiliated
with
the
Manager
or
the
Administrator.
Such
Officers
(except
for
the
Trust’s
CCO
as
noted
above)
and
Trustees
receive
no
compensation
from
the
Trust
for
serving
in
their
respective
roles.
4.
Investment
Valuation
Summary
The
valuation
techniques
employed
by
the
Fund,
as
described
below,
maximize
the
use
of
observable
inputs
and
minimize
the
use
of
unobservable
inputs
in
determining
fair
value.
The
inputs
used
for
valuing
the
Fund’s
investments
are
summarized
in
the
three
broad
levels
listed
below:
•
Level
1
-
quoted
prices
in
active
markets
for
identical
assets
•
Level
2
-
other
significant
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayments
speeds,
credit
risk,
etc.)
•
Level
3
-
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
investments)
Changes
in
valuation
techniques
may
result
in
transfers
in
or
out
of
an
assigned
level
within
the
disclosure
hierarchy.
The
inputs
or
methodology
used
for
valuing
investments
is
not
necessarily
an
indication
of
the
risk
associated
with
investing
in
those
investments.
Investments
in
other
investment
companies
are
valued
at
their
published
net
asset
value
(“NAV”).
Security
prices
are
determined
pursuant
to
valuation
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
“Board”
or
“Trustees”)
as
of
the
close
of
the
New
York
Stock
Exchange
(“NYSE”)
(generally
4:00
pm
Eastern
Time).
The
investments
utilizing
Level
1
valuations
represent
investments
in
open-end
investment
companies.
Futures
contracts
are
valued
at
the
settlement
prices
established
each
day
on
the
primary
exchange
and
are
typically
categorized
as
Level
1
in
the
fair
value
hierarchy.
Value
12/31/22
Purchases
at
Cost
Proceeds
from
Sales
Net
Realized
Gains
(Losses)
Change
in
Net
Unrealized
Appreciation
(Depreciation)
Value
12/31/23
Shares
as
of
12/31/23
Dividend
Income
Net
Realized
Gains
Distributions
from
Affiliated
Underlying
Funds
AZL
Enhanced
Bond
Index
Fund
$
464,001,120
$
9,587,488
$
(21,456,953)
$
(5,344,926)
$
21,549,826
$
468,336,555
47,692,114
$
7,593,802
$
—
AZL
International
Index
Fund,
Class
2
379,557,841
9,064,611
(56,905,823)
5,124,036
47,109,315
383,949,980
22,015,481
9,064,612
—
AZL
Mid
Cap
Index
Fund,
Class
2
216,973,253
8,875,761
(28,920,507)
1,590,330
22,662,137
221,180,974
10,413,417
1,595,918
7,279,844
AZL
S&P
500
Index
Fund,
Class
2
704,027,251
34,701,685
(151,057,868)
24,965,631
103,543,852
716,180,551
35,507,216
8,450,914
26,
260,414
AZL
Small
Cap
Stock
Index
Fund,
Class
2
104,857,311
7,220,012
(9,237,561)
(419,670)
8,930,023
111,350,115
9,097,232
1,121,231
6,098,781
$
1,869,416,776
$
69,449,557
$
(267,578,712)
$
25,915,401
$
203,795,153
$
1,900,998,175
124,725,4
60
$
27,826,477
$
39,6
3
9,
039
AZL
MVP
Growth
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
11
The
Board
has
designated
the
Manager
to
perform
the
Fund’s
fair
value
determinations
in
accordance
with
valuation
procedures
approved
by
the
Board.
The
effect
of
using
fair
value
pricing
is
that
the
Fund’s
NAV
will
be
subject
to
the
judgment
of
the
Manager.
The
Manager’s
fair
valuation
process
is
subject
to
the
oversight
of
the
Board.
The
following
is
a
summary
of
the
valuation
inputs
used
as
of
December
31,
2023
in
valuing
the
Fund’s
investments
based
upon
the
three
levels
defined
above:
5.
Security
Purchases
and
Sales
For
the
year
ended
December
31,
2023,
cost
of
purchases
and
proceeds
from
sales
of
securities
(excluding
securities
maturing
less
than
one
year
from
acquisition)
were
as
follows:
6.
Investment
Risks
The
risks
below
are
presented
in
an
order
intended
to
facilitate
readability.
Their
order
does
not
imply
that
the
realization
of
one
risk
is
more
likely
to
occur
more
frequently
than
another
risk,
nor
does
it
imply
that
the
realization
of
one
risk
is
likely
to
have
a
greater
adverse
impact
than
another
risk.
The
Fund
may
be
subject
to
other
risks
in
addition
to
these
identified
risks.
This
section
discusses
certain
common
principal
risks
encountered
by
the
Fund.
Derivatives
Risk:
The
Fund
may
invest
directly
or
through
affiliated
or
unaffiliated
mutual
funds
in
derivative
instruments
such
as
futures,
options,
and
options
on
futures.
A
derivative
is
a
financial
contract
whose
value
depends
on,
or
is
derived
from,
the
value
of
an
underlying
asset,
reference
rate,
or
risk.
Use
of
derivative
instruments
involves
risks
different
from,
or
possibly
greater
than,
the
risks
associated
with
investing
directly
in
securities
and
other
traditional
investments.
Derivatives
are
subject
to
a
number
of
other
risks,
such
as
liquidity
risk,
interest
rate
risk,
market
risk,
credit
risk,
and
selection
risk.
Derivatives
also
involve
the
risk
of
mispricing
or
improper
valuation
and
the
risk
that
changes
in
the
value
may
not
correlate
perfectly
with
the
underlying
asset,
rate,
or
index.
Using
derivatives
may
result
in
losses,
possibly
in
excess
of
the
principal
amount
invested.
Also,
suitable
derivative
transactions
may
not
be
available
in
all
circumstances.
The
other
party
to
a
derivatives
contract
could
default.
Foreign
Securities
Risk:
Investing
in
the
securities
of
non-U.S.
issuers
involves
a
number
of
risks,
such
as
fluctuations
in
currency
values,
adverse
political,
social
or
economic
developments,
and
differences
in
social
and
economic
developments
or
policies.
Such
risks
include
future
political
and
economic
developments,
and
the
possible
imposition
of
exchange
controls
or
other
foreign
governmental
laws
and
restrictions.
In
addition,
with
respect
to
certain
countries,
there
is
the
possibility
of
expropriation
of
assets,
confiscatory
taxation,
political
or
social
instability
or
diplomatic
developments
which
could
adversely
affect
investments
in
those
securities.
Certain
foreign
companies
may
be
subject
to
sanctions,
embargoes,
or
other
governmental
actions
that
may
impair
or
otherwise
limit
the
ability
to
invest
in,
receive,
hold
or
sell
the
securities
of
such
companies.
Fund
of
Fund
Risk:
The
Fund,
as
a
shareholder
of
the
underlying
funds,
indirectly
bears
its
proportionate
share
of
any
investment
management
fees
and
other
expenses
of
the
underlying
funds.
Further
due
to
the
fees
and
expenses
paid
by
the
Fund,
as
well
as
small
variations
in
the
Fund’s
actual
allocations
to
the
underlying
funds
and
any
futures
and
cash
held
in
the
Fund’s
portfolio,
the
performance
and
income
distributions
of
the
Fund
will
not
be
the
same
as
the
performance
and
income
distributions
of
the
underlying
funds.
In
addition,
the
Fund
maintains
indirect
exposure
to
various
types
of
risk
which
may
exist
in
the
underlying
Funds,
such
as
foreign
securities
risk,
fixed
income
securities
risk
and
other
risks.
Interest
Rate
Risk:
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
The
price
of
a
bond
is
also
affected
by
its
maturity.
Bonds
with
longer
maturities
generally
have
greater
sensitivity
to
changes
in
interest
rates.
Market
Risk
:
The
market
price
of
securities
owned
by
the
underlying
funds
may
go
up
or
down,
sometimes
rapidly
and
unpredictably.
Securities
may
decline
in
value
due
to
factors
affecting
securities
markets
generally
or
particular
industries
represented
in
the
securities
markets.
The
value
of
a
security
may
decline
due
to
general
market
conditions,
economic
trends
or
events that
are
not
specifically
related
to
a
particular
company,
such
as
real
or
perceived
adverse
economic
conditions,
inflation,
recessions, changes
in
the
general
outlook
for
corporate
earnings,
changes
in
interest
or
currency
rates,
or
adverse
investor
sentiment,
as
well
as
natural
disasters,
and
outbreaks
of
infectious
illnesses
or
other
widespread
public
health
issues.
Quantitative
Investing
Risk:
The
value
of
securities
selected
using
quantitative
analysis
can
react
differently
to
issuer,
political,
market,
and
economic
developments
than
the
market
as
a
whole
or
securities
selected
using
only
fundamental
analysis.
The
factors
used
in
quantitative
analysis
and
the
weight
placed
on
those
factors
may
not
be
predictive
of
a
security's
value.
In
addition,
factors
that
affect
a
security's
value
can
change
over
time
and
these
changes
may
not
be
reflected
in
the
quantitative
model.
A
quantitative
model
can
be
adversely
affected
by
errors
or
imperfections
in
the
factors
or
the
data
on
which
evaluations
are
based,
or
by
technical
issues
with
construction
or
implementation
of
the
model,
which
in
any
case
may
result
in
a
failure
of
the
portfolio
to
perform
as
expected
or
a
failure
to
identify
securities
that
will
perform
well
in
the
future.
Investment
Securities:
Level
1
Level
2
Level
3
Total
Affiliated
Investment
Companies
$
1,900,998,175
$
—
$
—
$
1,900,998,175
Total
Investment
Securities
1,900,998,175
—
—
1,900,998,175
Other
Financial
Instruments:
*
Futures
Contracts
3,220,319
—
—
3,220,319
Total
Investments
$1,904,218,494
$—
$—
$1,904,218,494
*
Other
Financial
Instruments
would
include
any
derivative
instruments,
such
as
futures
contracts. These
investments
are
generally
presented
in
the
Statement
of
Assets
and
Liabilities
at
variation
margin.
Purchases
Sales
AZL
MVP
Growth
Index
Strategy
Fund
$69,449,557
$267,578,712
AZL
MVP
Growth
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
12
7.
Federal
Tax
Information
It
is
the
policy
of
the
Fund
to
continue
to
qualify
as
a
regulated
investment
company
by
complying
with
the
provisions
available
to
certain
investment
companies,
as
defined
under
Subchapter
M
of
the
Internal
Revenue
Code,
and
to
make
distributions
of
net
investment
income
and
net
realized
gains
sufficient
to
relieve
it
from
all,
or
substantially
all,
federal
income
taxes.
Accordingly,
no
provisions
for
federal
income
taxes
are
required
in
the
financial
statements.
Management
of
the
Fund
has
reviewed
tax
positions
taken
in
tax
years
that
remain
subject
to
examination
by
all
major
tax
jurisdictions,
including
federal
(i.e.,
the
last
four
tax
year
ends
and
the
interim
tax
period
since
then,
as
applicable).
Management
believes
that
there
is
no
tax
liability
resulting
from
unrecognized
tax
benefits
related
to
uncertain
tax
positions
taken.
Cost
of
securities,
including
derivatives
and
short
positions
as
applicable,
for
federal
income
tax
purposes
at
December
31,
2023
was
$1,576,499,257.
The
gross
unrealized
appreciation/(depreciation)
on
a
tax
basis
was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2023, was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2022, was
as
follows:
At
December
31,
2023,
the
components
of
accumulated
earnings
on
a
tax
basis
were
as
follows:
8.
Ownership
and
Principal
Holders
The
beneficial
ownership,
either
directly
or
indirectly,
of
more
than
25%
of
the
voting
securities
of
a
fund
creates
presumptions
of
control
of
the
fund,
under
section
2
(a)(9)
of
the
1940
Act.
As
of
December
31,
2023,
the
Fund
had
an
individual
shareholder
account
which
is
affiliated
with
the
Manager
representing
ownership
in
excess
of
85%
of
the
Fund.
Investment
activities
of
this
shareholder
could
have
a
material
impact
to
the
Fund.
9.
Recent
Regulatory
Pronouncements
Effective
January
24,
2023,
the
SEC
adopted
rule
and
form
amendments
that
require
open-end
management
investment
companies
to
transmit
concise
and
visually
engaging
annual
and
semi-annual
reports
to
shareholders
that
highlight
key
information.
Other
information,
including
financial
statements,
will
no
longer
appear
in
a
tailored
shareholder
report
but
must
be
available
online,
delivered
free
of
charge
upon
request,
and
filed
on
a
semi-annual
basis
on
Form
N-CSR.
The
rule
and
form
amendments
have
a
compliance
date
of
July
24,
2024.
Accordingly,
the
rule
and
form
amendments
will
not
impact
the
Fund
until
the
2024
semi-annual
shareholder
report
and
will
have
no
effect
on
the
Fund’s
accounting
policies
or
financial
statements.
10.
Subsequent
Events
Management
of
the
Fund
has
evaluated
the
need
for
additional
disclosures
or
adjustments
resulting
from
events
through
the
date
the
financial
statements
were
issued.
Based
on
this
evaluation,
there
were
no
subsequent
events
to
report
that
would
have
material
impact
on
the
Fund’s
financial
statements.
Unrealized
appreciation
$372,046,790
Unrealized
(depreciation)
(47,547,872)
Net
unrealized
appreciation/(depreciation)
$324,498,918
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
Growth
Index
Strategy
Fund
$38,506,889
$37,753,436
$76,260,325
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
Growth
Index
Strategy
Fund
$121,454,400
$107,713,842
$229,168,242
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Undistributed
Ordinary
Income
Undistributed
Long-Term
Capital
Gains
Accumulated
Capital
and
Other
Losses
Unrealized
Appreciation/
Depreciation(a)
Total
Accumulated
Earnings/
(Deficit)
AZL
MVP
Growth
Index
Strategy
Fund
$63,325,588
$43,991,237
$—
$324,498,918
$431,815,743
(a)
The
differences
between
book-basis
and
tax-basis
unrealized
appreciation/(depreciation)
are
attributable
primarily
to
tax
deferral
of
losses
on
wash
sales,
mark-to-market
of
futures
contracts
and
straddles.
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
13
To
the
Board
of
Trustees
of
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
Shareholders
of
AZL
MVP
Growth
Index
Strategy
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
schedule
of
portfolio
investments,
of
AZL
MVP
Growth
Index
Strategy
Fund
(one
of
the
funds
constituting
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust,
referred
to
hereafter
as
the
"Fund")
as
of
December
31,
2023,
the
related
statement
of
operations
for
the
year
ended
December
31,
2023,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2023,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2023
by
correspondence
with
the
transfer
agent
and
brokers.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
/s/
PricewaterhouseCoopers
LLP
New
York,
New
York
February
22,
2024
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Allianz
Variable
Insurance
Products
complex
since
2018.
14
Other
Federal
Income
Tax
Information
(Unaudited)
For
the
year
ended
December
31,
2023,
50.59%
of
the
total
ordinary
income
dividends
paid
by
the
Fund
qualify
for
the
corporate
dividends
received
deductions
available
to
corporate
shareholders.
During
the
year
ended
December
31,
2023,
the
Fund
declared
net
long-term
capital
gain
distributions
of
$37,753,436.
15
Other
Information
(Unaudited)
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities
is
available,
without
charge,
upon
request,
by
visiting
the
Securities
and
Exchange
Commission’s
(‘‘Commission’’)
website
at
www.sec.gov,
or
by
calling
800-624-0197.
Information
regarding
how
the
Fund
voted
proxies
relating
to
portfolio
securities
during
the
most
recent
12-month
period
ended
June
30th
is
available
(i)
without
charge,
upon
request,
by
calling
800-624-0197;
(ii)
on
the
Trust’s
website
at
https://www.allianzlife.com;
and
(iii)
on
the
Commission’s
website
at
http://www.sec.gov
.
The
Fund
files
complete
Schedules
of
Portfolio
Holdings
with
the
Commission
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Schedules
of
Portfolio
Holdings
for
the
Fund
are
available
without
charge
on
the
Commission’s
website
at
http://www.sec.gov,
or
may
be
obtained
by
calling
800-624-0197.
16
Approval
of
Investment
Advisory
Agreement
(Unaudited)
Subject
to
the
general
supervision
of
the
Board
of
Trustees
(the
“Board”)
and
in
accordance
with
the
investment
objectives
and
restrictions
of
each
separate
series
(each
a
“Fund,”
together,
the
“Funds”)
of
the
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”),
investment
advisory
services
are
provided
to
the
Funds
by
Allianz
Investment
Management
LLC
(the
“Manager”).
The
Manager
manages
each
Fund
pursuant
to
an
investment
management
agreement
(the
“Management
Agreement”)
with
the
Trust
in
respect
of
each
such
Fund.
The
Management
Agreement
provides
that
the
Manager,
subject
to
the
supervision
and
approval
of
the
Board,
is
responsible
for
the
management
of
each
Fund.
For
management
services,
each
Fund
pays
the
Manager
an
investment
advisory
fee
based
upon
each
Fund’s
average
daily
net
assets.
The
Manager
has
contractually
agreed
to
limit
the
expenses
of
each
Fund
by
reimbursing
the
Fund
if
and
when
total
Fund
operating
expenses
exceed
certain
amounts
until
at
least
April
30,
2025
(the
“Expense
Limitation
Agreement”).
In
reviewing
the
services
provided
by
the
Manager
and
the
terms
of
the
Management
Agreement,
the
Board
receives
and
reviews
information
related
to
the
Manager’s
experience
and
expertise
in
the
variable
insurance
marketplace.
In
addition,
the
Board
receives
information
regarding
the
Manager’s
expertise
with
regard
to
portfolio
diversification
and
asset
allocation
requirements
within
variable
insurance
products
issued
by
Allianz
Life
Insurance
Company
of
North
America
(“Allianz
Life”)
and
its
subsidiary,
Allianz
Life
Insurance
Company
of
New
York
(“Allianz
of
New
York”).
Currently,
the
Funds
are
offered
only
through
Allianz
Life
and
Allianz
of
New
York
variable
products,
and
not
in
the
retail
fund
market.
As
required
by
the
Investment
Company
Act
of
1940
(the
“1940
Act”),
the
Board
has
reviewed
and
approved
the
Management
Agreement
with
the
Manager.
The
Board’s
decision
to
approve
this
contract
reflects
the
exercise
of
its
business
judgment
on
whether
to
approve
new
arrangements
and
continue
the
existing
arrangements.
During
its
review
of
the
contract,
the
Board
considered
many
factors,
among
the
most
material
of
which
are:
the
Fund’s
investment
objectives
and
long-term
performance;
the
Manager’s
management
philosophy,
personnel,
processes
and
investment
performance,
including
its
compliance
history
and
the
adequacy
of
its
compliance
processes;
the
preferences
and
expectations
of
Fund
shareholders
(and
underlying
contract
owners)
and
their
relative
sophistication;
the
continuing
state
of
competition
in
the
mutual
fund
industry;
and
comparable
fees
in
the
mutual
fund
industry.
The
Board
also
considered
the
compensation
and
benefits
received
by
the
Manager.
This
includes
fees
received
for
services
provided
to
a
Fund
by
employees
of
the
Manager
or
of
affiliates
of
the
Manager
and
research
services
received
by
the
Manager
from
brokers
that
execute
Fund
trades,
as
well
as
advisory
fees.
The
Board
considered
the
fact
that:
(1) the
Manager
and
the
Trust
are
parties
to
an
Administrative
Services
Agreement
and
a
Compliance
Services
Agreement,
under
which
the
Manager
is
compensated
by
the
Trust
for
performing
certain
administrative
and
compliance
services
including
providing
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer;
and
(2) Allianz
Life
Financial
Services,
LLC,
an
affiliated
person
of
the
Manager,
is
a
registered
securities
broker-dealer
and
received
(along
with
its
affiliated
persons)
payments
made
by
the
underlying
funds
pursuant
to
Rule 12b1.
The
Board
is
aware
that
various
courts
have
interpreted
provisions
of
the
1940
Act
and
have
indicated
in
their
decisions
that
the
following
factors
may
be
relevant
to
an
adviser’s
compensation:
the
nature,
extent
and
quality
of
the
services
provided
by
the
adviser,
including
the
performance
of
the
fund;
the
adviser’s
cost
of
providing
the
services;
the
extent
to
which
the
adviser
may
realize
“economies
of
scale”
as
the
fund
grows
larger;
any
indirect
benefits
that
may
accrue
to
the
adviser
and
its
affiliates
as
a
result
of
the
adviser’s
relationship
with
the
fund;
performance
and
expenses
of
comparable
funds;
the
profitability
of
acting
as
adviser
to
the
fund;
and
the
extent
to
which
the
independent
Board
members,
who
are
not
“interested
persons”
of
a
fund
as
defined
by
the
1940
Act
(“Independent
Trustees”),
are
fully
informed
about
all
facts
bearing
on
the
adviser’s
services
and
fees.
The
Board
is
aware
of
these
factors
and
takes
them
into
account
in
its
review
of
the
Management
Agreement
for
the
Funds.
Each
member
of
the
Board
considered
and
weighed
these
factors
in
light
of
his
or
her
experience
in
governing
the
Trust.
The
Board
is
assisted
in
its
deliberations
by
the
advice
of
independent
legal
counsel
to
the
Independent
Trustees
(“Independent
Trustee
Counsel”).
In
this
regard,
the
Board
requests
and
receives
a
significant
amount
of
information
about
the
Funds
and
the
Manager.
Some
of
this
information
is
provided
at
each
regular
meeting
of
the
Board;
additional
information
is
provided
in
connection
with
the
particular
meetings
at
which
the
Board’s
formal
review
of
the
Management
Agreement
occurs.
In
between
regularly
scheduled
meetings,
the
Board
may
receive
information
on
particular
matters
as
the
need
arises.
Thus,
the
Board’s
evaluation
of
the
Management
Agreement
is
informed
by
reports
covering
such
matters
as:
the
Manager’s
investment
philosophy,
personnel
and
processes,
and
the
Fund’s
investment
performance
(in
absolute
terms
as
well
as
in
relationship
to
its
benchmark
and
certain
competitor
or
“peer
group”
funds).
In
connection
with
comparing
the
performance
of
each
Fund
versus
its
benchmark,
the
Board
receives
reports
on
the
extent
to
which
the
Fund’s
performance
may
be
attributed
to
various
applicable
factors,
such
as
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
rebalancing
decisions,
and
the
impact
of
cash
positions
and
Fund
fees
and
expenses.
The
Board
also
receives
reports
on
the
Funds’
expenses
(including
the
advisory
fee
itself
and
the
overall
expense
structure
of
the
Funds,
both
in
absolute
terms
and
relative
to
peer
group
and/or
competing
funds,
with
due
regard
for
the
Expense
Limitation
Agreement
and
additional
voluntary
expense
limitations);
the
use
and
allocation
of
any
brokerage
commissions
derived
from
trading
the
Funds’
portfolio
securities;
the
nature,
extent
and
quality
of
the
advisory
and
other
services
provided
to
the
Fund
by
the
Manager
and
its
affiliates;
compliance
and
audit
reports
concerning
the
Funds
and
the
companies
that
service
them;
and
relevant
developments
in
the
mutual
fund
industry
and
how
the
Funds
and/or
the
Manager
are
responding
to
them.
The
Board
also
receives
financial
information
about
the
Manager,
including
reports
on
the
compensation
and
benefits
the
Manager
derives
from
its
relationships
with
the
Funds.
These
reports
cover
not
only
the
fees
under
the
Management
Agreement,
but
also
the
fees,
if
any,
received
for
providing
other
services
to
the
Funds.
The
reports
also
discuss
any
indirect
or
“fall-out”
benefits
the
Manager
or
its
affiliates
may
derive
from
their
relationships
with
the
Funds.
The
Management
Agreement
was
most
recently
considered
at
Board
meetings
held
in
the
summer
and
fall
of
2023.
Information
relevant
to
the
approval
of
the
Management
Agreement
was
considered
at
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
as
well
as
at
various
other
meetings
preceding
those
meetings.
Accordingly,
the
Management
Agreement
was
approved
by
the
Board
at
an
in-person
meeting
on
September
19,
2023.
At
such
meeting
the
Board
also
approved
the
Expense
Limitation
Agreement
between
the
Manager
and
the
Trust
for
the
period
ending
April 30,
2025.
In
connection
with
such
meetings,
the
Board
requested
and
evaluated
extensive
materials
from
the
Manager,
including
performance
and
expense
information
for
other
investment
companies
with
similar
investment
objectives
derived
from
data
compiled
by
an
independent
third-party
provider
and
other
sources
believed
to
be
reliable
by
the
Manager
and
the
Trustees.
Prior
to
voting,
the
Trustees
reviewed
the
proposed
approval
of
the
Management
Agreement
with
management
and
with
Independent
Trustee
Counsel
and
received
a
memorandum
from
such
counsel
discussing
the
legal
standards
for
their
consideration
of
the
proposed
approval.
The
Independent
Trustees
also
discussed
the
proposed
approval
in
private
sessions
with
Independent
Trustee
Counsel
at
which
no
representatives
of
the
Manager
were
present.
In
reaching
their
determinations
relating
to
the
approval
of
the
Management
Agreement,
in
respect
of
each
Fund,
each
member
of
the
Board
considered
all
factors
he
or
she
believed
relevant.
The
Board
based
its
decision
to
approve
17
the
Management
Agreement
on
the
totality
of
the
circumstances
and
relevant
factors,
and
with
a
view
to
past
and
future
long-term
considerations.
Not
all
of
the
factors
and
considerations
discussed
above
and
below
are
necessarily
relevant
to
every
Fund,
and
the
Board
did
not
assign
relative
weights
to
factors
discussed
herein
or
deem
any
one
or
group
of
them
to
be
controlling
in
and
of
themselves.
Shareholder
reports
must
include
a
discussion
of
certain
factors
relating
to
the
selection
of
the
investment
adviser
and
the
approval
of
the
advisory
fee.
The
“factors”
enumerated
by
the
SEC
are
set
forth
below
in
italics,
as
well
as
the
Board’s
conclusions
regarding
such
factors:
(1)
The
nature,
extent
and
quality
of
services
provided
by
the
Manager.
The
Trustees
noted
that
the
Manager,
subject
to
the
oversight
of
the
Board,
administers
each
Fund’s
business
and
other
affairs.
The
Trustees
noted
that
the
Manager
also
provides
the
Trust
and
each
Fund
with
such
administrative
and
other
services
(exclusive
of,
and
in
addition
to,
any
such
services
provided
by
any
other
service
providers
retained
by
the
Trust
on
behalf
of
the
Funds)
and
executive
and
other
personnel
as
are
necessary
for
the
operation
of
the
Trust
and
the
Funds.
Except
for
the
Trust’s
Chief
Compliance
Officer
and
certain
compliance
staff,
the
Manager
pays
all
of
the
compensation
of
Trustees
and
officers
of
the
Trust
who
are
employees
of
the
Manager
or
its
affiliates.
The
Board
considered
the
scope
and
quality
of
services
provided
by
the
Manager
and
noted
that
the
scope
of
the
services
provided
has
continued
to
expand
as
a
result
of
regulatory
and
other
developments.
The
Board
noted,
for
example,
that
the
Manager
is
responsible
for
maintaining
and
monitoring
its
own
compliance
program,
and
this
compliance
program
has
been
continuously
refined
and
enhanced
in
light
of
new
regulatory
requirements.
The
Board
considered
the
capabilities
and
resources
which
the
Manager
has
dedicated
to
performing
services
on
behalf
of
the
Trust
and
its
Funds.
The
quality
of
administrative
and
other
services,
including
the
Manager’s
role
in
coordinating
the
activities
of
the
Trust’s
other
service
providers,
also
were
considered.
The
Board
concluded
that,
overall,
they
were
satisfied
with
the
nature,
extent
and
quality
of
services
provided
(and
expected
to
be
provided)
to
the
Trust
and
to
each
of
the
Funds
under
the
Management
Agreement.
(2)
The
investment
performance
of
the
Funds
and
the
Manager.
In
connection
with
every
quarterly
Board
meeting
and
the
summer
and
fall
2023
contract
review
process,
Trustees
received
extensive
information
on
the
performance
results
of
each
Fund.
This
included,
for
example,
performance
information
on
absolute
total
return,
performance
versus
the
appropriate
benchmark(s)
and
performance
versus
peer
groups
as
reported
by
Lipper,
the
contribution
to
performance
of
the
Manager’s
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
and
the
impact
on
performance
of
rebalancing
decisions,
cash
and
Fund
fees.
This
included
Lipper
performance
information
on
the
Funds
for
the
previous
quarter,
and
previous
one-,
three-
and
five-year
periods,
to
the
extent
available.
For
example,
in
connection
with
the
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
the
Manager
reported
that,
for
the
five-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
reported
that
for
the
three-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
four
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
also
reported
on
the
performance
of
the
MVP
Funds
compared
to
custom
managed-volatility
peer
groups.
For
the
five-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
middle
20%
of
its
respective
custom
managed-volatility
peer
group.
For
the
three-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%
and
three
were
in
the
middle
20%
of
their
respective
custom
managed-volatility
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
bottom
40%
of
its
respective
custom
managed-volatility
peer
group.
The
Board
members
discussed
with
the
Manager
and
considered
the
impact
of
the
volatility
management
strategies
on
performance
in
different
market
environments,
where
applicable,
and
considered
whether
they
were
operating
as
intended.
The
Board
noted,
in
particular,
the
impact
on
longer-term
performance
of
certain
characteristics
of
the
Funds’
volatility
management
strategies
in
relation
to
volatility
experienced
as
a
result
of
the
COVID-19
pandemic,
and
that
relative
performance
had
improved
as
the
markets
stabilized.
At
the
Board
meeting
held
September
19,
2023,
the
Board
also
received
updated
performance
information
for
the
Funds,
including
updated
Lipper
peer
group
ranking
information,
for
various
periods
ending
June
30,
2023.
At
the
Board
meeting
held
September
19,
2023,
the
Trustees
determined
that
the
investment
performance
of
the
Funds
was
acceptable.
(3)
The
costs
of
services
to
be
provided
and
profits
to
be
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Funds.
The
Board
considered
that
the
Manager
receives
an
advisory
fee
from
each
of
the
Funds.
The
Manager
reported
that
for
the
four
MVP
Index
Strategy
Funds,
the
advisory
fee
paid
was
in
the
31st
percentile
of
the
customized
peer
group,
and
for
the
AZL
Balanced
Index
Strategy
Fund,
the
advisory
fee
paid
was
in
the
8th
percentile
of
the
customized
peer
group.
The
Manager
reported
that
for
the
AZL
DFA
Multi-Strategy
Fund,
the
advisory
fee
paid
was
in
the
6th
percentile.
The
Manager
reported
that
for
the
AZL
MVP
DFA
Multi-Strategy,
AZL
MVP
FIAM
Multi-Strategy,
and
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Funds,
the
advisory
fee
paid
was
in
the
1st
percentile.
(A
lower
percentile
reflects
lower
fund
fees
and
is
better
for
fund
shareholders.)
Trustees
were
provided
with
information
on
the
total
expense
ratios
of
the
Funds
and
other
funds
in
the
customized
peer
groups,
and
the
Manager
reported
upon
the
challenges
in
making
peer
group
comparisons
for
the
Funds.
The
Board
further
considered
and
found
that
the
advisory
fee
paid
to
the
Manager
with
respect
to
each
Fund
was
based
on
services
provided
to
the
Fund
that
were
in
addition
to,
rather
than
duplicative
of,
the
services
provided
pursuant
to
the
advisory
agreements
for
the
underlying
funds
in
which
the
Fund
invests.
The
Manager
provided
information
concerning
the
profitability
of
the
Manager’s
investment
advisory
activities
for
the
period
from
2020
through
2022.
The
Board
recognized
that
it
is
difficult
to
make
comparisons
of
profitability
from
investment
company
advisory
agreements
because
comparative
information
is
not
generally
publicly
available
and
is
affected
by
numerous
factors,
including
the
structure
of
the
particular
adviser,
the
types
of
funds
it
manages,
its
business
mix,
numerous
assumptions
regarding
allocation
of
expenses
and
the
adviser’s
capital
structure
and
cost
of
capital.
In
considering
profitability
information,
the
Board
considered
the
possible
effect
of
certain
fall-out
benefits
to
the
Manager
and
its
affiliates.
The
Board
focused
on
profitability
of
the
Manager’s
relationships
with
the
Funds
before
taxes
and
distribution
expenses.
The
Board
recognized
that
the
Manager
should
earn
a
reasonable
level
of
profits
for
the
services
it
provides
to
each
Fund.
(4)
and
(5)
The
extent
to
which
economies
of
scale
would
be
realized
as
the
Funds
grow,
and
whether
fee
levels
reflect
these
economies
of
scale.
The
Board
noted
that
the
advisory
fee
schedules
for
the
Funds
do
not
contain
breakpoints
that
reduce
the
fee
rate
on
assets
above
specified
levels.
The
Board
recognized
that
breakpoints
may
be
an
appropriate
way
for
the
Manager
to
share
its
economies
of
scale,
if
any,
with
Funds
that
have
substantial
assets.
The
Board
found
there
was
no
uniform
methodology
for
establishing
breakpoints
that
give
effect
to
Fund-specific
services
provided
by
the
Manager.
The
Board
noted
that
in
the
fund
industry
as
a
whole,
as
well
as
among
funds
similar
to
the
Funds,
there
is
no
uniformity
or
pattern
in
the
fees
and
asset
levels
at
which
breakpoints
(if
any)
apply.
Depending
on
the
age,
size,
and
other
characteristics
of
a
particular
fund
and
its
manager’s
cost
structure,
different
conclusions
can
be
drawn
as
to
whether
there
are
economies
of
scale
to
be
realized
at
any
particular
level
of
assets,
notwithstanding
the
intuitive
conclusion
that
such
economies
exist,
or
will
be
realized
at
some
level
of
total
assets.
Moreover,
because
different
managers
have
different
cost
structures
and
service
models,
it
is
difficult
to
draw
meaningful
18
conclusions
from
the
breakpoints
that
may
have
been
adopted
by
other
funds.
The
Board
also
noted
that
the
advisory
agreements
for
many
funds
do
not
have
breakpoints
at
all,
or
if
breakpoints
exist,
they
may
be
at
asset
levels
significantly
greater
than
those
of
the
individual
Funds.
The
Board
noted
that
the
total
assets
in
all
of
the
Funds,
as
of
June
30,
2023,
were
approximately
$7.8 billion
and
that
the
largest
Fund,
the
AZL
MVP
Growth
Index
Strategy
Fund,
had
assets
of
approximately
$2.0 billion.
The
Board
noted
that
the
Manager
has
agreed
to
temporarily
limit
Fund
expenses
under
the
Expense
Limitation
Agreement,
which
has
the
effect
of
reducing
expenses
similar
to
implementation
of
advisory
fee
breakpoints.
The
Manager
has
committed
to
continue
to
consider
the
continuation
of
expense
limits
and/or
advisory
fee
breakpoints
as
Fund
assets
change.
The
Board
receives
quarterly
reports
on
the
level
of
Fund
assets.
The
Board
expects
to
continue
to
consider:
(a) the
extent
to
which
economies
of
scale
have
been
realized,
and
(b) whether
the
advisory
fee
should
be
modified,
either
in
connection
with
the
next
renewal
of
the
Management
Agreement
or
by
modifying
the
Expense
Limitation
Agreement,
to
reflect
such
economies
of
scale,
if
any.
Having
taken
these
factors
into
account,
the
Board
concluded
that
the
absence
of
breakpoints
in
the
Funds’
advisory
fee
rate
schedules
was
acceptable
under
each
Fund’s
circumstances.
In
conclusion,
after
full
consideration
of
the
above
factors,
as
well
as
such
other
factors
as
each
member
of
the
Board
considered
instructive
in
evaluating
the
Management
Agreement,
the
Board
concluded
that
the
advisory
fees
were
reasonable,
and
that
the
continuation
of
the
Management
Agreement
was
in
the
best
interest
of
the
Funds.
19
Information
about
the
Board
of
Trustees
and
Officers
(Unaudited)
The
Trust
is
managed
by
the
Trustees
in
accordance
with
the
laws
of
the
state
of
Delaware
governing
business
trusts.
In
addition
to
serving
on
the
Board
of
Trustees
of
the
Trust,
each
Trustee
serves
on
the
Board
of
the
Allianz
Variable
Insurance
Products
Trust
(“VIP
Trust”)
and
the
AIM
ETF
Products
Trust
(“ETF
Trust”)
(collectively,
the
Trust,
the
VIP
Trust,
and
ETF
Trust
are
the
“AIM
Complex”).
There
are
currently
six
Trustees,
one
of
whom
is
an
“interested
person”
of
the
Trust
within
the
meaning
of
that
term
under
the
1940
Act.
The
Trustees
and
Officers
of
the
Trust,
their
addresses,
years
of
birth,
their
positions
held
with
the
Trust,
their
terms
of
office
with
the
Trust
and
length
of
time
served,
their
principal
occupation(s)
during
the
past
five
years,
the
number
of
portfolios
in
the
Trust
they
oversee,
and
their
other
directorships
held
during
the
past
five
years
are
as
follows:
Independent
Trustees
(
1)
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Peggy
L.
Ettestad
(1957)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Lead
Independent
Trustee
Since
10/14
(Trustee
since
2/07)
Managing
Director,
Red
Canoe
Management
Consulting
LLC,
2008
to
present
56
None
Tamara
Lynn
Fagely
(1958)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Chief
Operations
Officer,
Hartford
Funds,
2012
to
2013
56
Diamond
Hill
Funds
(10
Funds)
Richard
H.
Forde
(1953)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Member
of
the
Board
and
Chairman
of
the
Finance
and
Investment
Committee,
Connecticut
Water
Service,
Inc.,
2013
to
2019
56
Connecticut
Water
Service,
Inc.
Jack
Gee
(1959)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
01/22
Retired;
previously,
Managing
Director,
BlackRock,
Inc.,
Treasurer
and
Chief
Financial
Officer
U.S.
iShares,
2004
to
2019
56
TCW
ETF
Trust
(3
Funds);
Esoterica
Thematic
Trust
(2019
-
2020)
Claire
R.
Leonardi
(1955)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
02/04
Retired;
previously,
CEO,
Health
eSense
Inc.
(a
medical
device
company),
2015
to
2018,
and
Connecticut
Innovations,
Inc.
(a
venture
capital
firm),
2012
to
2015
56
None
20
Interested
Trustee
(
3)
(1)
Each
of
the
Independent
Trustees
is
a
member
of
the
Audit
and
Operational
Risk
Oversight
Committee.
(2)
Indefinite.
(3)
Is
an
“interested
person,”
as
defined
by
the
1940
Act,
due
to
employment
by
Allianz
Life
and
the
Manager.
Officers
(1)
Indefinite.
(2)
The
Manager
and
the
Trust
are
parties
to
a
Compliance
Services
Agreement
under
which
the
Manager
provides
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer.
The
Fund’s
Statement
of
Additional
Information
(“SAI”)
contains
additional
information
about
the
Trust’s
Trustees
and
Officers.
The
SAI
is
available
without
charge,
upon
request,
by
calling
toll-free
800-624-0197
or
at
https://www.allianzlife.com.
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
06/11
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
56
None
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(1)
/
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
President
Since
11/10
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
Amanda
Farren
(1978)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Secretary
Since
02/24
Chief
Legal
Officer,
Allianz
Investment
Management
LLC;
Senior
Counsel,
Allianz
Life,
January
2024
to
present;
Senior
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2023;
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2015
-2023
Bashir
C.
Asad
(1963)
Citi
Fund
Services
Ohio,
Inc.
4400
Easton
Commons,
Suite
200
Columbus,
OH
43219
Treasurer,
Principal
Accounting
Officer
and
Principal
Financial
Officer
Since
06/16
Senior
Vice
President,
Citi
Fund
Services
Ohio,
Inc.,
2011
to
present
Chris
R.
Pheiffer
(1968)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Chief
Compliance
Officer
(2)
and
Anti-Money
Laundering
Compliance
Officer
Since
02/14
Chief
Compliance
Officer
of
the
Trust
and
the
VIP
Trust,
2014
to
present,
and
the
ETF
Trust,
2020
to
present
Michael
Tanski
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
04/09
Assistant
Vice
President,
Allianz
Investment
Management
LLC,
2013
to
present.
Laura
Quade
(1969)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
08/23
Vice
President,
Allianz
Investment
Management
LLC,
2023
to
present,
previously
Director
at
Wealth
Enhancement
Group,
November
2019
to
November
2022;
Vice
President,
Head
of
Operations
at
Hartford
Funds
2014
to
2019
ANNRPT1223
02/24
The
Allianz
VIP
Fund
of
Funds
are
distributed
by
Allianz
Life
Financial
Services,
LLC.
These
Funds
are
not
FDIC
Insured.
AZL®
MVP
Moderate
Index
Strategy
Fund
Annual
Report
December
31,
2023
Table
of
Contents
AZL®
MVP
Moderate
Index
Strategy
Fund
Management
Discussion
and
Analysis
Page
1
Expense
Examples
and
Portfolio
Composition
Page
3
Schedule
of
Portfolio
Investments
Page
4
Statement
of
Assets
and
Liabilities
Page
5
Statement
of
Operations
Page
5
Statements
of
Changes
in
Net
Assets
Page
6
Financial
Highlights
Page
7
Notes
to
the
Financial
Statements
Page
8
Report
of
Independent
Registered
Public
Accounting
Firm
Page
13
Other
Federal
Income
Tax
Information
Page
14
Other
Information
Page
15
Approval
of
Investment
Advisory
Agreement
Page
16
Information
about
the
Board
of
Trustees
and
Officers
Page
19
This
report
is
submitted
for
the
general
information
of
the
shareholder
of
the
Fund.
The
report
is
not
authorized
for
distribution
to
prospective
investors
in
the
Fund
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
contains
details
concerning
the
sales
charges
and
other
pertinent
information.
1
AZL®
MVP
Moderate
Index
Strategy
Fund
Review
(Unaudited)
Allianz
Investment
Management
LLC
serves
as
the
Manager
for
the
AZL
®
MVP
Moderate
Index
Strategy
Fund.
What
factors
affected
the
Fund’s
performance
during
the
year
ended
December
31,
2023?*
For
the
year
ended
December
31,
2023,
the
AZL
MVP
Moderate
Index
Strategy
Fund
(the
“Fund”)
returned
14.59%.
That
compared
to
26.29%,
5.53%
and
17.71%
total
return
for
its
benchmarks,
the
S&P
500
Index,
the
Bloomberg
U.S.
Aggregate
Bond
Index,
and
the
Moderate
Composite
Index,
respectively.
1
The
AZL
MVP
Moderate
Index
Strategy
Fund
is
a
fund
of
funds
that
pursues
broad
diversification
across
four
underlying
equity
sub-portfolios
and
one
fixed
income
sub-portfolio.
The
four
equity
sub-portfolios
pursue
passive
strategies
that
aim
to
achieve,
before
fees,
returns
similar
to
the
S&P
500
Index,
the
S&P
MidCap
400
Index
2
,
the
S&P
SmallCap
600
Index
3
,
and
the
MSCI
EAFE
Index
4
.
The
fixed-income
sub-portfolio
is
an
enhanced
bond
index
strategy
that
seeks
to
achieve
a
return
that
exceeds
that
of
the
Bloomberg
U.S.
Aggregate
Bond
Index.
Generally,
the
Fund
allocates
approximately
50%
to
70%
of
its
assets
to
the
underlying
equity
index
funds
and
approximately
30%
to
50%
of
its
assets
to
the
underlying
AZL
Enhanced
Bond
Index
Fund.
The
Fund
also
employs
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process,
which
is
intended
to
adjust
the
risk
of
the
portfolio
based
on
quantitative
indicators
of
market
risk,
such
as
the
current
level
of
Fund
and
market
volatility.
U.S.
equities,
particularly
large-cap
stocks,
posted
positive
performance
in
2023.
The
gains
were
due
in
part
to
falling
inflation
and
better-than-expected
earnings,
as
well
as
resilient
consumer
demand.
The
European
Central
Bank’s
(ECB)
monetary
tightening
had
a
negative
effect
on
economic
growth
in
the
Eurozone,
and
Russia’s
war
with
Ukraine
continued
to
weigh
on
international
equities.
The
U.S.
fixed
income
market
received
a
boost
after
the
Federal
Reserve
announced
a
possible
end
to
future
interest
rate
hikes.
Most
sectors
of
the
bond
market
finished
with
positive
performance
in
2023.
The
Fund,
which
invests
in
both
U.S.
and
international
markets,
underperformed
its
blended
benchmark
during
the
year
ended
December
31,
2023.
Its
off-benchmark
allocation
to
developed
market
non-U.S.
equities
slightly
detracted
from
relative
performance,
as
these
underperformed
U.S.
equities.
The
Fund’s
off-benchmark
allocation
to
mid-cap
and
small-cap
U.S.
equities
also
slightly
detracted
from
relative
performance,
as
these
underperformed
the
S&P
500
Index.
The
MVP
risk
management
process
uses
derivatives
to
seek
to
control
portfolio
volatility
in
unstable
market
conditions.
The
MVP
process
was
engaged
during
the
year
and
reduced
the
fund’s
equity
exposure
at
multiple
points
during
the
year.
The
MVP
process
slightly
detracted
from
the
fund’s
performance
during
2023.
Past
performance
does
not
guarantee
future
results.
*
The
Fund’s
portfolio
composition
is
subject
to
change.
There
is
no
guarantee
that
any
sectors
mentioned
will
continue
to
perform
as
described
or
that
securities
in
such
sectors
will
be
held
by
the
Fund
in
the
future.
The
information
contained
in
this
commentary
is
for
informational
purposes
only
and
should
not
be
construed
as
a
recommendation
to
purchase
or
sell
securities
in
the
sector
mentioned.
The
Fund’s
holdings
and
weightings
are
as
of
December
31,
2023.
1
For
a
complete
description
of
the
Fund’s
performance
benchmarks
please
refer
to
page
2
of
this
report.
2
The
Standard
&
Poor’s
MidCap
400
Index
(“S&P
400”)
is
a
widely
used
index
for
mid-sized
companies.
The
S&P
400
covers
7%
of
the
U.S.
equities
market,
and
is
part
of
a
series
of
S&P
U.S.
indexes
that
can
be
used
as
building
blocks
for
portfolio
composition.
3
The
Standard
&
Poor’s
SmallCap
600
Index
(“S&P
600”)
is
a
widely
used
index
for
small-capitalization
companies.
The
S&P
600
covers
3%
of
the
U.S.
equities
market,
and
is
part
of
a
series
of
S&P
U.S.
indexes
that
can
be
used
as
building
blocks
for
portfolio
composition.
4
The
Morgan
Stanley
Capital
International,
Europe,
Australasia
and
Far
East
(“MSCI
EAFE”)
Index
is
a
free
float-adjusted
market
capitalization-weighted
index
that
is
designed
to
measure
the
equity
market
performance
of
developed
markets,
excluding
the
U.S.
&
Canada.
The
indexes
defined
above
are
unmanaged.
Investors
cannot
invest
directly
in
an
index.
2
AZL®
MVP
Moderate
Index
Strategy
Fund
Review
(Unaudited)
Fund
Objective
The
Fund’s
investment
objective
is
to
seek
long-term
capital
appreciation.
This
objective
may
be
changed
by
the
Trustees
of
the
Fund
without
shareholder
approval.
The
Fund
seeks
to
achieve
its
objective
by
investing
in
five
underlying
index
funds
(the
"Index
Strategy
Underlying
Funds"),
allocating
approximately
50%-70%
of
its
assets
in
the
underlying
equity
index
funds
and
approximately
30%-50%
of
its
assets
in
the
underlying
bond
index
fund.
Investment
Concerns
The
Fund
invests
in
underlying
funds,
so
its
investment
performance
is
directly
related
to
the
performance
of
those
underlying
funds.
Before
investing,
investors
should
assess
the
risks
associated
with
and
types
of
investments
made
by
each
of
the
underlying
funds
in
which
the
Fund
invests.
Quantitative
investing
involves
risk
that
the
values
of
securities
selected
in
the
quantitative
analysis
can
react
differently
than
the
market
or
securities
selected
using
fundamental
analysis.
Stocks
are
more
volatile
and
carry
more
risk
and
return
potential
than
other
forms
of
investments.
International
investing
may
involve
risk
of
capital
loss
from
unfavorable
fluctuations
in
currency
values,
from
differences
in
generally
accepted
accounting
principles
or
from
economic
or
political
instability
in
other
nations.
Small-
to
mid-capitalization
companies
typically
have
a
higher
risk
of
failure
and
historically
have
experienced
a
greater
degree
of
volatility.
The
performance
of
the
underlying
funds
is
expected
to
be
lower
than
that
of
the
Indexes
because
of
fees
and
expenses.
Securities
in
which
the
underlying
funds
will
invest
may
involve
substantial
risk
and
may
be
subject
to
sudden
severe
price
declines.
Investing
in
a
single
industry
or
sector,
or
concentrating
investments
in
a
limited
number
of
industries
or
sectors,
tends
to
increase
the
risk
that
economic,
political,
or
regulatory
developments
affecting
certain
industries
or
sectors
will
have
a
large
impact
on
the
value
of
the
portfolio.
Mortgage-backed
investments
involve
risk
of
loss
due
to
prepayments
and,
like
any
bond,
due
to
default.
Because
of
the
sensitivity
of
mortgage-
related
securities
to
changes
in
interest
rates,
an
underlying
fund’s
performance
may
be
more
volatile
than
if
it
did
not
hold
these
securities.
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
Bonds
offer
a
relatively
stable
level
of
income,
although
bond
prices
will
fluctuate,
providing
the
potential
for
principal
gain
or
loss.
Investing
in
derivative
instruments
involves
risks
that
may
be
different
from
or
greater
than
the
risk
associated
with
investing
directly
in
securities
or
other
traditional
instruments.
For
a
complete
description
of
these
and
other
risks
associated
with
investing
in
the
Fund,
please
refer
to
the
Fund’s
prospectus.
Growth
of
$10,000
Investment
The
chart
above
represents
a
comparison
of
a
hypothetical
investment
in
the
Fund
versus
a
similar
investment
in
the
Fund’s
benchmarks
and
represents
the
reinvestment
of
dividends
and
capital
gains
in
the
Fund.
Past
performance
does
not
guarantee
future
results.
The
performance
data
quoted
represents
past
performance
and
current
returns
may
be
lower
or
higher.
The
investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
the
original
cost.
To
obtain
performance
information
current
to
the
most
recent
month
end,
please
visit
www.Allianzlife.com.
The
above
expense
ratio
is
based
on
the
current
Fund
prospectus
dated
May
1,
2023.
The
Manager
and
the
Fund
have
entered
into
a
written
agreement
limiting
operating
expenses,
excluding
certain
expenses
(such
as
interest
expense
and
acquired
fund
fees
and
expenses),
to
0.15%
through
April
30,
2025.
Additional
information
pertaining
to
the
December
31,
2023
expense
ratio
can
be
found
in
the
Financial
Highlights.
Acquired
fund
fees
and
expenses
are
incurred
indirectly
by
the
Fund
through
the
valuation
of
the
Fund’s
investments
in
the
Index
Strategy
Underlying
Funds.
Accordingly,
acquired
fund
fees
and
expenses
affect
the
Fund’s
total
returns.
Because
these
fees
and
expenses
are
not
included
in
the
Fund’s
financial
highlights,
the
Fund’s
total
annual
fund
operating
expenses,
as
shown
in
the
current
prospectus,
do
not
correlate
to
the
ratios
of
expenses
to
average
net
assets
shown
in
the
Financial
Highlights.
Without
acquired
fund
fees
and
expenses
the
Fund’s
gross
expense
ratio
would
be
0.13%.
The
total
return
of
the
Fund
does
not
reflect
the
effect
of
any
insurance
charges,
the
annual
maintenance
fee
or
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Such
charges,
fees
and
tax
payments
would
reduce
the
performance
quoted.
The
Fund’s
performance
is
measured
against
the
Standard
&
Poor’s
500
Index
(“S&P
500”),
the
Bloomberg
U.S.
Aggregate
Bond
Index
and
the
Moderate
Composite
Index
(“Composite”).
The
S&P
500
is
representative
of
500
selected
common
stocks,
most
of
which
are
listed
on
the
New
York
Stock
Exchange,
and
is
a
measure
of
the
U.S.
Stock
market
as
a
whole.
The
Bloomberg
U.S.
Aggregate
Bond
Index
is
a
market
value-
weighted
performance
benchmark
for
investment-grade
fixed-rate
debt
issues,
including
government,
corporate,
asset-backed,
and
mortgage-
backed
securities,
with
maturities
of
at
least
one
year.
The
Composite
is
a
blended
index
comprised
of
(60%)
S&P
500
and
(40%)
Bloomberg
U.S.
Aggregate
Bond
Index.
These
indexes
are
unmanaged
and
do
not
reflect
the
deduction
of
fees
associated
with
a
mutual
fund,
such
as
investment
management
and
fund
accounting
fees.
The
Fund’s
performance
reflects
the
deduction
of
fees
for
services
provided
to
the
Fund.
Investors
cannot
invest
directly
in
an
index.
Average
Annual
Total
Returns
as
of
December
31,
2023
1
Year
3
Years
5
Years
10
Years
AZL
®
MVP
Moderate
Index
Strategy
Fund
14.59%
2.93%
6.61%
5.03%
Bloomberg
U.S.
Aggregate
Bond
Index
5.53%
(3.31)%
1.10%
1.81%
Moderate
Composite
Index
17.71%
4.70%
10.09%
8.14%
S&P
500
Index
26.29%
10.00%
15.69%
12.03%
Expense
Ratio
Gross
AZL
®
MVP
Moderate
Index
Strategy
Fund
0.69%
AZL
MVP
Moderate
Index
Strategy
Fund
3
Expense
Examples
(Unaudited)
As
a
shareholder
of
the
AZL
MVP
Moderate
Index
Strategy
Fund
(the
“Fund”),
you
incur
ongoing
costs,
including
management
fees,
distribution
fees,
and
other
Fund
expenses.
These
examples
are
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
Please
note
that
the
expenses
shown
in
each
table
do
not
reflect
expenses
that
apply
to
the
subaccount
or
the
insurance
contract.
If
the
expenses
that
apply
to
the
subaccount
or
the
insurance
contract
were
included,
your
costs
would
have
been
higher.
These
examples
are
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
periods
presented
below.
The
Actual
Expense
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
below,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
table
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
this
period.
The
Hypothetical
Expense
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
Moderate
Index
Strategy
Fund
$1,000.00
$1,055.00
$0.73
0.14%
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
Moderate
Index
Strategy
Fund
$1,000.00
$1,024.50
$0.71
0.14%
*
Expenses
are
equal
to
the
average
account
value
multiplied
by
the
Fund's
annualized
expense
ratio
multiplied
by
184/365
(the
number
of
days
in
the
most
recent
fiscal
half-year
divided
by
the
number
of
days
in
the
fiscal
year).
Portfolio
Composition
(Unaudited)
Investments
Percent
of
Net
Assets
Domestic
Equity
Funds
42
.1
%
Fixed
Income
Fund
37
.9
International
Equity
Fund
15
.1
Total
Investment
Securities
95
.1
Net
other
assets
(liabilities)
4
.9
Net
Assets
100
.0
%
AZL
MVP
Moderate
Index
Strategy
Fund
Schedule
of
Portfolio
Investments
December
31,
2023
4
See
accompanying
notes
to
the
financial
statements.
Percentages
indicated
are
based
on
net
assets
as
of
December
31,
2023
.
Shares
Value
Affiliated
Investment
Companies
(
95
.1
%
):
Domestic
Equity
Funds
(
42
.1
%
):
1,607,586
AZL
Mid
Cap
Index
Fund,
Class
2
$
34,145,133
5,371,678
AZL
S&P
500
Index
Fund,
Class
2
108,346,748
1,397,429
AZL
Small
Cap
Stock
Index
Fund,
Class
2
17,104,528
159,596,409
1
Fixed
Income
Fund
(
37
.9
%
):
14,635,676
AZL
Enhanced
Bond
Index
Fund
143,722,342
Shares
Value
Affiliated
Investment
Companies,
continued
International
Equity
Fund
(
15
.1
%
):
3,289,228
AZL
International
Index
Fund,
Class
2
$
57,364,131
Total
Affiliated
Investment
Companies
(Cost
$322,550,571)
360,682,882
Total
Investment
Securities
(Cost
$322,550,571)
—
95.1%(a)
360,682,882
Net
other
assets
(liabilities)
—
4.9%
18,632,118
Net
Assets
—
100.0%
$
379,315,000
(a)
See
Federal
Tax
Information
listed
in
the
Notes
to
the
Financial
Statements.
Futures
Contracts
At
December
31,
2023,
the
Fund's
open
futures
contracts
were
as
follows:
Long
Futures
Description
Expiration
Date
Number
of
Contracts
Notional
Amount
Value
and
Unrealized
Appreciation/
(Depreciation)
S&P
500
Index
E-Mini
March
Futures
(U.S.
Dollar)
3/15/24
47
$
11,327,000
$
368,659
U.S.
Treasury
10-Year
Note
March
Futures
(U.S.
Dollar)
3/19/24
67
7,563,672
234,333
$
602,992
AZL
MVP
Moderate
Index
Strategy
Fund
5
See
accompanying
notes
to
the
financial
statements.
Statement
of
Assets
and
Liabilities
December
31,
2023
Statement
of
Operations
For
the
Year
Ended
December
31,
2023
Assets:
Investments
in
affiliates,
at
cost
$
322,550,571
Investments
in
affiliates,
at
value
$
360,682,882
Deposit
at
broker
for
futures
contracts
collateral
18,953,254
Interest
and
dividends
receivable
66,711
Receivable
for
affiliated
investments
sold
225,543
Prepaid
expenses
1,690
Total
Assets
379,930,080
Liabilities:
Cash
overdraft
225,543
Payable
for
capital
shares
redeemed
337,804
Management
fees
payable
31,825
Administration
fees
payable
7,540
Custodian
fees
payable
2,372
Administrative
and
compliance
services
fees
payable
475
Transfer
agent
fees
payable
748
Trustee
fees
payable
1,971
Other
accrued
liabilities
6,802
Total
Liabilities
615,080
Commitments
and
contingent
liabilities^
Net
Assets
$
379,315,000
Net
Assets
Consist
of:
Paid
in
capital
$
347,896,294
Total
distributable
earnings
31,418,706
Net
Assets
$
379,315,000
Shares
of
beneficial
interest
(unlimited
number
of
shares
authorized,
no
par
value)
29,535,917
Net
Asset
Value
(offering
and
redemption
price
per
share)
$
12.84
^
See
Note
3
in
Notes
to
the
Financial
Statements.
Investment
Income:
Dividends
from
affiliates
$
5,421,883
Interest
814,429
Dividends
from
non-affiliates
2,525
Total
Investment
Income
6,238,837
Expenses:
Management
fees
382,873
Administration
fees
79,605
Custodian
fees
14,056
Administrative
and
compliance
services
fees
5,504
Transfer
agent
fees
7,731
Trustee
fees
22,501
Professional
fees
21,554
Shareholder
reports
6,255
Other
expenses
7,815
Total
expenses
547,894
Net
Investment
Income/(Loss)
5,690,943
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments:
Net
realized
gains/(losses)
on
affiliated
underlying
funds
4,118,217
Net
realized
gains
distributions
from
affiliated
underlying
funds
6,107,969
Net
realized
gains/(losses)
on
futures
contracts
1,069,667
Change
in
net
unrealized
appreciation/depreciation
on
affiliated
underlying
funds
34,458,439
Change
in
net
unrealized
appreciation/depreciation
on
futures
contracts
677,094
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments
46,431,386
Change
in
Net
Assets
Resulting
From
Operations
$
52,122,329
AZL
MVP
Moderate
Index
Strategy
Fund
6
See
accompanying
notes
to
the
financial
statements.
Statements
of
Changes
in
Net
Assets
For
the
Year
Ended
December
31,
2023
For
the
Year
Ended
December
31,
2022
Change
In
Net
Assets:
Operations:
Net
investment
income/(loss)
$
5,690,943
$
5,717,304
Net
realized
gains/(losses)
on
investments
11,295,853
25,207,008
Change
in
unrealized
appreciation/depreciation
on
investments
35,135,533
(
109,489,991
)
Change
in
net
assets
resulting
from
operations
52,122,329
(
78,565,679
)
Distributions
to
Shareholders:
Distributions
(
12,393,539
)
(
45,166,558
)
Change
in
net
assets
resulting
from
distributions
to
shareholders
(
12,393,539
)
(
45,166,558
)
Capital
Transactions:
Proceeds
from
shares
issued
1,590,206
2,377,791
Proceeds
from
dividends
reinvested
12,393,539
45,166,558
Value
of
shares
redeemed
(
66,340,905
)
(
55,840,669
)
Change
in
net
assets
resulting
from
capital
transactions
(
52,357,160
)
(
8,296,320
)
Change
in
net
assets
(
12,628,370
)
(
132,028,557
)
Net
Assets:
Beginning
of
period
391,943,370
523,971,927
End
of
period
$
379,315,000
$
391,943,370
Share
Transactions:
Shares
issued
130,949
173,404
Dividends
reinvested
1,072,105
4,018,377
Shares
redeemed
(
5,420,991
)
(
4,239,959
)
Change
in
shares
(
4,217,937
)
(
48,178
)
AZL
MVP
Moderate
Index
Strategy
Fund
Financial
Highlights
(Selected
data
for
a
share
of
beneficial
interest
outstanding
throughout
the
periods
indicated.
Does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.)
7
See
accompanying
notes
to
the
financial
statements.
Year
Ended
December
31,
2023
Year
Ended
December
31,
2022
Year
Ended
December
31,
2021
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Net
Asset
Value,
Beginning
of
Period
$11.61
$15.50
$15.11
$14.96
$13.28
Investment
Activities:
Net
Investment
Income/(Loss)(a)
0.18
0.17
0.12
0.26
0.26
Net
Realized
and
Unrealized
Gains/(Losses)
on
Investments
1.46
(2.60
)
1.70
0.64
2.17
Total
from
Investment
Activities
1.64
(2.43
)
1.82
0.90
2.43
Distributions
to
Shareholders
From:
Net
Investment
Income
(0.24
)
(0.28
)
(0.30
)
(0.27
)
(0.32
)
Net
Realized
Gains
(0.17
)
(1.18
)
(1.13
)
(0.48
)
(0.43
)
Total
Dividends
(0.41
)
(1.46
)
(1.43
)
(0.75
)
(0.75
)
Net
Asset
Value,
End
of
Period
$12.84
$11.61
$15.50
$15.11
$14.96
Total
Return
(b)
14.59
%
(15.38
)%
12.46
%
6.44
%
18.64
%
Ratios
to
Average
Net
Assets/Supplemental
Data:
Net
Assets,
End
of
Period
(000's)
$379,315
$391,943
$523,972
$533,854
$534,298
Net
Investment
Income/(Loss)
1.49
%
1.31
%
0.76
%
1.83
%
1.77
%
Expenses
Before
Reductions*(c)
0.14
%
0.13
%
0.13
%
0.13
%
0.13
%
Expenses
Net
of
Reductions*
0.14
%
0.13
%
0.13
%
0.13
%
0.13
%
Portfolio
Turnover
Rate
3
%
8
%
6
%
18
%
5
%
*
The
expense
ratios
exclude
the
impact
of
fees/expenses
paid
by
each
underlying
fund.
(a)
Calculated
using
the
average
shares
method.
(b)
The
returns
include
reinvested
dividends
and
fund
level
expenses,
but
exclude
insurance
contract
charges. If
these
charges
were
included,
the
returns
would
have
been
lower.
(c)
Excludes
fee
reductions. If
such
fee
reductions
had
not
occurred,
the
ratios
would
have
been
as
indicated.
AZL
MVP
Moderate
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
8
1.
Organization
The
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”)
was
organized
as
a
Delaware
statutory
trust
on
June
16,
2004.
The
Trust
is
an
open-end
management
investment
company
registered
under
the
Investment
Company
Act
of
1940,
as
amended,
(the
“1940
Act”)
and
thus
is
determined
to
be
an
investment
company,
and
follows
the
investment
company
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946
“Financial
Services—Investment
Companies”.
The
Trust
consists
of 9
separate
investment
portfolios
(collectively,
the
“Funds”),
of
which
one
is
included
in
this
report,
the
AZL
MVP
Moderate
Index
Strategy
Fund (the
“Fund”),
and 8
are
presented
in
separate
reports.
The
Fund
is
a
diversified
series
of
the
Trust.
The
Fund
is
a
“fund
of
funds”,
which
means
that
the
Fund
invests
primarily
in
other
mutual
funds
(the
"Underlying
Funds").
Underlying
Funds
invest
in
stocks,
bonds,
and
other
securities
and
reflect
varying
amounts
of
potential
investment
risk
and
reward.
The
Underlying
Funds
record
their
investments
at
fair
value.
Periodically,
the
Fund
will
adjust
its
asset
allocation
as
it
seeks
to
achieve
its
investment
objective.
The
Trust
is
authorized
to
issue
an
unlimited
number
of
shares
of
the
Fund
without
par
value.
Shares
of
the
Fund
are
available
through
the
variable
annuity
contracts
offered
through
the
separate
accounts
of
participating
insurance
companies.
Currently,
the
Fund
only
offers
its
shares
to
separate
accounts
of
Allianz
Life
Insurance
Company
of
North
America
and
Allianz
Life
Insurance
Company
of
New
York,
affiliates
of
the
Trust
and
the
Manager,
as
defined
below.
Under
the
Trust’s
organizational
documents,
its
officers
and
trustees
are
indemnified
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
In
addition,
in
the
normal
course
of
business,
the
Fund
may
enter
into
contracts
with
its
vendors
and
others
that
provide
for
general
indemnifications.
The
Fund’s
maximum
exposure
under
these
arrangements
is
unknown,
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund.
However,
based
on
experience,
the
Fund
expects
that
risk
of
loss
to
be
remote.
2.
Significant
Accounting
Policies
The
following
is
a
summary
of
significant
accounting
policies
followed
by
the
Fund
in
the
preparation
of
its
financial
statements.
The
policies
conform
with
U.S.
generally
accepted
accounting
principles
(“U.S.
GAAP”).
The
preparation
of
financial
statements
requires
management
to
make
certain
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
and
disclosure
of
contingent
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
Security
Valuation
The
Fund
records
its
investments
at
fair
value.
Fair
value
is
defined
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
willing
market
participants
at
the
measurement
date.
The
valuation
techniques
used
to
determine
fair
value
are
further
described
in
Note
4
below.
Investment
Transactions
and
Investment
Income
Investment
transactions
are
accounted
for
on
trade
date.
Net
realized
gains
and
losses
on
investments
sold
and
on
foreign
currency
transactions
are
recorded
on
the
basis
of
identified
cost.
Interest
income
is
recorded
on
the
accrual
basis
and
includes,
where
applicable,
the
amortization
of
premiums
or
accretion
of
discounts.
Dividend
income
is
recorded
on
the
ex-
dividend
date
except
in
the
case
of
foreign
securities,
in
which
case
dividends
are
recorded
as
soon
as
such
information
becomes
available.
Distributions
to
Shareholders
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
The
Fund
distributes
its
dividends
from
net
investment
income
and
net
realized
capital
gains,
if
any,
on
an
annual
basis.
The
amount
of
distributions
from
net
investment
income
and
from
net
realized
gains
is
determined
in
accordance
with
federal
income
tax
regulations,
which
may
differ
from
U.S.
GAAP.
These
“book/tax”
differences
are
either
temporary
or
permanent
in
nature.
To
the
extent
these
differences
are
permanent
in
nature
(e.g.,
return
of
capital,
net
operating
loss,
reclassification
of
certain
market
discounts,
gain/loss,
paydowns,
and
distributions),
such
amounts
are
reclassified
within
the
composition
of
net
assets
based
on
their
federal
tax-basis
treatment;
temporary
differences
(e.g.,
wash
sales
and
differing
treatment
on
certain
investments)
do
not
require
reclassification.
Distributions
to
shareholders
that
exceed
net
investment
income
and
net
realized
gains
for
tax
purposes
are
reported
as
distributions
of
capital.
Expense
Allocation
Expenses
directly
attributable
to
the
Fund
are
charged
directly
to
the
Fund,
while
expenses
attributable
to
more
than
one
Fund
are
allocated
among
the
respective
Funds
based
upon
relative
net
assets
or
some
other
reasonable
method.
Expenses
which
are
attributable
to
more
than
one
Trust
are
allocated
across
the
Allianz
Variable
Insurance
Products
Trust,
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
AIM
ETF
Products
Trust
based
upon
relative
net
assets
or
another
reasonable
basis.
Allianz
Investment
Management
LLC
(the
“Manager”),
serves
as
the
investment
manager
for
the
Trust,
Allianz
Variable
Insurance
Products
Trust
and
AIM
ETF
Products
Trust.
This
report
does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.
Affiliated
Securities
Transactions
Pursuant
to
Rule
17a-7
under
the
1940
Act,
the
Fund
may
engage
in
securities
transactions
with
affiliated
investment
companies
and
advisory
accounts
managed
by
the
Manager.
Any
such
purchase
or
sale
transaction
must
be
effected
without
a
brokerage
commission
or
other
remuneration,
except
for
customary
transfer
fees.
The
transaction
must
be
effected
at
the
current
market
price,
which
is
either
the
security’s
last
sale
price
on
an
exchange
or,
if
there
are
no
transactions
in
the
security
that
day,
at
the
average
of
the
highest
bid
and
lowest
asked
price.
During
the
year
ended
December
31,
2023,
the
Fund
did
not
engage
in
any
Rule
17a-7
transactions.
AZL
MVP
Moderate
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
9
Derivative
Instruments
All
open
derivative
positions
at
period
end
are
reflected
on
the
Fund’s
Schedule
of
Portfolio
Investments.
The
following
is
a
description
of
the
derivative
instruments
utilized
by
the
Fund,
including
the
primary
underlying
risk
exposures
related
to
each
instrument
type.
The
Fund’s
allocation
to
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process
may
include
(a)
derivatives
such
as
index
futures,
other
futures
contracts,
options,
and
other
similar
securities
and
(b)
cash,
money
market
equivalents,
short-term
debt
instruments,
money
market
funds,
and
short-term
debt
funds
to
satisfy
all
applicable
margin
requirements
and
to
provide
additional
portfolio
liquidity
to
satisfy
large
redemptions
and
any
margin
calls.
Due
to
the
leverage
provided
by
derivatives,
the
notional
value
of
the
Fund’s
derivative
positions
could
exceed
20%
of
the
Fund’s
value.
The
Fund
may
also
use
futures
to
gain
equity
exposure
and
may
hold
cash
as
a
buffer
in
the
event
of
market
shocks.
Futures
Contracts
During
the
year
ended
December
31,
2023,
the
Fund
invested
in
futures
contracts
to
reduce
volatility
and
limit
the
need
to
decrease
or
increase
allocations
to
underlying
funds.
Futures
contracts
are
valued
based
upon
their
quoted
daily
settlement
prices.
Upon
entering
into
a
futures
contract,
the
Fund
is
required
to
segregate
liquid
assets
in
accordance
with
the
initial
margin
requirements
of
the
broker
or
exchange.
Futures
contracts
are
marked
to
market
daily
and
a
payable
or
receivable
for
the
change
in
value
(“variation
margin”),
if
any,
is
recorded
by
the
Fund.
Gains
or
losses
are
recognized
but
not
considered
realized
until
the
contracts
expire
or
are
closed.
Futures
contracts
involve,
to
varying
degrees,
elements
of
market
risk
(generally
equity
price
risk
related
to
stock
futures,
interest
rate
risk
related
to
bond
futures,
and
foreign
currency
risk
related
to
currency
futures)
and
exposure
to
loss
in
excess
of
the
variation
margin
disclosed
in
the
Statement
of
Assets
and
Liabilities.
The
primary
risks
associated
with
the
use
of
futures
contracts
are
the
imperfect
correlation
between
the
change
in
value
of
the
underlying
securities
and
the
prices
of
futures
contracts,
the
possibility
of
an
illiquid
market,
and
the
inability
of
the
counterparty
to
meet
the
terms
of
the
contract.
For
the
year
ended
December
31,
2023,
the
monthly
average
notional
amount
for
long
contracts
was
$18.0
million.
There
was
no
short
contract
activity
during
the
period.
Realized
gains
and
losses
are
reported
as
“Net
realized
gains/(losses)
on
futures
contracts”
on
the
Statement
of
Operations.
Summary
of
Derivative
Instruments
The
following
is
a
summary
of
the
values
of
derivative
instruments
on
the
Fund’s
Statement
of
Assets
and
Liabilities,
categorized
by
risk
exposure,
as
of
December
31,
2023:
The
following
is
a
summary
of
the
effect
of
derivative
instruments
on
the
Statement
of
Operations,
categorized
by
risk
exposure,
for
the
year
ended
December
31,
2023:
3.
Fees
and
Transactions
with
Affiliates
and
Other
Parties
The
Manager
provides
investment
advisory
and
management
services
for
the
Fund.
The
Manager
has
contractually
agreed
to
waive
fees
and
reimburse
the
Fund
to
limit
the
annual
expenses,
excluding
interest
expense
(e.g.,
cash
overdraft
fees),
taxes,
brokerage
commissions,
acquired
fund
fees
and
expenses,
other
expenditures
that
are
capitalized
in
accordance
with
U.S.
GAAP
and
other
extraordinary
expenses
not
incurred
in
the
ordinary
course
of
the
Fund’s
business,
based
on
the
daily
net
assets
of
the
Fund,
through
April
30,
2025.
Expenses
incurred
for
investment
advisory
and
management
services
are
reflected
on
the
Statement
of
Operations
as
“Management
fees.”
For
the
year
ended
December
31,
2023,
the
annual
rate
due
to
the
Manager
and
the
annual
expense
limit
were
as
follows:
Any
amounts
contractually
waived
or remitted
to
the
Fund by
the
Manager
with
respect
to
the
annual
expense
limit
in
a
particular
fiscal
year
may
be
reimbursed
by
the
Fund
to
the
Manager,
provided
that
such
reimbursement
will
not
cause
the
Fund
to
exceed
the
lesser
of
any
applicable
expense
limit
in
effect
(i)
at
the
time
of
the
original
waiver
or
payment
and
(ii)
at
the
time
of
such
reimbursement,
as
supported
by
standard accounting
practices.
Such
reimbursement
only
applies
to
amounts
waived
or
paid
by
the
Manager
within
the
three
years
prior
to
the
date
of
such
reimbursement,
calculated
monthly
from
when
the
waiver
or
payment
was
recorded.
Any
amounts
recouped
by
the
Manager
during
the
period
are
reflected
on
the
Statement
of
Operations
as
“Recoupment
of
prior
expenses
reimbursed
by
the
Manager.”
At
December
31,
2023,
there
were
no
remaining
contractual
reimbursements
subject
to
repayment
by
the
Fund
in
subsequent
years,
and
no
commitment
or
contingent
liability
is
expected.
Asset
Derivatives
Liability
Derivatives
Primary
Risk
Exposure
Statement
of
Assets
and
Liabilities
Location
Total
Value
Statement
of
Assets
and
Liabilities
Location
Total
Value
Equity
Risk
368,658
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$368,659
Payable
for
variation
margin
on
futures
contracts*
$—
Interest
Rate
Risk
–
234,333
–
–
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$234,333
Payable
for
variation
margin
on
futures
contracts*
$
—
*
For
futures
contracts,
the
amounts
represent
the
cumulative
appreciation/depreciation
of
these
futures
contracts
as
reported
in
the
Schedule
of
Portfolio
Investments.
Only
the
current
day's
variation
margin,
if
any,
is
reported
within
the
Statement
of
Assets
and
Liabilities
as
Variation
margin
on
futures
contracts.
Primary
Risk
Exposure
Location
of
Gains/(Losses)
on
Derivatives
Recognized
Realized
Gains/(Losses)
on
Derivatives
Recognized
Change
in
Net
Unrealized
Appreciation/Depreciation
on
Derivatives
Recognized
Equity
Risk
(1,486,444)
(368,880)
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$
1,486,444
$
368,881
Interest
Rate
Risk
416,777
(308,213)
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$(416,777)
$308,213
Annual
Rate
Annual
Expense
Limit
AZL
MVP
Moderate
Index
Strategy
Fund
0.10%
0.15%
AZL
MVP
Moderate
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
10
Management
fees,
which
the
Manager
may
waive
in
order
to
maintain
more
competitive
expense
ratios,
are
not
subject
to
repayment
in
subsequent
years.
Information
on
the
total
amount
waived/reimbursed
by
the
Manager
or
repaid
to
the
Manager
by
the
Fund
during
the
period
can
be
found
on
the
Statement
of
Operations,
as
applicable.
During
the
year
ended
December
31,
2023,
there
were
no
such
waivers.
The
Manager
serves
as
the
investment
adviser
of the
underlying
funds
in
which
the
Fund
invests.
At
December
31,
2023,
these
underlying
funds
are
noted
as
Affiliated
Investment
Companies
in
the
Fund’s
Schedule
of
Portfolio
Investments.
Additional
information,
including
financial
statements,
about
these
Funds
is
available
at
www.allianzlife.com.
The
Manager
is
paid
a
separate
fee
from
the
underlying
funds
for
such
services.
A
summary
of
the
Fund’s
investments
in
affiliated
investment
companies
for
the
year
ended
December
31,
2023
is
as
follows:
Pursuant
to
separate
agreements
between
the
Trust
and
the
Manager,
the
Manager
provides
a
Chief
Compliance
Officer
(“CCO”)
and
certain
compliance
oversight
and
regulatory
filing
services
to
the
Trust.
Under
these
agreements,
the
Manager
is
entitled
to
an
amount
equal
to
a
portion
of
the
compensation
and
certain
other
expenses
related
to
the
individuals
performing
the
CCO
and
compliance
oversight
services,
as
well
as
$100
per
hour
for
time
incurred
in
connection
with
the
preparation
and
filing
of
certain
documents
with
the
SEC.
The
fees
are
paid
to
the
Manager
on
a
quarterly
basis.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administrative
and
compliance
services
fees.”
Citi
Fund
Services
Ohio,
Inc.
(“Citi”
or
the
“Administrator”),
a
wholly
owned
subsidiary
of
Citigroup,
Inc.,
with
which
an
officer
of
the
Trust
is
affiliated,
serves
as
the
Trust’s
administrator
and
fund
accountant,
and
assists
the
Trust
in
all
aspects
of
its
administration
and
operation.
The
Administrator
is
entitled
to
a
fee,
accrued
daily
and
paid
monthly.
The
Administrator
is
entitled
to
an
annual
fee
for
each
additional
class
of
shares
of
any
Fund,
certain
annual
fees
in
supporting
fair
value
services,
and
a
Trust-wide
annual
fee
for
providing
infrastructure
and
support
in
implementing
the
written
policies
and
procedures
comprising
the
Fund’s
compliance
program.
The
Administrator
is
also
reimbursed
for
certain
expenses
incurred.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administration
fees.”
FIS
Investor
Services
LLC
(“FIS”)
serves
as
the
Fund's
transfer
agent.
Under
the
Transfer
Agent
Agreement,
the
Trust
pays
FIS
a
fee
for
its
services
and
reimburses
FIS
for
all
of
their
reasonable
out-of-pocket
expenses
incurred
in
providing
these
services.
The
Bank
of
New
York
Mellon
(“BNY
Mellon”
or
the
“Custodian”)
serves
as
the
Trust’s
custodian.
For
these
services
as
custodian,
the
Funds
pay
BNY
Mellon
a
fee
based
on
a
percentage
of
assets
held
on
behalf
of
the
Funds,
plus
certain
out-of-pocket
charges.
Allianz
Life
Financial
Services,
LLC
(“ALFS”),
an
affiliate
of
the
Manager,
serves
as
distributor
of
the
Fund.
ALFS
receives
an
annual
Trust-wide
annual
fee
of
$7,500,
paid
by
the
Manager
from
its
profits
and
not
by
the
Trust,
for
recordkeeping
and
reporting
services.
Certain
Officers
and
Trustees
of
the
Trust
are
affiliated
with
the
Manager
or
the
Administrator.
Such
Officers
(except
for
the
Trust’s
CCO
as
noted
above)
and
Trustees
receive
no
compensation
from
the
Trust
for
serving
in
their
respective
roles.
4.
Investment
Valuation
Summary
The
valuation
techniques
employed
by
the
Fund,
as
described
below,
maximize
the
use
of
observable
inputs
and
minimize
the
use
of
unobservable
inputs
in
determining
fair
value.
The
inputs
used
for
valuing
the
Fund’s
investments
are
summarized
in
the
three
broad
levels
listed
below:
•
Level
1
-
quoted
prices
in
active
markets
for
identical
assets
•
Level
2
-
other
significant
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayments
speeds,
credit
risk,
etc.)
•
Level
3
-
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
investments)
Changes
in
valuation
techniques
may
result
in
transfers
in
or
out
of
an
assigned
level
within
the
disclosure
hierarchy.
The
inputs
or
methodology
used
for
valuing
investments
is
not
necessarily
an
indication
of
the
risk
associated
with
investing
in
those
investments.
Investments
in
other
investment
companies
are
valued
at
their
published
net
asset
value
(“NAV”).
Security
prices
are
determined
pursuant
to
valuation
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
“Board”
or
“Trustees”)
as
of
the
close
of
the
New
York
Stock
Exchange
(“NYSE”)
(generally
4:00
pm
Eastern
Time).
The
investments
utilizing
Level
1
valuations
represent
investments
in
open-end
investment
companies.
Futures
contracts
are
valued
at
the
settlement
prices
established
each
day
on
the
primary
exchange
and
are
typically
categorized
as
Level
1
in
the
fair
value
hierarchy.
Value
12/31/22
Purchases
at
Cost
Proceeds
from
Sales
Net
Realized
Gains
(Losses)
Change
in
Net
Unrealized
Appreciation
(Depreciation)
Value
12/31/23
Shares
as
of
12/31/23
Dividend
Income
Net
Realized
Gains
Distributions
from
Affiliated
Underlying
Funds
AZL
Enhanced
Bond
Index
Fund
$
149,874,048
$
2,378,003
$
(13,673,438)
$
(2,748,864)
$
7,892,593
$
143,722,342
14,635,676
$
2,331,99
0
$
—
AZL
International
Index
Fund,
Class
2
59,272,264
1,372,183
(11,337,718)
1,751,966
6,305,436
57,364,131
3,289,228
1,372,183
—
AZL
Mid
Cap
Index
Fund,
Class
2
35,690,028
1,829,867
(7,327,701)
500,638
3,452,301
34,145,133
1,607,586
249,576
1,138,449
AZL
S&P
500
Index
Fund,
Class
2
111,349,034
5,308,513
(28,289,514)
4,633,674
15,345,041
108,346,748
5,371,678
1,292,784
4,015,729
AZL
Small
Cap
Stock
Index
Fund,
Class
2
17,714,768
1,242,460
(3,296,571)
(19,197)
1,463,068
17,104,528
1,397,429
175,350
953,791
$
373,900,142
$
12,131,026
$
(63,924,942)
$
4,118,217
$
34,458,439
$
360,682,882
26,301,597
$
5,421,88
3
$
6,107,969
AZL
MVP
Moderate
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
11
The
Board
has
designated
the
Manager
to
perform
the
Fund’s
fair
value
determinations
in
accordance
with
valuation
procedures
approved
by
the
Board.
The
effect
of
using
fair
value
pricing
is
that
the
Fund’s
NAV
will
be
subject
to
the
judgment
of
the
Manager.
The
Manager’s
fair
valuation
process
is
subject
to
the
oversight
of
the
Board.
The
following
is
a
summary
of
the
valuation
inputs
used
as
of
December
31,
2023
in
valuing
the
Fund’s
investments
based
upon
the
three
levels
defined
above:
5.
Security
Purchases
and
Sales
For
the
year
ended
December
31,
2023,
cost
of
purchases
and
proceeds
from
sales
of
securities
(excluding
securities
maturing
less
than
one
year
from
acquisition)
were
as
follows:
6.
Investment
Risks
The
risks
below
are
presented
in
an
order
intended
to
facilitate
readability.
Their
order
does
not
imply
that
the
realization
of
one
risk
is
more
likely
to
occur
more
frequently
than
another
risk,
nor
does
it
imply
that
the
realization
of
one
risk
is
likely
to
have
a
greater
adverse
impact
than
another
risk.
The
Fund
may
be
subject
to
other
risks
in
addition
to
these
identified
risks.
This
section
discusses
certain
common
principal
risks
encountered
by
the
Fund.
Derivatives
Risk:
The
Fund
may
invest
directly
or
through
affiliated
or
unaffiliated
mutual
funds
in
derivative
instruments
such
as
futures,
options,
and
options
on
futures.
A
derivative
is
a
financial
contract
whose
value
depends
on,
or
is
derived
from,
the
value
of
an
underlying
asset,
reference
rate,
or
risk.
Use
of
derivative
instruments
involves
risks
different
from,
or
possibly
greater
than,
the
risks
associated
with
investing
directly
in
securities
and
other
traditional
investments.
Derivatives
are
subject
to
a
number
of
other
risks,
such
as
liquidity
risk,
interest
rate
risk,
market
risk,
credit
risk,
and
selection
risk.
Derivatives
also
involve
the
risk
of
mispricing
or
improper
valuation
and
the
risk
that
changes
in
the
value
may
not
correlate
perfectly
with
the
underlying
asset,
rate,
or
index.
Using
derivatives
may
result
in
losses,
possibly
in
excess
of
the
principal
amount
invested.
Also,
suitable
derivative
transactions
may
not
be
available
in
all
circumstances.
The
other
party
to
a
derivatives
contract
could
default.
Foreign
Securities
Risk:
Investing
in
the
securities
of
non-U.S.
issuers
involves
a
number
of
risks,
such
as
fluctuations
in
currency
values,
adverse
political,
social
or
economic
developments,
and
differences
in
social
and
economic
developments
or
policies.
Such
risks
include
future
political
and
economic
developments,
and
the
possible
imposition
of
exchange
controls
or
other
foreign
governmental
laws
and
restrictions.
In
addition,
with
respect
to
certain
countries,
there
is
the
possibility
of
expropriation
of
assets,
confiscatory
taxation,
political
or
social
instability
or
diplomatic
developments
which
could
adversely
affect
investments
in
those
securities.
Certain
foreign
companies
may
be
subject
to
sanctions,
embargoes,
or
other
governmental
actions
that
may
impair
or
otherwise
limit
the
ability
to
invest
in,
receive,
hold
or
sell
the
securities
of
such
companies.
Fund
of
Fund
Risk:
The
Fund,
as
a
shareholder
of
the
underlying
funds,
indirectly
bears
its
proportionate
share
of
any
investment
management
fees
and
other
expenses
of
the
underlying
funds.
Further
due
to
the
fees
and
expenses
paid
by
the
Fund,
as
well
as
small
variations
in
the
Fund’s
actual
allocations
to
the
underlying
funds
and
any
futures
and
cash
held
in
the
Fund’s
portfolio,
the
performance
and
income
distributions
of
the
Fund
will
not
be
the
same
as
the
performance
and
income
distributions
of
the
underlying
funds.
In
addition,
the
Fund
maintains
indirect
exposure
to
various
types
of
risk
which
may
exist
in
the
underlying
Funds,
such
as
foreign
securities
risk,
fixed
income
securities
risk
and
other
risks.
Interest
Rate
Risk:
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
The
price
of
a
bond
is
also
affected
by
its
maturity.
Bonds
with
longer
maturities
generally
have
greater
sensitivity
to
changes
in
interest
rates.
Market
Risk
:
The
market
price
of
securities
owned
by
the
underlying
funds
may
go
up
or
down,
sometimes
rapidly
and
unpredictably.
Securities
may
decline
in
value
due
to
factors
affecting
securities
markets
generally
or
particular
industries
represented
in
the
securities
markets.
The
value
of
a
security
may
decline
due
to
general
market
conditions,
economic
trends
or
events that
are
not
specifically
related
to
a
particular
company,
such
as
real
or
perceived
adverse
economic
conditions,
inflation,
recessions, changes
in
the
general
outlook
for
corporate
earnings,
changes
in
interest
or
currency
rates,
or
adverse
investor
sentiment,
as
well
as
natural
disasters,
and
outbreaks
of
infectious
illnesses
or
other
widespread
public
health
issues.
Quantitative
Investing
Risk:
The
value
of
securities
selected
using
quantitative
analysis
can
react
differently
to
issuer,
political,
market,
and
economic
developments
than
the
market
as
a
whole
or
securities
selected
using
only
fundamental
analysis.
The
factors
used
in
quantitative
analysis
and
the
weight
placed
on
those
factors
may
not
be
predictive
of
a
security's
value.
In
addition,
factors
that
affect
a
security's
value
can
change
over
time
and
these
changes
may
not
be
reflected
in
the
quantitative
model.
A
quantitative
model
can
be
adversely
affected
by
errors
or
imperfections
in
the
factors
or
the
data
on
which
evaluations
are
based,
or
by
technical
issues
with
construction
or
implementation
of
the
model,
which
in
any
case
may
result
in
a
failure
of
the
portfolio
to
perform
as
expected
or
a
failure
to
identify
securities
that
will
perform
well
in
the
future.
Investment
Securities:
Level
1
Level
2
Level
3
Total
Affiliated
Investment
Companies
$
360,682,882
$
—
$
—
$
360,682,882
Total
Investment
Securities
360,682,882
—
—
360,682,882
Other
Financial
Instruments:
*
Futures
Contracts
602,992
—
—
602,992
Total
Investments
$361,285,874
$—
$—
$361,285,874
*
Other
Financial
Instruments
would
include
any
derivative
instruments,
such
as
futures
contracts. These
investments
are
generally
presented
in
the
Statement
of
Assets
and
Liabilities
at
variation
margin.
Purchases
Sales
AZL
MVP
Moderate
Index
Strategy
Fund
$12,131,026
$63,924,942
AZL
MVP
Moderate
Index
Strategy
Fund
Notes
to
the
Financial
Statements
December
31,
2023
12
7.
Federal
Tax
Information
It
is
the
policy
of
the
Fund
to
continue
to
qualify
as
a
regulated
investment
company
by
complying
with
the
provisions
available
to
certain
investment
companies,
as
defined
under
Subchapter
M
of
the
Internal
Revenue
Code,
and
to
make
distributions
of
net
investment
income
and
net
realized
gains
sufficient
to
relieve
it
from
all,
or
substantially
all,
federal
income
taxes.
Accordingly,
no
provisions
for
federal
income
taxes
are
required
in
the
financial
statements.
Management
of
the
Fund
has
reviewed
tax
positions
taken
in
tax
years
that
remain
subject
to
examination
by
all
major
tax
jurisdictions,
including
federal
(i.e.,
the
last
four
tax
year
ends
and
the
interim
tax
period
since
then,
as
applicable).
Management
believes
that
there
is
no
tax
liability
resulting
from
unrecognized
tax
benefits
related
to
uncertain
tax
positions
taken.
Cost
of
securities,
including
derivatives
and
short
positions
as
applicable,
for
federal
income
tax
purposes
at
December
31,
2023
was
$327,679,018.
The
gross
unrealized
appreciation/
(depreciation)
on
a
tax
basis
was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2023, was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2022, was
as
follows:
At
December
31,
2023,
the
components
of
accumulated
earnings
on
a
tax
basis
were
as
follows:
8.
Ownership
and
Principal
Holders
The
beneficial
ownership,
either
directly
or
indirectly,
of
more
than
25%
of
the
voting
securities
of
a
fund
creates
presumptions
of
control
of
the
fund,
under
section
2
(a)(9)
of
the
1940
Act.
As
of
December
31,
2023,
the
Fund
had
an
individual
shareholder
account
which
is
affiliated
with
the
Manager
representing
ownership
in
excess
of
85%
of
the
Fund.
Investment
activities
of
this
shareholder
could
have
a
material
impact
to
the
Fund.
9.
Recent
Regulatory
Pronouncements
Effective
January
24,
2023,
the
SEC
adopted
rule
and
form
amendments
that
require
open-end
management
investment
companies
to
transmit
concise
and
visually
engaging
annual
and
semi-annual
reports
to
shareholders
that
highlight
key
information.
Other
information,
including
financial
statements,
will
no
longer
appear
in
a
tailored
shareholder
report
but
must
be
available
online,
delivered
free
of
charge
upon
request,
and
filed
on
a
semi-annual
basis
on
Form
N-CSR.
The
rule
and
form
amendments
have
a
compliance
date
of
July
24,
2024.
Accordingly,
the
rule
and
form
amendments
will
not
impact
the
Fund
until
the
2024
semi-annual
shareholder
report
and
will
have
no
effect
on
the
Fund’s
accounting
policies
or
financial
statements.
10.
Subsequent
Events
Management
of
the
Fund
has
evaluated
the
need
for
additional
disclosures
or
adjustments
resulting
from
events
through
the
date
the
financial
statements
were
issued.
Based
on
this
evaluation,
there
were
no
subsequent
events
to
report
that
would
have
material
impact
on
the
Fund’s
financial
statements.
Unrealized
appreciation
$47,813,074
Unrealized
(depreciation)
(14,809,210)
Net
unrealized
appreciation/(depreciation)
$33,003,864
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
Moderate
Index
Strategy
Fund
$7,277,615
$5,115,924
$12,393,539
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
Moderate
Index
Strategy
Fund
$23,583,961
$21,582,597
$45,166,558
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Undistributed
Ordinary
Income
Undistributed
Long-Term
Capital
Gains
Accumulated
Capital
and
Other
Losses
Unrealized
Appreciation/
Depreciation(a)
Total
Accumulated
Earnings/
(Deficit)
AZL
MVP
Moderate
Index
Strategy
Fund
$11,777,923
$6,259,249
$—
$33,003,864
$51,041,036
(a)
The
differences
between
book-basis
and
tax-basis
unrealized
appreciation/(depreciation)
are
attributable
primarily
to
tax
deferral
of
losses
on
wash
sales,
mark-to-market
of
futures
contracts
and
straddles.
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
13
To
the
Board
of
Trustees
of
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
Shareholders
of
AZL
MVP
Moderate
Index
Strategy
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
schedule
of
portfolio
investments,
of
AZL
MVP
Moderate
Index
Strategy
Fund
(one
of
the
funds
constituting
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust,
referred
to
hereafter
as
the
"Fund")
as
of
December
31,
2023,
the
related
statement
of
operations
for
the
year
ended
December
31,
2023,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2023,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2023
by
correspondence
with
the
transfer
agent
and
brokers.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
/s/
PricewaterhouseCoopers
LLP
New
York,
New
York
February
22,
2024
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Allianz
Variable
Insurance
Products
complex
since
2018.
14
Other
Federal
Income
Tax
Information
(Unaudited)
For
the
year
ended
December
31,
2023,
43.13%
of
the
total
ordinary
income
dividends
paid
by
the
Fund
qualify
for
the
corporate
dividends
received
deductions
available
to
corporate
shareholders.
During
the
year
ended
December
31,
2023,
the
Fund
declared
net
long-term
capital
gain
distributions
of
$5,115,924.
15
Other
Information
(Unaudited)
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities
is
available,
without
charge,
upon
request,
by
visiting
the
Securities
and
Exchange
Commission’s
(‘‘Commission’’)
website
at
www.sec.gov,
or
by
calling
800-624-0197.
Information
regarding
how
the
Fund
voted
proxies
relating
to
portfolio
securities
during
the
most
recent
12-month
period
ended
June
30th
is
available
(i)
without
charge,
upon
request,
by
calling
800-624-0197;
(ii)
on
the
Trust’s
website
at
https://www.allianzlife.com;
and
(iii)
on
the
Commission’s
website
at
http://www.sec.gov
.
The
Fund
files
complete
Schedules
of
Portfolio
Holdings
with
the
Commission
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Schedules
of
Portfolio
Holdings
for
the
Fund
are
available
without
charge
on
the
Commission’s
website
at
http://www.sec.gov,
or
may
be
obtained
by
calling
800-624-0197.
16
Approval
of
Investment
Advisory
Agreement
(Unaudited)
Subject
to
the
general
supervision
of
the
Board
of
Trustees
(the
“Board”)
and
in
accordance
with
the
investment
objectives
and
restrictions
of
each
separate
series
(each
a
“Fund,”
together,
the
“Funds”)
of
the
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”),
investment
advisory
services
are
provided
to
the
Funds
by
Allianz
Investment
Management
LLC
(the
“Manager”).
The
Manager
manages
each
Fund
pursuant
to
an
investment
management
agreement
(the
“Management
Agreement”)
with
the
Trust
in
respect
of
each
such
Fund.
The
Management
Agreement
provides
that
the
Manager,
subject
to
the
supervision
and
approval
of
the
Board,
is
responsible
for
the
management
of
each
Fund.
For
management
services,
each
Fund
pays
the
Manager
an
investment
advisory
fee
based
upon
each
Fund’s
average
daily
net
assets.
The
Manager
has
contractually
agreed
to
limit
the
expenses
of
each
Fund
by
reimbursing
the
Fund
if
and
when
total
Fund
operating
expenses
exceed
certain
amounts
until
at
least
April
30,
2025
(the
“Expense
Limitation
Agreement”).
In
reviewing
the
services
provided
by
the
Manager
and
the
terms
of
the
Management
Agreement,
the
Board
receives
and
reviews
information
related
to
the
Manager’s
experience
and
expertise
in
the
variable
insurance
marketplace.
In
addition,
the
Board
receives
information
regarding
the
Manager’s
expertise
with
regard
to
portfolio
diversification
and
asset
allocation
requirements
within
variable
insurance
products
issued
by
Allianz
Life
Insurance
Company
of
North
America
(“Allianz
Life”)
and
its
subsidiary,
Allianz
Life
Insurance
Company
of
New
York
(“Allianz
of
New
York”).
Currently,
the
Funds
are
offered
only
through
Allianz
Life
and
Allianz
of
New
York
variable
products,
and
not
in
the
retail
fund
market.
As
required
by
the
Investment
Company
Act
of
1940
(the
“1940
Act”),
the
Board
has
reviewed
and
approved
the
Management
Agreement
with
the
Manager.
The
Board’s
decision
to
approve
this
contract
reflects
the
exercise
of
its
business
judgment
on
whether
to
approve
new
arrangements
and
continue
the
existing
arrangements.
During
its
review
of
the
contract,
the
Board
considered
many
factors,
among
the
most
material
of
which
are:
the
Fund’s
investment
objectives
and
long-term
performance;
the
Manager’s
management
philosophy,
personnel,
processes
and
investment
performance,
including
its
compliance
history
and
the
adequacy
of
its
compliance
processes;
the
preferences
and
expectations
of
Fund
shareholders
(and
underlying
contract
owners)
and
their
relative
sophistication;
the
continuing
state
of
competition
in
the
mutual
fund
industry;
and
comparable
fees
in
the
mutual
fund
industry.
The
Board
also
considered
the
compensation
and
benefits
received
by
the
Manager.
This
includes
fees
received
for
services
provided
to
a
Fund
by
employees
of
the
Manager
or
of
affiliates
of
the
Manager
and
research
services
received
by
the
Manager
from
brokers
that
execute
Fund
trades,
as
well
as
advisory
fees.
The
Board
considered
the
fact
that:
(1) the
Manager
and
the
Trust
are
parties
to
an
Administrative
Services
Agreement
and
a
Compliance
Services
Agreement,
under
which
the
Manager
is
compensated
by
the
Trust
for
performing
certain
administrative
and
compliance
services
including
providing
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer;
and
(2) Allianz
Life
Financial
Services,
LLC,
an
affiliated
person
of
the
Manager,
is
a
registered
securities
broker-dealer
and
received
(along
with
its
affiliated
persons)
payments
made
by
the
underlying
funds
pursuant
to
Rule 12b1.
The
Board
is
aware
that
various
courts
have
interpreted
provisions
of
the
1940
Act
and
have
indicated
in
their
decisions
that
the
following
factors
may
be
relevant
to
an
adviser’s
compensation:
the
nature,
extent
and
quality
of
the
services
provided
by
the
adviser,
including
the
performance
of
the
fund;
the
adviser’s
cost
of
providing
the
services;
the
extent
to
which
the
adviser
may
realize
“economies
of
scale”
as
the
fund
grows
larger;
any
indirect
benefits
that
may
accrue
to
the
adviser
and
its
affiliates
as
a
result
of
the
adviser’s
relationship
with
the
fund;
performance
and
expenses
of
comparable
funds;
the
profitability
of
acting
as
adviser
to
the
fund;
and
the
extent
to
which
the
independent
Board
members,
who
are
not
“interested
persons”
of
a
fund
as
defined
by
the
1940
Act
(“Independent
Trustees”),
are
fully
informed
about
all
facts
bearing
on
the
adviser’s
services
and
fees.
The
Board
is
aware
of
these
factors
and
takes
them
into
account
in
its
review
of
the
Management
Agreement
for
the
Funds.
Each
member
of
the
Board
considered
and
weighed
these
factors
in
light
of
his
or
her
experience
in
governing
the
Trust.
The
Board
is
assisted
in
its
deliberations
by
the
advice
of
independent
legal
counsel
to
the
Independent
Trustees
(“Independent
Trustee
Counsel”).
In
this
regard,
the
Board
requests
and
receives
a
significant
amount
of
information
about
the
Funds
and
the
Manager.
Some
of
this
information
is
provided
at
each
regular
meeting
of
the
Board;
additional
information
is
provided
in
connection
with
the
particular
meetings
at
which
the
Board’s
formal
review
of
the
Management
Agreement
occurs.
In
between
regularly
scheduled
meetings,
the
Board
may
receive
information
on
particular
matters
as
the
need
arises.
Thus,
the
Board’s
evaluation
of
the
Management
Agreement
is
informed
by
reports
covering
such
matters
as:
the
Manager’s
investment
philosophy,
personnel
and
processes,
and
the
Fund’s
investment
performance
(in
absolute
terms
as
well
as
in
relationship
to
its
benchmark
and
certain
competitor
or
“peer
group”
funds).
In
connection
with
comparing
the
performance
of
each
Fund
versus
its
benchmark,
the
Board
receives
reports
on
the
extent
to
which
the
Fund’s
performance
may
be
attributed
to
various
applicable
factors,
such
as
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
rebalancing
decisions,
and
the
impact
of
cash
positions
and
Fund
fees
and
expenses.
The
Board
also
receives
reports
on
the
Funds’
expenses
(including
the
advisory
fee
itself
and
the
overall
expense
structure
of
the
Funds,
both
in
absolute
terms
and
relative
to
peer
group
and/or
competing
funds,
with
due
regard
for
the
Expense
Limitation
Agreement
and
additional
voluntary
expense
limitations);
the
use
and
allocation
of
any
brokerage
commissions
derived
from
trading
the
Funds’
portfolio
securities;
the
nature,
extent
and
quality
of
the
advisory
and
other
services
provided
to
the
Fund
by
the
Manager
and
its
affiliates;
compliance
and
audit
reports
concerning
the
Funds
and
the
companies
that
service
them;
and
relevant
developments
in
the
mutual
fund
industry
and
how
the
Funds
and/or
the
Manager
are
responding
to
them.
The
Board
also
receives
financial
information
about
the
Manager,
including
reports
on
the
compensation
and
benefits
the
Manager
derives
from
its
relationships
with
the
Funds.
These
reports
cover
not
only
the
fees
under
the
Management
Agreement,
but
also
the
fees,
if
any,
received
for
providing
other
services
to
the
Funds.
The
reports
also
discuss
any
indirect
or
“fall-out”
benefits
the
Manager
or
its
affiliates
may
derive
from
their
relationships
with
the
Funds.
The
Management
Agreement
was
most
recently
considered
at
Board
meetings
held
in
the
summer
and
fall
of
2023.
Information
relevant
to
the
approval
of
the
Management
Agreement
was
considered
at
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
as
well
as
at
various
other
meetings
preceding
those
meetings.
Accordingly,
the
Management
Agreement
was
approved
by
the
Board
at
an
in-person
meeting
on
September
19,
2023.
At
such
meeting
the
Board
also
approved
the
Expense
Limitation
Agreement
between
the
Manager
and
the
Trust
for
the
period
ending
April 30,
2025.
In
connection
with
such
meetings,
the
Board
requested
and
evaluated
extensive
materials
from
the
Manager,
including
performance
and
expense
information
for
other
investment
companies
with
similar
investment
objectives
derived
from
data
compiled
by
an
independent
third-party
provider
and
other
sources
believed
to
be
reliable
by
the
Manager
and
the
Trustees.
Prior
to
voting,
the
Trustees
reviewed
the
proposed
approval
of
the
Management
Agreement
with
management
and
with
Independent
Trustee
Counsel
and
received
a
memorandum
from
such
counsel
discussing
the
legal
standards
for
their
consideration
of
the
proposed
approval.
The
Independent
Trustees
also
discussed
the
proposed
approval
in
private
sessions
with
Independent
Trustee
Counsel
at
which
no
representatives
of
the
Manager
were
present.
In
reaching
their
determinations
relating
to
the
approval
of
the
Management
Agreement,
in
respect
of
each
Fund,
each
member
of
the
Board
considered
all
factors
he
or
she
believed
relevant.
The
Board
based
its
decision
to
approve
17
the
Management
Agreement
on
the
totality
of
the
circumstances
and
relevant
factors,
and
with
a
view
to
past
and
future
long-term
considerations.
Not
all
of
the
factors
and
considerations
discussed
above
and
below
are
necessarily
relevant
to
every
Fund,
and
the
Board
did
not
assign
relative
weights
to
factors
discussed
herein
or
deem
any
one
or
group
of
them
to
be
controlling
in
and
of
themselves.
Shareholder
reports
must
include
a
discussion
of
certain
factors
relating
to
the
selection
of
the
investment
adviser
and
the
approval
of
the
advisory
fee.
The
“factors”
enumerated
by
the
SEC
are
set
forth
below
in
italics,
as
well
as
the
Board’s
conclusions
regarding
such
factors:
(1)
The
nature,
extent
and
quality
of
services
provided
by
the
Manager.
The
Trustees
noted
that
the
Manager,
subject
to
the
oversight
of
the
Board,
administers
each
Fund’s
business
and
other
affairs.
The
Trustees
noted
that
the
Manager
also
provides
the
Trust
and
each
Fund
with
such
administrative
and
other
services
(exclusive
of,
and
in
addition
to,
any
such
services
provided
by
any
other
service
providers
retained
by
the
Trust
on
behalf
of
the
Funds)
and
executive
and
other
personnel
as
are
necessary
for
the
operation
of
the
Trust
and
the
Funds.
Except
for
the
Trust’s
Chief
Compliance
Officer
and
certain
compliance
staff,
the
Manager
pays
all
of
the
compensation
of
Trustees
and
officers
of
the
Trust
who
are
employees
of
the
Manager
or
its
affiliates.
The
Board
considered
the
scope
and
quality
of
services
provided
by
the
Manager
and
noted
that
the
scope
of
the
services
provided
has
continued
to
expand
as
a
result
of
regulatory
and
other
developments.
The
Board
noted,
for
example,
that
the
Manager
is
responsible
for
maintaining
and
monitoring
its
own
compliance
program,
and
this
compliance
program
has
been
continuously
refined
and
enhanced
in
light
of
new
regulatory
requirements.
The
Board
considered
the
capabilities
and
resources
which
the
Manager
has
dedicated
to
performing
services
on
behalf
of
the
Trust
and
its
Funds.
The
quality
of
administrative
and
other
services,
including
the
Manager’s
role
in
coordinating
the
activities
of
the
Trust’s
other
service
providers,
also
were
considered.
The
Board
concluded
that,
overall,
they
were
satisfied
with
the
nature,
extent
and
quality
of
services
provided
(and
expected
to
be
provided)
to
the
Trust
and
to
each
of
the
Funds
under
the
Management
Agreement.
(2)
The
investment
performance
of
the
Funds
and
the
Manager.
In
connection
with
every
quarterly
Board
meeting
and
the
summer
and
fall
2023
contract
review
process,
Trustees
received
extensive
information
on
the
performance
results
of
each
Fund.
This
included,
for
example,
performance
information
on
absolute
total
return,
performance
versus
the
appropriate
benchmark(s)
and
performance
versus
peer
groups
as
reported
by
Lipper,
the
contribution
to
performance
of
the
Manager’s
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
and
the
impact
on
performance
of
rebalancing
decisions,
cash
and
Fund
fees.
This
included
Lipper
performance
information
on
the
Funds
for
the
previous
quarter,
and
previous
one-,
three-
and
five-year
periods,
to
the
extent
available.
For
example,
in
connection
with
the
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
the
Manager
reported
that,
for
the
five-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
reported
that
for
the
three-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
four
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
also
reported
on
the
performance
of
the
MVP
Funds
compared
to
custom
managed-volatility
peer
groups.
For
the
five-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
middle
20%
of
its
respective
custom
managed-volatility
peer
group.
For
the
three-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%
and
three
were
in
the
middle
20%
of
their
respective
custom
managed-volatility
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
bottom
40%
of
its
respective
custom
managed-volatility
peer
group.
The
Board
members
discussed
with
the
Manager
and
considered
the
impact
of
the
volatility
management
strategies
on
performance
in
different
market
environments,
where
applicable,
and
considered
whether
they
were
operating
as
intended.
The
Board
noted,
in
particular,
the
impact
on
longer-term
performance
of
certain
characteristics
of
the
Funds’
volatility
management
strategies
in
relation
to
volatility
experienced
as
a
result
of
the
COVID-19
pandemic,
and
that
relative
performance
had
improved
as
the
markets
stabilized.
At
the
Board
meeting
held
September
19,
2023,
the
Board
also
received
updated
performance
information
for
the
Funds,
including
updated
Lipper
peer
group
ranking
information,
for
various
periods
ending
June
30,
2023.
At
the
Board
meeting
held
September
19,
2023,
the
Trustees
determined
that
the
investment
performance
of
the
Funds
was
acceptable.
(3)
The
costs
of
services
to
be
provided
and
profits
to
be
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Funds.
The
Board
considered
that
the
Manager
receives
an
advisory
fee
from
each
of
the
Funds.
The
Manager
reported
that
for
the
four
MVP
Index
Strategy
Funds,
the
advisory
fee
paid
was
in
the
31st
percentile
of
the
customized
peer
group,
and
for
the
AZL
Balanced
Index
Strategy
Fund,
the
advisory
fee
paid
was
in
the
8th
percentile
of
the
customized
peer
group.
The
Manager
reported
that
for
the
AZL
DFA
Multi-Strategy
Fund,
the
advisory
fee
paid
was
in
the
6th
percentile.
The
Manager
reported
that
for
the
AZL
MVP
DFA
Multi-Strategy,
AZL
MVP
FIAM
Multi-Strategy,
and
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Funds,
the
advisory
fee
paid
was
in
the
1st
percentile.
(A
lower
percentile
reflects
lower
fund
fees
and
is
better
for
fund
shareholders.)
Trustees
were
provided
with
information
on
the
total
expense
ratios
of
the
Funds
and
other
funds
in
the
customized
peer
groups,
and
the
Manager
reported
upon
the
challenges
in
making
peer
group
comparisons
for
the
Funds.
The
Board
further
considered
and
found
that
the
advisory
fee
paid
to
the
Manager
with
respect
to
each
Fund
was
based
on
services
provided
to
the
Fund
that
were
in
addition
to,
rather
than
duplicative
of,
the
services
provided
pursuant
to
the
advisory
agreements
for
the
underlying
funds
in
which
the
Fund
invests.
The
Manager
provided
information
concerning
the
profitability
of
the
Manager’s
investment
advisory
activities
for
the
period
from
2020
through
2022.
The
Board
recognized
that
it
is
difficult
to
make
comparisons
of
profitability
from
investment
company
advisory
agreements
because
comparative
information
is
not
generally
publicly
available
and
is
affected
by
numerous
factors,
including
the
structure
of
the
particular
adviser,
the
types
of
funds
it
manages,
its
business
mix,
numerous
assumptions
regarding
allocation
of
expenses
and
the
adviser’s
capital
structure
and
cost
of
capital.
In
considering
profitability
information,
the
Board
considered
the
possible
effect
of
certain
fall-out
benefits
to
the
Manager
and
its
affiliates.
The
Board
focused
on
profitability
of
the
Manager’s
relationships
with
the
Funds
before
taxes
and
distribution
expenses.
The
Board
recognized
that
the
Manager
should
earn
a
reasonable
level
of
profits
for
the
services
it
provides
to
each
Fund.
(4)
and
(5)
The
extent
to
which
economies
of
scale
would
be
realized
as
the
Funds
grow,
and
whether
fee
levels
reflect
these
economies
of
scale.
The
Board
noted
that
the
advisory
fee
schedules
for
the
Funds
do
not
contain
breakpoints
that
reduce
the
fee
rate
on
assets
above
specified
levels.
The
Board
recognized
that
breakpoints
may
be
an
appropriate
way
for
the
Manager
to
share
its
economies
of
scale,
if
any,
with
Funds
that
have
substantial
assets.
The
Board
found
there
was
no
uniform
methodology
for
establishing
breakpoints
that
give
effect
to
Fund-specific
services
provided
by
the
Manager.
The
Board
noted
that
in
the
fund
industry
as
a
whole,
as
well
as
among
funds
similar
to
the
Funds,
there
is
no
uniformity
or
pattern
in
the
fees
and
asset
levels
at
which
breakpoints
(if
any)
apply.
Depending
on
the
age,
size,
and
other
characteristics
of
a
particular
fund
and
its
manager’s
cost
structure,
different
conclusions
can
be
drawn
as
to
whether
there
are
economies
of
scale
to
be
realized
at
any
particular
level
of
assets,
notwithstanding
the
intuitive
conclusion
that
such
economies
exist,
or
will
be
realized
at
some
level
of
total
assets.
Moreover,
because
different
managers
have
different
cost
structures
and
service
models,
it
is
difficult
to
draw
meaningful
18
conclusions
from
the
breakpoints
that
may
have
been
adopted
by
other
funds.
The
Board
also
noted
that
the
advisory
agreements
for
many
funds
do
not
have
breakpoints
at
all,
or
if
breakpoints
exist,
they
may
be
at
asset
levels
significantly
greater
than
those
of
the
individual
Funds.
The
Board
noted
that
the
total
assets
in
all
of
the
Funds,
as
of
June
30,
2023,
were
approximately
$7.8 billion
and
that
the
largest
Fund,
the
AZL
MVP
Growth
Index
Strategy
Fund,
had
assets
of
approximately
$2.0 billion.
The
Board
noted
that
the
Manager
has
agreed
to
temporarily
limit
Fund
expenses
under
the
Expense
Limitation
Agreement,
which
has
the
effect
of
reducing
expenses
similar
to
implementation
of
advisory
fee
breakpoints.
The
Manager
has
committed
to
continue
to
consider
the
continuation
of
expense
limits
and/or
advisory
fee
breakpoints
as
Fund
assets
change.
The
Board
receives
quarterly
reports
on
the
level
of
Fund
assets.
The
Board
expects
to
continue
to
consider:
(a) the
extent
to
which
economies
of
scale
have
been
realized,
and
(b) whether
the
advisory
fee
should
be
modified,
either
in
connection
with
the
next
renewal
of
the
Management
Agreement
or
by
modifying
the
Expense
Limitation
Agreement,
to
reflect
such
economies
of
scale,
if
any.
Having
taken
these
factors
into
account,
the
Board
concluded
that
the
absence
of
breakpoints
in
the
Funds’
advisory
fee
rate
schedules
was
acceptable
under
each
Fund’s
circumstances.
In
conclusion,
after
full
consideration
of
the
above
factors,
as
well
as
such
other
factors
as
each
member
of
the
Board
considered
instructive
in
evaluating
the
Management
Agreement,
the
Board
concluded
that
the
advisory
fees
were
reasonable,
and
that
the
continuation
of
the
Management
Agreement
was
in
the
best
interest
of
the
Funds.
19
Information
about
the
Board
of
Trustees
and
Officers
(Unaudited)
The
Trust
is
managed
by
the
Trustees
in
accordance
with
the
laws
of
the
state
of
Delaware
governing
business
trusts.
In
addition
to
serving
on
the
Board
of
Trustees
of
the
Trust,
each
Trustee
serves
on
the
Board
of
the
Allianz
Variable
Insurance
Products
Trust
(“VIP
Trust”)
and
the
AIM
ETF
Products
Trust
(“ETF
Trust”)
(collectively,
the
Trust,
the
VIP
Trust,
and
ETF
Trust
are
the
“AIM
Complex”).
There
are
currently
six
Trustees,
one
of
whom
is
an
“interested
person”
of
the
Trust
within
the
meaning
of
that
term
under
the
1940
Act.
The
Trustees
and
Officers
of
the
Trust,
their
addresses,
years
of
birth,
their
positions
held
with
the
Trust,
their
terms
of
office
with
the
Trust
and
length
of
time
served,
their
principal
occupation(s)
during
the
past
five
years,
the
number
of
portfolios
in
the
Trust
they
oversee,
and
their
other
directorships
held
during
the
past
five
years
are
as
follows:
Independent
Trustees
(
1)
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Peggy
L.
Ettestad
(1957)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Lead
Independent
Trustee
Since
10/14
(Trustee
since
2/07)
Managing
Director,
Red
Canoe
Management
Consulting
LLC,
2008
to
present
56
None
Tamara
Lynn
Fagely
(1958)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Chief
Operations
Officer,
Hartford
Funds,
2012
to
2013
56
Diamond
Hill
Funds
(10
Funds)
Richard
H.
Forde
(1953)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Member
of
the
Board
and
Chairman
of
the
Finance
and
Investment
Committee,
Connecticut
Water
Service,
Inc.,
2013
to
2019
56
Connecticut
Water
Service,
Inc.
Jack
Gee
(1959)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
01/22
Retired;
previously,
Managing
Director,
BlackRock,
Inc.,
Treasurer
and
Chief
Financial
Officer
U.S.
iShares,
2004
to
2019
56
TCW
ETF
Trust
(3
Funds);
Esoterica
Thematic
Trust
(2019
-
2020)
Claire
R.
Leonardi
(1955)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
02/04
Retired;
previously,
CEO,
Health
eSense
Inc.
(a
medical
device
company),
2015
to
2018,
and
Connecticut
Innovations,
Inc.
(a
venture
capital
firm),
2012
to
2015
56
None
20
Interested
Trustee
(
3)
(1)
Each
of
the
Independent
Trustees
is
a
member
of
the
Audit
and
Operational
Risk
Oversight
Committee.
(2)
Indefinite.
(3)
Is
an
“interested
person,”
as
defined
by
the
1940
Act,
due
to
employment
by
Allianz
Life
and
the
Manager.
Officers
(1)
Indefinite.
(2)
The
Manager
and
the
Trust
are
parties
to
a
Compliance
Services
Agreement
under
which
the
Manager
provides
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer.
The
Fund’s
Statement
of
Additional
Information
(“SAI”)
contains
additional
information
about
the
Trust’s
Trustees
and
Officers.
The
SAI
is
available
without
charge,
upon
request,
by
calling
toll-free
800-624-0197
or
at
https://www.allianzlife.com.
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
06/11
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
56
None
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(1)
/
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
President
Since
11/10
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
Amanda
Farren
(1978)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Secretary
Since
02/24
Chief
Legal
Officer,
Allianz
Investment
Management
LLC;
Senior
Counsel,
Allianz
Life,
January
2024
to
present;
Senior
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2023;
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2015
-2023
Bashir
C.
Asad
(1963)
Citi
Fund
Services
Ohio,
Inc.
4400
Easton
Commons,
Suite
200
Columbus,
OH
43219
Treasurer,
Principal
Accounting
Officer
and
Principal
Financial
Officer
Since
06/16
Senior
Vice
President,
Citi
Fund
Services
Ohio,
Inc.,
2011
to
present
Chris
R.
Pheiffer
(1968)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Chief
Compliance
Officer
(2)
and
Anti-Money
Laundering
Compliance
Officer
Since
02/14
Chief
Compliance
Officer
of
the
Trust
and
the
VIP
Trust,
2014
to
present,
and
the
ETF
Trust,
2020
to
present
Michael
Tanski
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
04/09
Assistant
Vice
President,
Allianz
Investment
Management
LLC,
2013
to
present.
Laura
Quade
(1969)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
08/23
Vice
President,
Allianz
Investment
Management
LLC,
2023
to
present,
previously
Director
at
Wealth
Enhancement
Group,
November
2019
to
November
2022;
Vice
President,
Head
of
Operations
at
Hartford
Funds
2014
to
2019
ANNRPT1223
02/24
The
Allianz
VIP
Fund
of
Funds
are
distributed
by
Allianz
Life
Financial
Services,
LLC.
These
Funds
are
not
FDIC
Insured.
AZL®
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
Annual
Report
December
31,
2023
Table
of
Contents
AZL®
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
Management
Discussion
and
Analysis
Page
1
Expense
Examples
and
Portfolio
Composition
Page
3
Schedule
of
Portfolio
Investments
Page
4
Statement
of
Assets
and
Liabilities
Page
5
Statement
of
Operations
Page
5
Statements
of
Changes
in
Net
Assets
Page
6
Financial
Highlights
Page
7
Notes
to
the
Financial
Statements
Page
8
Report
of
Independent
Registered
Public
Accounting
Firm
Page
13
Other
Federal
Income
Tax
Information
Page
14
Other
Information
Page
15
Approval
of
Investment
Advisory
Agreement
Page
16
Information
about
the
Board
of
Trustees
and
Officers
Page
19
This
report
is
submitted
for
the
general
information
of
the
shareholder
of
the
Fund.
The
report
is
not
authorized
for
distribution
to
prospective
investors
in
the
Fund
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
contains
details
concerning
the
sales
charges
and
other
pertinent
information.
1
AZL®
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
Review
(Unaudited)
Allianz
Investment
Management
LLC
serves
as
the
Manager
for
the
AZL
®
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund.
What
factors
affected
the
Fund’s
performance
during
the
year
ended
December
31,
2023?*
For
the
year
ended
December
31,
2023,
the
AZL®
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
(the
"Fund")
returned
17.36%.
That
compared
to
a
26.29%,
5.53%
and
a
17.71%
total
return
for
its
benchmarks,
the
S&P
500
Index,
the
Bloomberg
U.S.
Aggregate
Bond
Index,
and
the
Moderate
Composite
Index,
respectively.
1
AZL
MVP
T.
Rowe
Price
Cap
Appreciation
Plus
Fund
is
a
fund
of
funds
that
invests
primarily
in
a
combination
of
three
underlying
mutual
funds
(the
“Underlying
Funds”).
The
Fund
is
designed
to
provide
a
diversified
portfolio
consisting
of
underlying
funds
in
equity
and
fixed
income
asset
classes.
The
Fund
also
employs
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process,
which
is
intended
to
adjust
the
risk
of
the
portfolio
based
on
quantitative
indicators
of
market
risk,
such
as
the
current
level
of
Fund
and
market
volatility.
Thanks
to
generally
favorable
corporate
earnings,
a
resilient
economy
and
increased
investor
interest
in
artificial
intelligence
(AI),
U.S.
stocks
produced
strong
gains
in
2023.
These
gains
were
driven
by
a
handful
of
high-growth,
technology-oriented,
mega-cap
companies.
Long-term
U.S.
Treasury
yields
climbed
for
much
of
the
year,
peaking
in
late
October,
before
falling
sharply
in
response
to
weaker-than-expected
inflation
and
labor
market
data.
Equities
rallied
toward
the
end
of
the
year
as
Federal
Reserve
officials
projected
potential
interest
rate
cuts
in
2024.
The
equity
portion
of
the
Fund
performed
in
line
with
the
S&P
500
Index.
Meanwhile,
its
fixed
income
holdings
outperformed
the
Bloomberg
U.S.
Aggregate
Bond
Index.
Within
equities,
an
underweight
to
consumer
staples
and
stock
selection
in
industrials
and
business
services
were
the
biggest
contributors
to
relative
performance.
Overweight
positions
in
the
health
care
and
utilities
sectors
detracted
from
relative
results.
Within
fixed
income,
the
Fund’s
above-benchmark
exposure
to
bank
loans
and
high-yield
bonds
lifted
relative
results,
as
they
were
the
best
performing
areas
of
fixed
income
markets
during
the
year.
The
Fund’s
exposure
to
equities
remained
about
the
same
during
the
year,
while
its
overall
weight
in
fixed
income
slightly
declined,
as
the
Underlying
Fund’s
exposure
to
bank
loans
decreased
during
the
year.
During
the
year,
the
Fund
had
exposure
to
covered
call
options,
a
type
of
derivative
that
provides
downside
protection
for
the
portfolio.
The
Fund’s
exposure
to
a
covered
call
strategy
made
a
moderately
positive
contribution
to
returns.
The
MVP
risk
management
process
uses
derivatives
to
seek
to
control
portfolio
volatility
in
unstable
market
conditions.
The
MVP
process
was
engaged
during
the
year
and
reduced
the
Fund’s
equity
exposure
at
multiple
points
during
the
year.
The
MVP
process
slightly
detracted
from
the
Fund’s
performance
during
2023.
Past
performance
does
not
guarantee
future
results.
*
The
Fund’s
portfolio
composition
is
subject
to
change.
There
is
no
guarantee
that
any
sectors
mentioned
will
continue
to
perform
as
described
or
that
securities
in
such
sectors
will
be
held
by
the
Fund
in
the
future.
The
information
contained
in
this
commentary
is
for
informational
purposes
only
and
should
not
be
construed
as
a
recommendation
to
purchase
or
sell
securities
in
the
sector
mentioned.
The
Fund’s
holdings
and
weightings
are
as
of
December
31,
2023.
1
For
a
complete
description
of
the
Fund’s
performance
benchmark
please
refer
to
page
2
of
this
report.
2
AZL®
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
Review
(Unaudited)
Fund
Objective
The
Fund’s
investment
objective
is
to
seek
long-term
capital
appreciation
with
preservation
of
capital
as
an
important
intermediate-term
objective.
This
objective
may
be
changed
by
the
Trustees
of
the
Fund
without
shareholder
approval.
The
Fund
seeks
to
achieve
its
objective
by
investing
in
a
combination
of
Underlying
Funds
that
represent
different
classes
in
the
Fund’s
asset
allocation.
Investment
Concerns
The
Fund
invests
in
underlying
funds,
so
its
investment
performance
is
directly
related
to
the
performance
of
those
underlying
funds.
Before
investing,
investors
should
assess
the
risks
associated
with
and
types
of
investments
made
by
each
of
the
underlying
funds
in
which
the
Fund
invests.
The
performance
of
the
underlying
funds
is
expected
to
be
lower
than
that
of
the
Indexes
because
of
fees
and
expenses.
Securities
in
which
the
underlying
funds
will
invest
may
involve
substantial
risk
and
may
be
subject
to
sudden
severe
price
declines.
Quantitative
investing
involves
risk
that
the
values
of
securities
selected
in
the
quantitative
analysis
can
react
differently
than
the
market
or
securities
selected
using
fundamental
analysis.
Stocks
are
more
volatile
and
carry
more
risk
than
other
forms
of
investments,
including
investments
in
high-grade
fixed
income
securities.
Small-
to
mid-capitalization
companies
typically
have
a
higher
risk
of
failure
and
historically
have
experienced
a
greater
degree
of
volatility.
International
investing
may
involve
risk
of
capital
loss
from
unfavorable
fluctuations
in
currency
values,
from
differences
in
generally
accepted
accounting
principles
or
from
economic
or
political
instability
in
other
nations.
Investing
in
a
single
industry
or
sector,
or
concentrating
investments
in
a
limited
number
of
industries
or
sectors,
tends
to
increase
the
risk
that
economic,
political,
or
regulatory
developments
affecting
certain
industries
or
sectors
will
have
a
large
impact
on
the
value
of
the
portfolio.
High-yield
bonds
have
a
higher
risk
of
default
or
other
adverse
credit
events,
but
have
the
potential
to
pay
higher
earnings
over
investment-grade
bonds.
The
higher
risk
of
default,
or
the
inability
of
the
creditor
to
repay
its
debt,
is
the
primary
reason
for
the
higher
interest
rates
on
high-yield
bonds.
Mortgage-backed
investments
involve
risk
of
loss
due
to
prepayments
and,
like
any
bond,
due
to
default.
Because
of
the
sensitivity
of
mortgage-
related
securities
to
changes
in
interest
rates,
an
underlying
fund’s
performance
may
be
more
volatile
than
if
it
did
not
hold
these
securities.
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
Investing
in
derivative
instruments
involves
risks
that
may
be
different
from
or
greater
than
the
risk
associated
with
investing
directly
in
securities
or
other
traditional
instruments.
For
a
complete
description
of
these
and
other
risks
associated
with
investing
in
the
Fund,
please
refer
to
the
Fund’s
prospectus.
Growth
of
$10,000
Investment
The
chart
above
represents
a
comparison
of
a
hypothetical
investment
in
the
Fund
versus
a
similar
investment
in
the
Fund’s
benchmarks
and
represents
the
reinvestment
of
dividends
and
capital
gains
in
the
Fund.
Past
performance
does
not
guarantee
future
results.
The
performance
data
quoted
represents
past
performance
and
current
returns
may
be
lower
or
higher.
The
investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
the
original
cost.
To
obtain
performance
information
current
to
the
most
recent
month
end,
please
visit
www.Allianzlife.com.
The
above
expense
ratio
is
based
on
the
current
Fund
prospectus
dated
May
1,
2023.
The
Manager
and
the
Fund
have
entered
into
a
written
agreement
limiting
operating
expenses,
excluding
certain
expenses
(such
as
interest
expense
and
acquired
fund
fees
and
expenses),
to
0.15%
through
April
30,
2025.
Additional
information
pertaining
to
the
December
31,
2023
expense
ratio
can
be
found
in
the
Financial
Highlights.
Acquired
fund
fees
and
expenses
are
incurred
indirectly
by
the
Fund
through
the
valuation
of
the
Fund’s
investments
in
the
permitted
Underlying
Funds.
Accordingly,
acquired
fund
fees
and
expenses
affect
the
Fund’s
total
returns.
Because
these
fees
and
expenses
are
not
included
in
the
Fund’s
financial
highlights,
the
Fund’s
total
annual
fund
operating
expenses,
as
shown
in
the
current
prospectus,
do
not
correlate
to
the
ratios
of
expenses
to
average
net
assets
shown
in
the
Financial
Highlights.
Without
acquired
fund
fees
and
expenses
the
Fund’s
gross
expense
ratio
would
be
0.12%.
The
total
return
of
the
Fund
does
not
reflect
the
effect
of
any
insurance
charges,
the
annual
maintenance
fee
or
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Such
charges,
fees
and
tax
payments
would
reduce
the
performance
quoted.
The
Fund’s
performance
is
measured
against
the
Standard
and
Poor’s
500
Index
(“S&P
500”),
the
Bloomberg
U.S.
Aggregate
Bond
Index
and
the
Moderate
Composite
Index
(“Composite”).
The
S&P
500
is
representative
of
500
selected
common
stocks,
most
of
which
are
listed
on
the
New
York
Stock
Exchange,
and
is
a
measure
of
the
U.S.
Stock
market
as
a
whole.
The
Bloomberg
U.S.
Aggregate
Bond
Index
is
a
market
value-
weighted
performance
benchmark
for
investment-grade
fixed-rate
debt
issues,
including
government,
corporate,
asset-backed,
and
mortgage-
backed
securities,
with
maturities
of
at
least
one
year.
The
Composite
is
a
blended
index
comprised
of
(60%)
of
the
S&P
500
and
(40%)
of
the
Bloomberg
U.S.
Aggregate
Bond
Index.
These
indexes
are
unmanaged
and
do
not
reflect
the
deduction
of
fees
associated
with
a
mutual
fund,
such
as
investment
management
and
fund
accounting
fees.
The
Fund’s
performance
reflects
the
deduction
of
fees
for
services
provided
to
the
Fund.
Investors
cannot
invest
directly
in
an
index.
Average
Annual
Total
Returns
as
of
December
31,
2023
1
Year
3
Years
5
Years
Since
Inception
(1/10/2014)
AZL
®
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
17.36%
5.83%
9.22%
8.10%
Bloomberg
U.S.
Aggregate
Bond
Index
5.53%
(3.31)%
1.10%
1.74%
Moderate
Composite
Index
17.71%
4.70%
10.09%
8.14%
S&P
500
Index
26.29%
10.00%
15.69%
12.09%
Expense
Ratio
Gross
AZL
®
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
0.86%
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
3
Expense
Examples
(Unaudited)
As
a
shareholder
of
the
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
(the
“Fund”),
you
incur
ongoing
costs,
including
management
fees,
distribution
fees,
and
other
Fund
expenses.
These
examples
are
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
Please
note
that
the
expenses
shown
in
each
table
do
not
reflect
expenses
that
apply
to
the
subaccount
or
the
insurance
contract.
If
the
expenses
that
apply
to
the
subaccount
or
the
insurance
contract
were
included,
your
costs
would
have
been
higher.
These
examples
are
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
periods
presented
below.
The
Actual
Expense
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
below,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
table
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
this
period.
The
Hypothetical
Expense
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
$1,000.00
$1,062.00
$0.68
0.13%
Beginning
Account
Value
7/1/23
Ending
Account
Value
12/31/23
Expenses
Paid
During
Period
7/1/23
-
12/31/23*
Annualized
Expense
Ratio
During
Period
7/1/23
-
12/31/23
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
$1,000.00
$1,024.55
$0.66
0.13%
*
Expenses
are
equal
to
the
average
account
value
multiplied
by
the
Fund's
annualized
expense
ratio
multiplied
by
184/365
(the
number
of
days
in
the
most
recent
fiscal
half-year
divided
by
the
number
of
days
in
the
fiscal
year).
Portfolio
Composition
(Unaudited)
Investments
Percent
of
Net
Assets
Domestic
Equity
Funds
77
.1
%
Fixed
Income
Fund
18
.0
Total
Investment
Securities
95
.1
Net
other
assets
(liabilities)
4
.9
Net
Assets
100
.0
%
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
Schedule
of
Portfolio
Investments
December
31,
2023
4
See
accompanying
notes
to
the
financial
statements.
Percentages
indicated
are
based
on
net
assets
as
of
December
31,
2023
.
Shares
Value
Affiliated
Investment
Companies
(
95
.1
%
):
Domestic
Equity
Funds
(
77
.1
%
):
15,536,477
AZL
S&P
500
Index
Fund,
Class
2
$
313,370,744
35,411,777
AZL
T.
Rowe
Price
Capital
Appreciation
Fund
580,753,144
894,123,888
1
Shares
Value
Affiliated
Investment
Companies,
continued
Fixed
Income
Fund
(
18
.0
%
):
21,265,411
AZL
Enhanced
Bond
Index
Fund
$
208,826,331
Total
Affiliated
Investment
Companies
(Cost
$1,005,617,257)
1,102,950,219
Total
Investment
Securities
(Cost
$1,005,617,257)
—
95.1%(a)
1,102,950,219
Net
other
assets
(liabilities)
—
4.9%
57,276,605
Net
Assets
—
100.0%
$
1,160,226,824
(a)
See
Federal
Tax
Information
listed
in
the
Notes
to
the
Financial
Statements.
Futures
Contracts
At
December
31,
2023,
the
Fund's
open
futures
contracts
were
as
follows:
Long
Futures
Description
Expiration
Date
Number
of
Contracts
Notional
Amount
Value
and
Unrealized
Appreciation/
(Depreciation)
S&P
500
Index
E-Mini
March
Futures
(U.S.
Dollar)
3/15/24
144
$
34,704,000
$
1,145,732
U.S.
Treasury
10-Year
Note
March
Futures
(U.S.
Dollar)
3/19/24
206
23,255,469
719,553
$
1,865,285
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
5
See
accompanying
notes
to
the
financial
statements.
Statement
of
Assets
and
Liabilities
December
31,
2023
Statement
of
Operations
For
the
Year
Ended
December
31,
2023
Assets:
Investments
in
affiliates,
at
cost
$
1,005,617,257
Investments
in
affiliates,
at
value
$
1,102,950,219
Deposit
at
broker
for
futures
contracts
collateral
57,998,360
Interest
and
dividends
receivable
204,672
Receivable
for
affiliated
investments
sold
446,159
Receivable
for
variation
margin
on
futures
contracts
217
Prepaid
expenses
5,265
Total
Assets
1,161,604,892
Liabilities:
Cash
overdraft
446,159
Payable
for
capital
shares
redeemed
793,023
Management
fees
payable
97,361
Administration
fees
payable
8,394
Custodian
fees
payable
5,954
Administrative
and
compliance
services
fees
payable
1,461
Transfer
agent
fees
payable
798
Trustee
fees
payable
6,063
Other
accrued
liabilities
18,855
Total
Liabilities
1,378,068
Commitments
and
contingent
liabilities^
Net
Assets
$
1,160,226,824
Net
Assets
Consist
of:
Paid
in
capital
$
1,032,592,285
Total
distributable
earnings
127,634,539
Net
Assets
$
1,160,226,824
Shares
of
beneficial
interest
(unlimited
number
of
shares
authorized,
no
par
value)
96,075,892
Net
Asset
Value
(offering
and
redemption
price
per
share)
$
12.08
^
See
Note
3
in
Notes
to
the
Financial
Statements.
Investment
Income:
Dividends
from
affiliates
$
14,831,210
Interest
2,462,818
Dividends
from
non-affiliates
23,432
Total
Investment
Income
17,317,460
Expenses:
Management
fees
1,158,377
Administration
fees
92,647
Custodian
fees
33,071
Administrative
and
compliance
services
fees
16,144
Transfer
agent
fees
7,999
Trustee
fees
66,138
Professional
fees
63,613
Shareholder
reports
11,531
Other
expenses
22,400
Total
expenses
1,471,920
Net
Investment
Income/(Loss)
15,845,540
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments:
Net
realized
gains/(losses)
on
affiliated
underlying
funds
(
213,682
)
Net
realized
gains
distributions
from
affiliated
underlying
funds
85,814,210
Net
realized
gains/(losses)
on
futures
contracts
769,261
Change
in
net
unrealized
appreciation/depreciation
on
affiliated
underlying
funds
80,576,169
Change
in
net
unrealized
appreciation/depreciation
on
futures
contracts
2,139,460
Net
realized
and
Change
in
net
unrealized
gains/losses
on
investments
169,085,418
Change
in
Net
Assets
Resulting
From
Operations
$
184,930,958
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
6
See
accompanying
notes
to
the
financial
statements.
Statements
of
Changes
in
Net
Assets
For
the
Year
Ended
December
31,
2023
For
the
Year
Ended
December
31,
2022
Change
In
Net
Assets:
Operations:
Net
investment
income/(loss)
$
15,845,540
$
10,681,859
Net
realized
gains/(losses)
on
investments
86,369,789
134,665,669
Change
in
unrealized
appreciation/depreciation
on
investments
82,715,629
(
343,676,062
)
Change
in
net
assets
resulting
from
operations
184,930,958
(
198,328,534
)
Distributions
to
Shareholders:
Distributions
(
91,615,841
)
(
163,081,942
)
Change
in
net
assets
resulting
from
distributions
to
shareholders
(
91,615,841
)
(
163,081,942
)
Capital
Transactions:
Proceeds
from
shares
issued
5,640,403
9,252,790
Proceeds
from
dividends
reinvested
91,615,841
163,081,942
Value
of
shares
redeemed
(
182,678,389
)
(
136,568,768
)
Change
in
net
assets
resulting
from
capital
transactions
(
85,422,145
)
35,765,964
Change
in
net
assets
7,892,972
(
325,644,512
)
Net
Assets:
Beginning
of
period
1,152,333,852
1,477,978,364
End
of
period
$
1,160,226,824
$
1,152,333,852
Share
Transactions:
Shares
issued
473,809
697,803
Dividends
reinvested
8,321,148
14,678,843
Shares
redeemed
(
15,375,653
)
(
10,374,116
)
Change
in
shares
(
6,580,696
)
5,002,530
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
Financial
Highlights
(Selected
data
for
a
share
of
beneficial
interest
outstanding
throughout
the
periods
indicated.
Does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.)
7
See
accompanying
notes
to
the
financial
statements.
Year
Ended
December
31,
2023
Year
Ended
December
31,
2022
Year
Ended
December
31,
2021
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Net
Asset
Value,
Beginning
of
Period
$11.23
$15.13
$14.07
$13.85
$11.96
Investment
Activities:
Net
Investment
Income/(Loss)(a)
0.16
0.11
0.12
0.19
0.25
Net
Realized
and
Unrealized
Gains/(Losses)
on
Investments
1.69
(2.21
)
2.21
0.87
2.27
Total
from
Investment
Activities
1.85
(2.10
)
2.33
1.06
2.52
Distributions
to
Shareholders
From:
Net
Investment
Income
(1.00
)
(1.02
)
(0.55
)
(0.39
)
(0.25
)
Net
Realized
Gains
—
(0.78
)
(0.72
)
(0.45
)
(0.38
)
Total
Dividends
(1.00
)
(1.80
)
(1.27
)
(0.84
)
(0.63
)
Net
Asset
Value,
End
of
Period
$12.08
$11.23
$15.13
$14.07
$13.85
Total
Return
(b)
17.36
%
(13.71
)%
17.04
%
8.02
%
21.39
%
Ratios
to
Average
Net
Assets/Supplemental
Data:
Net
Assets,
End
of
Period
(000's)
$1,160,227
$1,152,334
$1,477,978
$1,372,669
$1,325,661
Net
Investment
Income/(Loss)
1.37
%
0.85
%
0.78
%
1.41
%
1.90
%
Expenses
Before
Reductions*(c)
0.13
%
0.12
%
0.12
%
0.12
%
0.12
%
Expenses
Net
of
Reductions*
0.13
%
0.12
%
0.12
%
0.12
%
0.12
%
Portfolio
Turnover
Rate
9
%
10
%
10
%
10
%
5
%
*
The
expense
ratios
exclude
the
impact
of
fees/expenses
paid
by
each
underlying
fund.
(a)
Calculated
using
the
average
shares
method.
(b)
The
returns
include
reinvested
dividends
and
fund
level
expenses,
but
exclude
insurance
contract
charges. If
these
charges
were
included,
the
returns
would
have
been
lower.
(c)
Excludes
fee
reductions. If
such
fee
reductions
had
not
occurred,
the
ratios
would
have
been
as
indicated.
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
Notes
to
the
Financial
Statements
December
31,
2023
8
1.
Organization
The
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”)
was
organized
as
a
Delaware
statutory
trust
on
June
16,
2004.
The
Trust
is
an
open-end
management
investment
company
registered
under
the
Investment
Company
Act
of
1940,
as
amended,
(the
“1940
Act”)
and
thus
is
determined
to
be
an
investment
company,
and
follows
the
investment
company
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946
“Financial
Services—Investment
Companies”.
The
Trust
consists
of 9
separate
investment
portfolios
(collectively,
the
“Funds”),
of
which
one
is
included
in
this
report,
the
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund (the
“Fund”),
and 8
are
presented
in
separate
reports.
The
Fund
is
a
diversified
series
of
the
Trust.
The
Fund
is
a
“fund
of
funds”,
which
means
that
the
Fund
invests
primarily
in
other
mutual
funds
(the
"Underlying
Funds").
Underlying
Funds
invest
in
stocks,
bonds,
and
other
securities
and
reflect
varying
amounts
of
potential
investment
risk
and
reward.
The
Underlying
Funds
record
their
investments
at
fair
value.
Periodically,
the
Fund
will
adjust
its
asset
allocation
as
it
seeks
to
achieve
its
investment
objective.
The
Trust
is
authorized
to
issue
an
unlimited
number
of
shares
of
the
Fund
without
par
value.
Shares
of
the
Fund
are
available
through
the
variable
annuity
contracts
offered
through
the
separate
accounts
of
participating
insurance
companies.
Currently,
the
Fund
only
offers
its
shares
to
separate
accounts
of
Allianz
Life
Insurance
Company
of
North
America
and
Allianz
Life
Insurance
Company
of
New
York,
affiliates
of
the
Trust
and
the
Manager,
as
defined
below.
Under
the
Trust’s
organizational
documents,
its
officers
and
trustees
are
indemnified
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
In
addition,
in
the
normal
course
of
business,
the
Fund
may
enter
into
contracts
with
its
vendors
and
others
that
provide
for
general
indemnifications.
The
Fund’s
maximum
exposure
under
these
arrangements
is
unknown,
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund.
However,
based
on
experience,
the
Fund
expects
that
risk
of
loss
to
be
remote.
2.
Significant
Accounting
Policies
The
following
is
a
summary
of
significant
accounting
policies
followed
by
the
Fund
in
the
preparation
of
its
financial
statements.
The
policies
conform
with
U.S.
generally
accepted
accounting
principles
(“U.S.
GAAP”).
The
preparation
of
financial
statements
requires
management
to
make
certain
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
and
disclosure
of
contingent
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
Security
Valuation
The
Fund
records
its
investments
at
fair
value.
Fair
value
is
defined
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
willing
market
participants
at
the
measurement
date.
The
valuation
techniques
used
to
determine
fair
value
are
further
described
in
Note
4
below.
Investment
Transactions
and
Investment
Income
Investment
transactions
are
accounted
for
on
trade
date.
Net
realized
gains
and
losses
on
investments
sold
and
on
foreign
currency
transactions
are
recorded
on
the
basis
of
identified
cost.
Interest
income
is
recorded
on
the
accrual
basis
and
includes,
where
applicable,
the
amortization
of
premiums
or
accretion
of
discounts.
Dividend
income
is
recorded
on
the
ex-
dividend
date
except
in
the
case
of
foreign
securities,
in
which
case
dividends
are
recorded
as
soon
as
such
information
becomes
available.
Distributions
to
Shareholders
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
The
Fund
distributes
its
dividends
from
net
investment
income
and
net
realized
capital
gains,
if
any,
on
an
annual
basis.
The
amount
of
distributions
from
net
investment
income
and
from
net
realized
gains
is
determined
in
accordance
with
federal
income
tax
regulations,
which
may
differ
from
U.S.
GAAP.
These
“book/tax”
differences
are
either
temporary
or
permanent
in
nature.
To
the
extent
these
differences
are
permanent
in
nature
(e.g.,
return
of
capital,
net
operating
loss,
reclassification
of
certain
market
discounts,
gain/loss,
paydowns,
and
distributions),
such
amounts
are
reclassified
within
the
composition
of
net
assets
based
on
their
federal
tax-basis
treatment;
temporary
differences
(e.g.,
wash
sales
and
differing
treatment
on
certain
investments)
do
not
require
reclassification.
Distributions
to
shareholders
that
exceed
net
investment
income
and
net
realized
gains
for
tax
purposes
are
reported
as
distributions
of
capital.
Expense
Allocation
Expenses
directly
attributable
to
the
Fund
are
charged
directly
to
the
Fund,
while
expenses
attributable
to
more
than
one
Fund
are
allocated
among
the
respective
Funds
based
upon
relative
net
assets
or
some
other
reasonable
method.
Expenses
which
are
attributable
to
more
than
one
Trust
are
allocated
across
the
Allianz
Variable
Insurance
Products
Trust,
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
AIM
ETF
Products
Trust
based
upon
relative
net
assets
or
another
reasonable
basis.
Allianz
Investment
Management
LLC
(the
“Manager”),
serves
as
the
investment
manager
for
the
Trust,
Allianz
Variable
Insurance
Products
Trust
and
AIM
ETF
Products
Trust.
This
report
does
not
reflect
fees
or
expenses
associated
with
the
separate
accounts
that
invest
in
the
Fund
or
in
any
variable
annuity
contracts
or
variable
life
insurance
policy
for
which
the
Fund
serves
as
an
investment
vehicle.
Affiliated
Securities
Transactions
Pursuant
to
Rule
17a-7
under
the
1940
Act,
the
Fund
may
engage
in
securities
transactions
with
affiliated
investment
companies
and
advisory
accounts
managed
by
the
Manager.
Any
such
purchase
or
sale
transaction
must
be
effected
without
a
brokerage
commission
or
other
remuneration,
except
for
customary
transfer
fees.
The
transaction
must
be
effected
at
the
current
market
price,
which
is
either
the
security’s
last
sale
price
on
an
exchange
or,
if
there
are
no
transactions
in
the
security
that
day,
at
the
average
of
the
highest
bid
and
lowest
asked
price.
During
the
year
ended
December
31,
2023,
the
Fund
did
not
engage
in
any
Rule
17a-7
transactions.
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
Notes
to
the
Financial
Statements
December
31,
2023
9
Derivative
Instruments
All
open
derivative
positions
at
period
end
are
reflected
on
the
Fund’s
Schedule
of
Portfolio
Investments.
The
following
is
a
description
of
the
derivative
instruments
utilized
by
the
Fund,
including
the
primary
underlying
risk
exposures
related
to
each
instrument
type.
The
Fund’s
allocation
to
the
MVP
(Managed
Volatility
Portfolio)
risk
management
process
may
include
(a)
derivatives
such
as
index
futures,
other
futures
contracts,
options,
and
other
similar
securities
and
(b)
cash,
money
market
equivalents,
short-term
debt
instruments,
money
market
funds,
and
short-term
debt
funds
to
satisfy
all
applicable
margin
requirements
and
to
provide
additional
portfolio
liquidity
to
satisfy
large
redemptions
and
any
margin
calls.
Due
to
the
leverage
provided
by
derivatives,
the
notional
value
of
the
Fund’s
derivative
positions
could
exceed
20%
of
the
Fund’s
value.
The
Fund
may
also
use
futures
to
gain
equity
exposure
and
may
hold
cash
as
a
buffer
in
the
event
of
market
shocks.
Futures
Contracts
During
the
year
ended
December
31,
2023,
the
Fund
invested
in
futures
contracts
to
reduce
volatility
and
limit
the
need
to
decrease
or
increase
allocations
to
underlying
funds.
Futures
contracts
are
valued
based
upon
their
quoted
daily
settlement
prices.
Upon
entering
into
a
futures
contract,
the
Fund
is
required
to
segregate
liquid
assets
in
accordance
with
the
initial
margin
requirements
of
the
broker
or
exchange.
Futures
contracts
are
marked
to
market
daily
and
a
payable
or
receivable
for
the
change
in
value
(“variation
margin”),
if
any,
is
recorded
by
the
Fund.
Gains
or
losses
are
recognized
but
not
considered
realized
until
the
contracts
expire
or
are
closed.
Futures
contracts
involve,
to
varying
degrees,
elements
of
market
risk
(generally
equity
price
risk
related
to
stock
futures,
interest
rate
risk
related
to
bond
futures,
and
foreign
currency
risk
related
to
currency
futures)
and
exposure
to
loss
in
excess
of
the
variation
margin
disclosed
in
the
Statement
of
Assets
and
Liabilities.
The
primary
risks
associated
with
the
use
of
futures
contracts
are
the
imperfect
correlation
between
the
change
in
value
of
the
underlying
securities
and
the
prices
of
futures
contracts,
the
possibility
of
an
illiquid
market,
and
the
inability
of
the
counterparty
to
meet
the
terms
of
the
contract.
For
the
year
ended
December
31,
2023,
the
monthly
average
notional
amount
for
long
contracts
was
$57.1
million.
There
was
limited
short
contract
activity
during
the
period.
Realized
gains
and
losses
are
reported
as
“Net
realized
gains/(losses)
on
futures
contracts”
on
the
Statement
of
Operations.
Summary
of
Derivative
Instruments
The
following
is
a
summary
of
the
values
of
derivative
instruments
on
the
Fund’s
Statement
of
Assets
and
Liabilities,
categorized
by
risk
exposure,
as
of
December
31,
2023:
The
following
is
a
summary
of
the
effect
of
derivative
instruments
on
the
Statement
of
Operations,
categorized
by
risk
exposure,
for
the
year
ended
December
31,
2023:
3.
Fees
and
Transactions
with
Affiliates
and
Other
Parties
The
Manager
provides
investment
advisory
and
management
services
for
the
Fund.
The
Manager
has
contractually
agreed
to
waive
fees
and
reimburse
the
Fund
to
limit
the
annual
expenses,
excluding
interest
expense
(e.g.,
cash
overdraft
fees),
taxes,
brokerage
commissions,
acquired
fund
fees
and
expenses,
other
expenditures
that
are
capitalized
in
accordance
with
U.S.
GAAP
and
other
extraordinary
expenses
not
incurred
in
the
ordinary
course
of
the
Fund’s
business,
based
on
the
daily
net
assets
of
the
Fund,
through
April
30,
2025.
Expenses
incurred
for
investment
advisory
and
management
services
are
reflected
on
the
Statement
of
Operations
as
“Management
fees.”
For
the
year
ended
December
31,
2023,
the
annual
rate
due
to
the
Manager
and
the
annual
expense
limit
were
as
follows:
Any
amounts
contractually
waived
or remitted
to
the
Fund by
the
Manager
with
respect
to
the
annual
expense
limit
in
a
particular
fiscal
year
may
be
reimbursed
by
the
Fund
to
the
Manager,
provided
that
such
reimbursement
will
not
cause
the
Fund
to
exceed
the
lesser
of
any
applicable
expense
limit
in
effect
(i)
at
the
time
of
the
original
waiver
or
payment
and
(ii)
at
the
time
of
such
reimbursement,
as
supported
by
standard accounting
practices.
Such
reimbursement
only
applies
to
amounts
waived
or
paid
by
the
Manager
within
the
three
years
prior
to
the
date
of
such
reimbursement,
calculated
monthly
from
when
the
waiver
or
payment
was
recorded.
Any
amounts
recouped
by
the
Manager
during
the
period
are
reflected
on
the
Statement
of
Operations
as
“Recoupment
of
prior
expenses
reimbursed
by
the
Manager.”
At
December
31,
2023,
there
were
no
remaining
contractual
reimbursements
subject
to
repayment
by
the
Fund
in
subsequent
years,
and
no
commitment
or
contingent
liability
is
expected.
Asset
Derivatives
Liability
Derivatives
Primary
Risk
Exposure
Statement
of
Assets
and
Liabilities
Location
Total
Value
Statement
of
Assets
and
Liabilities
Location
Total
Value
Equity
Risk
1,145,732
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$1,145,732
Payable
for
variation
margin
on
futures
contracts*
$—
Interest
Rate
Risk
–
719,553
–
–
–
Futures
Contracts
Receivable
for
variation
margin
on
futures
contracts*
$719,553
Payable
for
variation
margin
on
futures
contracts*
$
$
—
*
For
futures
contracts,
the
amounts
represent
the
cumulative
appreciation/depreciation
of
these
futures
contracts
as
reported
in
the
Schedule
of
Portfolio
Investments.
Only
the
current
day's
variation
margin,
if
any,
is
reported
within
the
Statement
of
Assets
and
Liabilities
as
Variation
margin
on
futures
contracts.
Primary
Risk
Exposure
Location
of
Gains/(Losses)
on
Derivatives
Recognized
Realized
Gains/(Losses)
on
Derivatives
Recognized
Change
in
Net
Unrealized
Appreciation/Depreciation
on
Derivatives
Recognized
Equity
Risk
(2,051,373)
(1,177,258)
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$
2,051,37
4
$
1,177,257
Interest
Rate
Risk
1,282,113
(962,203)
Futures
Contracts
Net
realized
gains/(losses)
on
futures
contracts/
Change
in
net
unrealized
appreciation/
depreciation
on
futures
contracts
$(1,282,113)
$962,203
Annual
Rate
Annual
Expense
Limit
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
0.10%
0.15%
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
Notes
to
the
Financial
Statements
December
31,
2023
10
Management
fees,
which
the
Manager
may
waive
in
order
to
maintain
more
competitive
expense
ratios,
are
not
subject
to
repayment
in
subsequent
years.
Information
on
the
total
amount
waived/reimbursed
by
the
Manager
or
repaid
to
the
Manager
by
the
Fund
during
the
period
can
be
found
on
the
Statement
of
Operations,
as
applicable.
During
the
year
ended
December
31,
2023,
there
were
no
such
waivers.
The
Manager
serves
as
the
investment
adviser
of the
underlying
funds
in
which
the
Fund
invests.
At
December
31,
2023,
these
underlying
funds
are
noted
as
Affiliated
Investment
Companies
in
the
Fund’s
Schedule
of
Portfolio
Investments.
Additional
information,
including
financial
statements,
about
these
Funds
is
available
at
www.allianzlife.com.
The
Manager
is
paid
a
separate
fee
from
the
underlying
funds
for
such
services.
A
summary
of
the
Fund’s
investments
in
affiliated
investment
companies
for
the
year
ended
December
31,
2023
is
as
follows:
Pursuant
to
separate
agreements
between
the
Trust
and
the
Manager,
the
Manager
provides
a
Chief
Compliance
Officer
(“CCO”)
and
certain
compliance
oversight
and
regulatory
filing
services
to
the
Trust.
Under
these
agreements,
the
Manager
is
entitled
to
an
amount
equal
to
a
portion
of
the
compensation
and
certain
other
expenses
related
to
the
individuals
performing
the
CCO
and
compliance
oversight
services,
as
well
as
$100
per
hour
for
time
incurred
in
connection
with
the
preparation
and
filing
of
certain
documents
with
the
SEC.
The
fees
are
paid
to
the
Manager
on
a
quarterly
basis.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administrative
and
compliance
services
fees.”
Citi
Fund
Services
Ohio,
Inc.
(“Citi”
or
the
“Administrator”),
a
wholly
owned
subsidiary
of
Citigroup,
Inc.,
with
which
an
officer
of
the
Trust
is
affiliated,
serves
as
the
Trust’s
administrator
and
fund
accountant,
and
assists
the
Trust
in
all
aspects
of
its
administration
and
operation.
The
Administrator
is
entitled
to
a
fee,
accrued
daily
and
paid
monthly.
The
Administrator
is
entitled
to
an
annual
fee
for
each
additional
class
of
shares
of
any
Fund,
certain
annual
fees
in
supporting
fair
value
services,
and
a
Trust-wide
annual
fee
for
providing
infrastructure
and
support
in
implementing
the
written
policies
and
procedures
comprising
the
Fund’s
compliance
program.
The
Administrator
is
also
reimbursed
for
certain
expenses
incurred.
The
total
expenses
incurred
by
the
Fund
for
these
services
are
reflected
on
the
Statement
of
Operations
as
“Administration
fees.”
FIS
Investor
Services
LLC
(“FIS”)
serves
as
the
Fund's
transfer
agent.
Under
the
Transfer
Agent
Agreement,
the
Trust
pays
FIS
a
fee
for
its
services
and
reimburses
FIS
for
all
of
their
reasonable
out-of-pocket
expenses
incurred
in
providing
these
services.
The
Bank
of
New
York
Mellon
(“BNY
Mellon”
or
the
“Custodian”)
serves
as
the
Trust’s
custodian.
For
these
services
as
custodian,
the
Funds
pay
BNY
Mellon
a
fee
based
on
a
percentage
of
assets
held
on
behalf
of
the
Funds,
plus
certain
out-of-pocket
charges.
Allianz
Life
Financial
Services,
LLC
(“ALFS”),
an
affiliate
of
the
Manager,
serves
as
distributor
of
the
Fund.
ALFS
receives
an
annual
Trust-wide
annual
fee
of
$7,500,
paid
by
the
Manager
from
its
profits
and
not
by
the
Trust,
for
recordkeeping
and
reporting
services.
Certain
Officers
and
Trustees
of
the
Trust
are
affiliated
with
the
Manager
or
the
Administrator.
Such
Officers
(except
for
the
Trust’s
CCO
as
noted
above)
and
Trustees
receive
no
compensation
from
the
Trust
for
serving
in
their
respective
roles.
4.
Investment
Valuation
Summary
The
valuation
techniques
employed
by
the
Fund,
as
described
below,
maximize
the
use
of
observable
inputs
and
minimize
the
use
of
unobservable
inputs
in
determining
fair
value.
The
inputs
used
for
valuing
the
Fund’s
investments
are
summarized
in
the
three
broad
levels
listed
below:
•
Level
1
-
quoted
prices
in
active
markets
for
identical
assets
•
Level
2
-
other
significant
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayments
speeds,
credit
risk,
etc.)
•
Level
3
-
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
investments)
Changes
in
valuation
techniques
may
result
in
transfers
in
or
out
of
an
assigned
level
within
the
disclosure
hierarchy.
The
inputs
or
methodology
used
for
valuing
investments
is
not
necessarily
an
indication
of
the
risk
associated
with
investing
in
those
investments.
Investments
in
other
investment
companies
are
valued
at
their
published
net
asset
value
(“NAV”).
Security
prices
are
determined
pursuant
to
valuation
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
“Board”
or
“Trustees”)
as
of
the
close
of
the
New
York
Stock
Exchange
(“NYSE”)
(generally
4:00
pm
Eastern
Time).
The
investments
utilizing
Level
1
valuations
represent
investments
in
open-end
investment
companies.
Futures
contracts
are
valued
at
the
settlement
prices
established
each
day
on
the
primary
exchange
and
are
typically
categorized
as
Level
1
in
the
fair
value
hierarchy.
The
Board
has
designated
the
Manager
to
perform
the
Fund’s
fair
value
determinations
in
accordance
with
valuation
procedures
approved
by
the
Board.
The
effect
of
using
fair
value
pricing
is
that
the
Fund’s
NAV
will
be
subject
to
the
judgment
of
the
Manager.
The
Manager’s
fair
valuation
process
is
subject
to
the
oversight
of
the
Board.
Value
12/31/22
Purchases
at
Cost
Proceeds
from
Sales
Net
Realized
Gains
(Losses)
Change
in
Net
Unrealized
Appreciation
(Depreciation)
Value
12/31/23
Shares
as
of
12/31/23
Dividend
Income
Net
Realized
Gains
Distributions
from
Affiliated
Underlying
Funds
AZL
Enhanced
Bond
Index
Fund
$
202,148,827
$
5,279,395
$
(5,792,501)
$
(1,735,671)
$
8,926,281
$
208,826,331
21,265,411
$
3,383,708
$
—
AZL
S&P
500
Index
Fund,
Class
2
310,293,240
15,444,793
(68,860,827)
12,850,800
43,642,738
313,370,744
15,536,477
3,761,276
11,683,517
AZL
T.
Rowe
Price
Capital
Appreciation
Fund
580,347,796
81,943,140
(98,216,131)
(11,328,811)
28,007,150
580,753,144
35,411,777
7,686,226
74,130,693
$
1,092,789,863
$
102,667,328
$
(172,869,459)
$
(213,682)
$
80,576,169
$
1,102,950,219
72,213,665
$
14,831,210
$
85,814,210
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
Notes
to
the
Financial
Statements
December
31,
2023
11
The
following
is
a
summary
of
the
valuation
inputs
used
as
of
December
31,
2023
in
valuing
the
Fund’s
investments
based
upon
the
three
levels
defined
above:
5.
Security
Purchases
and
Sales
For
the
year
ended
December
31,
2023,
cost
of
purchases
and
proceeds
from
sales
of
securities
(excluding
securities
maturing
less
than
one
year
from
acquisition)
were
as
follows:
6.
Investment
Risks
The
risks
below
are
presented
in
an
order
intended
to
facilitate
readability.
Their
order
does
not
imply
that
the
realization
of
one
risk
is
more
likely
to
occur
more
frequently
than
another
risk,
nor
does
it
imply
that
the
realization
of
one
risk
is
likely
to
have
a
greater
adverse
impact
than
another
risk.
The
Fund
may
be
subject
to
other
risks
in
addition
to
these
identified
risks.
This
section
discusses
certain
common
principal
risks
encountered
by
the
Fund.
Derivatives
Risk:
The
Fund
may
invest
directly
or
through
affiliated
or
unaffiliated
mutual
funds
in
derivative
instruments
such
as
futures,
options,
and
options
on
futures.
A
derivative
is
a
financial
contract
whose
value
depends
on,
or
is
derived
from,
the
value
of
an
underlying
asset,
reference
rate,
or
risk.
Use
of
derivative
instruments
involves
risks
different
from,
or
possibly
greater
than,
the
risks
associated
with
investing
directly
in
securities
and
other
traditional
investments.
Derivatives
are
subject
to
a
number
of
other
risks,
such
as
liquidity
risk,
interest
rate
risk,
market
risk,
credit
risk,
and
selection
risk.
Derivatives
also
involve
the
risk
of
mispricing
or
improper
valuation
and
the
risk
that
changes
in
the
value
may
not
correlate
perfectly
with
the
underlying
asset,
rate,
or
index.
Using
derivatives
may
result
in
losses,
possibly
in
excess
of
the
principal
amount
invested.
Also,
suitable
derivative
transactions
may
not
be
available
in
all
circumstances.
The
other
party
to
a
derivatives
contract
could
default.
Foreign
Securities
Risk:
Investing
in
the
securities
of
non-U.S.
issuers
involves
a
number
of
risks,
such
as
fluctuations
in
currency
values,
adverse
political,
social
or
economic
developments,
and
differences
in
social
and
economic
developments
or
policies.
Such
risks
include
future
political
and
economic
developments,
and
the
possible
imposition
of
exchange
controls
or
other
foreign
governmental
laws
and
restrictions.
In
addition,
with
respect
to
certain
countries,
there
is
the
possibility
of
expropriation
of
assets,
confiscatory
taxation,
political
or
social
instability
or
diplomatic
developments
which
could
adversely
affect
investments
in
those
securities.
Certain
foreign
companies
may
be
subject
to
sanctions,
embargoes,
or
other
governmental
actions
that
may
impair
or
otherwise
limit
the
ability
to
invest
in,
receive,
hold
or
sell
the
securities
of
such
companies.
Fund
of
Fund
Risk:
The
Fund,
as
a
shareholder
of
the
underlying
funds,
indirectly
bears
its
proportionate
share
of
any
investment
management
fees
and
other
expenses
of
the
underlying
funds.
Further
due
to
the
fees
and
expenses
paid
by
the
Fund,
as
well
as
small
variations
in
the
Fund’s
actual
allocations
to
the
underlying
funds
and
any
futures
and
cash
held
in
the
Fund’s
portfolio,
the
performance
and
income
distributions
of
the
Fund
will
not
be
the
same
as
the
performance
and
income
distributions
of
the
underlying
funds.
In
addition,
the
Fund
maintains
indirect
exposure
to
various
types
of
risk
which
may
exist
in
the
underlying
Funds,
such
as
foreign
securities
risk,
fixed
income
securities
risk
and
other
risks.
Interest
Rate
Risk:
Debt
securities
held
by
an
underlying
fund
may
decline
in
value
due
to
rising
interest
rates.
The
price
of
a
bond
is
also
affected
by
its
maturity.
Bonds
with
longer
maturities
generally
have
greater
sensitivity
to
changes
in
interest
rates.
Market
Risk
:
The
market
price
of
securities
owned
by
the
underlying
funds
may
go
up
or
down,
sometimes
rapidly
and
unpredictably.
Securities
may
decline
in
value
due
to
factors
affecting
securities
markets
generally
or
particular
industries
represented
in
the
securities
markets.
The
value
of
a
security
may
decline
due
to
general
market
conditions,
economic
trends
or
events that
are
not
specifically
related
to
a
particular
company,
such
as
real
or
perceived
adverse
economic
conditions,
inflation,
recessions, changes
in
the
general
outlook
for
corporate
earnings,
changes
in
interest
or
currency
rates,
or
adverse
investor
sentiment,
as
well
as
natural
disasters,
and
outbreaks
of
infectious
illnesses
or
other
widespread
public
health
issues.
Quantitative
Investing
Risk:
The
value
of
securities
selected
using
quantitative
analysis
can
react
differently
to
issuer,
political,
market,
and
economic
developments
than
the
market
as
a
whole
or
securities
selected
using
only
fundamental
analysis.
The
factors
used
in
quantitative
analysis
and
the
weight
placed
on
those
factors
may
not
be
predictive
of
a
security's
value.
In
addition,
factors
that
affect
a
security's
value
can
change
over
time
and
these
changes
may
not
be
reflected
in
the
quantitative
model.
A
quantitative
model
can
be
adversely
affected
by
errors
or
imperfections
in
the
factors
or
the
data
on
which
evaluations
are
based,
or
by
technical
issues
with
construction
or
implementation
of
the
model,
which
in
any
case
may
result
in
a
failure
of
the
portfolio
to
perform
as
expected
or
a
failure
to
identify
securities
that
will
perform
well
in
the
future.
7.
Federal
Tax
Information
It
is
the
policy
of
the
Fund
to
continue
to
qualify
as
a
regulated
investment
company
by
complying
with
the
provisions
available
to
certain
investment
companies,
as
defined
under
Subchapter
M
of
the
Internal
Revenue
Code,
and
to
make
distributions
of
net
investment
income
and
net
realized
gains
sufficient
to
relieve
it
from
all,
or
substantially
all,
federal
income
taxes.
Accordingly,
no
provisions
for
federal
income
taxes
are
required
in
the
financial
statements.
Investment
Securities:
Level
1
Level
2
Level
3
Total
Affiliated
Investment
Companies
$
1,102,950,219
$
—
$
—
$
1,102,950,219
Total
Investment
Securities
1,102,950,219
—
—
1,102,950,219
Other
Financial
Instruments:
*
Futures
Contracts
1,865,285
—
—
1,865,285
Total
Investments
$1,104,815,504
$—
$—
$1,104,815,504
*
Other
Financial
Instruments
would
include
any
derivative
instruments,
such
as
futures
contracts. These
investments
are
generally
presented
in
the
Statement
of
Assets
and
Liabilities
at
variation
margin.
Purchases
Sales
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
$102,667,328
$172,869,459
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
Notes
to
the
Financial
Statements
December
31,
2023
12
Management
of
the
Fund
has
reviewed
tax
positions
taken
in
tax
years
that
remain
subject
to
examination
by
all
major
tax
jurisdictions,
including
federal
(i.e.,
the
last
four
tax
year
ends
and
the
interim
tax
period
since
then,
as
applicable).
Management
believes
that
there
is
no
tax
liability
resulting
from
unrecognized
tax
benefits
related
to
uncertain
tax
positions
taken.
Cost
of
securities,
including
derivatives
and
short
positions
as
applicable,
for
federal
income
tax
purposes
at
December
31,
2023
was
$1,012,789,391.
The
gross
unrealized
appreciation/(depreciation)
on
a
tax
basis
was
as
follows:
As
of
the
end
of
its
tax
year
ended
December
31,
2023,
the
Fund
had
no
remaining
capital
loss
carry
forwards
(“CLCFs”).
The
Board
does
not
intend
to
authorize
a
distribution
of
any
realized
gain
for
the
Fund
until
any
applicable
CLCFs
have
been
offset.
During
the
year
ended
December
31,
2023,
the
Fund
utilized
$12,754,208
in
CLCFs
to
offset
capital
gains.
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2023, was
as
follows:
The
tax
character
of
dividends
paid
to
shareholders
during
the
year
ended
December
31,
2022, was
as
follows:
At
December
31,
2023,
the
components
of
accumulated
earnings
on
a
tax
basis
were
as
follows:
8.
Ownership
and
Principal
Holders
The
beneficial
ownership,
either
directly
or
indirectly,
of
more
than
25%
of
the
voting
securities
of
a
fund
creates
presumptions
of
control
of
the
fund,
under
section
2
(a)(9)
of
the
1940
Act.
As
of December
31,
2023,
the
Fund
had
an
individual
shareholder
account
which
is
affiliated
with
the
Manager
representing
ownership
in
excess
of
85%
of
the
Fund.
Investment
activities
of
this
shareholder
could
have
a
material
impact
to
the
Fund.
As
of
December
31,
2023,
the
Fund
had
a
controlling
interest
(in
excess
of
50%)
in
the
AZL
T.
Rowe
Capital
Appreciation
Fund,
which
is
affiliated
with
the
Manager.
9.
Recent
Regulatory
Pronouncements
Effective
January
24,
2023,
the
SEC
adopted
rule
and
form
amendments
that
require
open-end
management
investment
companies
to
transmit
concise
and
visually
engaging
annual
and
semi-annual
reports
to
shareholders
that
highlight
key
information.
Other
information,
including
financial
statements,
will
no
longer
appear
in
a
tailored
shareholder
report
but
must
be
available
online,
delivered
free
of
charge
upon
request,
and
filed
on
a
semi-annual
basis
on
Form
N-CSR.
The
rule
and
form
amendments
have
a
compliance
date
of
July
24,
2024.
Accordingly,
the
rule
and
form
amendments
will
not
impact
the
Fund
until
the
2024
semi-annual
shareholder
report
and
will
have
no
effect
on
the
Fund’s
accounting
policies
or
financial
statements.
10.
Subsequent
Events
Management
of
the
Fund
has
evaluated
the
need
for
additional
disclosures
or
adjustments
resulting
from
events
through
the
date
the
financial
statements
were
issued.
Based
on
this
evaluation,
there
were
no
subsequent
events
to
report
that
would
have
material
impact
on
the
Fund’s
financial
statements.
Unrealized
appreciation
$113,123,976
Unrealized
(depreciation)
(22,963,148)
Net
unrealized
appreciation/(depreciation)
$90,160,828
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
$91,615,841
$—
$91,615,841
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Ordinary
Income
Net
Long-Term
Capital
Gains
Total
Distributions(a)
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
$116,758,976
$46,322,966
$163,081,942
(a)
Total
distributions
paid
may
differ
from
the
Statements
of
Changes
in
Net
Assets
because
dividends
are
recognized
when
actually
paid
for
tax
purposes.
Undistributed
Ordinary
Income
Undistributed
Long-Term
Capital
Gains
Accumulated
Capital
and
Other
Losses
Unrealized
Appreciation/
Depreciation(a)
Total
Accumulated
Earnings/
(Deficit)
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
$57,493,551
$37,509,452
$—
$90,160,828
$185,163,831
(a)
The
differences
between
book-basis
and
tax-basis
unrealized
appreciation/(depreciation)
are
attributable
primarily
to
tax
deferral
of
losses
on
wash
sales,
mark-to-market
of
futures
contracts
and
straddles.
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
13
To
the
Board
of
Trustees
of
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
and
Shareholders
of
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
schedule
of
portfolio
investments,
of
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Fund
(one
of
the
funds
constituting
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust,
referred
to
hereafter
as
the
"Fund")
as
of
December
31,
2023,
the
related
statement
of
operations
for
the
year
ended
December
31,
2023,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2023,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2023
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2023
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2023
by
correspondence
with
the
transfer
agent
and
brokers.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
/s/
PricewaterhouseCoopers
LLP
New
York,
New
York
February
22,
2024
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Allianz
Variable
Insurance
Products
complex
since
2018.
14
Other
Federal
Income
Tax
Information
(Unaudited)
For
the
year
ended
December
31,
2023,
8.73%
of
the
total
ordinary
income
dividends
paid
by
the
Fund
qualify
for
the
corporate
dividends
received
deductions
available
to
corporate
shareholders.
15
Other
Information
(Unaudited)
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities
is
available,
without
charge,
upon
request,
by
visiting
the
Securities
and
Exchange
Commission’s
(‘‘Commission’’)
website
at
www.sec.gov,
or
by
calling
800-624-0197.
Information
regarding
how
the
Fund
voted
proxies
relating
to
portfolio
securities
during
the
most
recent
12-month
period
ended
June
30th
is
available
(i)
without
charge,
upon
request,
by
calling
800-624-0197;
(ii)
on
the
Trust’s
website
at
https://www.allianzlife.com;
and
(iii)
on
the
Commission’s
website
at
http://www.sec.gov
.
The
Fund
files
complete
Schedules
of
Portfolio
Holdings
with
the
Commission
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Schedules
of
Portfolio
Holdings
for
the
Fund
are
available
without
charge
on
the
Commission’s
website
at
http://www.sec.gov,
or
may
be
obtained
by
calling
800-624-0197.
16
Approval
of
Investment
Advisory
Agreement
(Unaudited)
Subject
to
the
general
supervision
of
the
Board
of
Trustees
(the
“Board”)
and
in
accordance
with
the
investment
objectives
and
restrictions
of
each
separate
series
(each
a
“Fund,”
together,
the
“Funds”)
of
the
Allianz
Variable
Insurance
Products
Fund
of
Funds
Trust
(the
“Trust”),
investment
advisory
services
are
provided
to
the
Funds
by
Allianz
Investment
Management
LLC
(the
“Manager”).
The
Manager
manages
each
Fund
pursuant
to
an
investment
management
agreement
(the
“Management
Agreement”)
with
the
Trust
in
respect
of
each
such
Fund.
The
Management
Agreement
provides
that
the
Manager,
subject
to
the
supervision
and
approval
of
the
Board,
is
responsible
for
the
management
of
each
Fund.
For
management
services,
each
Fund
pays
the
Manager
an
investment
advisory
fee
based
upon
each
Fund’s
average
daily
net
assets.
The
Manager
has
contractually
agreed
to
limit
the
expenses
of
each
Fund
by
reimbursing
the
Fund
if
and
when
total
Fund
operating
expenses
exceed
certain
amounts
until
at
least
April
30,
2025
(the
“Expense
Limitation
Agreement”).
In
reviewing
the
services
provided
by
the
Manager
and
the
terms
of
the
Management
Agreement,
the
Board
receives
and
reviews
information
related
to
the
Manager’s
experience
and
expertise
in
the
variable
insurance
marketplace.
In
addition,
the
Board
receives
information
regarding
the
Manager’s
expertise
with
regard
to
portfolio
diversification
and
asset
allocation
requirements
within
variable
insurance
products
issued
by
Allianz
Life
Insurance
Company
of
North
America
(“Allianz
Life”)
and
its
subsidiary,
Allianz
Life
Insurance
Company
of
New
York
(“Allianz
of
New
York”).
Currently,
the
Funds
are
offered
only
through
Allianz
Life
and
Allianz
of
New
York
variable
products,
and
not
in
the
retail
fund
market.
As
required
by
the
Investment
Company
Act
of
1940
(the
“1940
Act”),
the
Board
has
reviewed
and
approved
the
Management
Agreement
with
the
Manager.
The
Board’s
decision
to
approve
this
contract
reflects
the
exercise
of
its
business
judgment
on
whether
to
approve
new
arrangements
and
continue
the
existing
arrangements.
During
its
review
of
the
contract,
the
Board
considered
many
factors,
among
the
most
material
of
which
are:
the
Fund’s
investment
objectives
and
long-term
performance;
the
Manager’s
management
philosophy,
personnel,
processes
and
investment
performance,
including
its
compliance
history
and
the
adequacy
of
its
compliance
processes;
the
preferences
and
expectations
of
Fund
shareholders
(and
underlying
contract
owners)
and
their
relative
sophistication;
the
continuing
state
of
competition
in
the
mutual
fund
industry;
and
comparable
fees
in
the
mutual
fund
industry.
The
Board
also
considered
the
compensation
and
benefits
received
by
the
Manager.
This
includes
fees
received
for
services
provided
to
a
Fund
by
employees
of
the
Manager
or
of
affiliates
of
the
Manager
and
research
services
received
by
the
Manager
from
brokers
that
execute
Fund
trades,
as
well
as
advisory
fees.
The
Board
considered
the
fact
that:
(1) the
Manager
and
the
Trust
are
parties
to
an
Administrative
Services
Agreement
and
a
Compliance
Services
Agreement,
under
which
the
Manager
is
compensated
by
the
Trust
for
performing
certain
administrative
and
compliance
services
including
providing
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer;
and
(2) Allianz
Life
Financial
Services,
LLC,
an
affiliated
person
of
the
Manager,
is
a
registered
securities
broker-dealer
and
received
(along
with
its
affiliated
persons)
payments
made
by
the
underlying
funds
pursuant
to
Rule 12b1.
The
Board
is
aware
that
various
courts
have
interpreted
provisions
of
the
1940
Act
and
have
indicated
in
their
decisions
that
the
following
factors
may
be
relevant
to
an
adviser’s
compensation:
the
nature,
extent
and
quality
of
the
services
provided
by
the
adviser,
including
the
performance
of
the
fund;
the
adviser’s
cost
of
providing
the
services;
the
extent
to
which
the
adviser
may
realize
“economies
of
scale”
as
the
fund
grows
larger;
any
indirect
benefits
that
may
accrue
to
the
adviser
and
its
affiliates
as
a
result
of
the
adviser’s
relationship
with
the
fund;
performance
and
expenses
of
comparable
funds;
the
profitability
of
acting
as
adviser
to
the
fund;
and
the
extent
to
which
the
independent
Board
members,
who
are
not
“interested
persons”
of
a
fund
as
defined
by
the
1940
Act
(“Independent
Trustees”),
are
fully
informed
about
all
facts
bearing
on
the
adviser’s
services
and
fees.
The
Board
is
aware
of
these
factors
and
takes
them
into
account
in
its
review
of
the
Management
Agreement
for
the
Funds.
Each
member
of
the
Board
considered
and
weighed
these
factors
in
light
of
his
or
her
experience
in
governing
the
Trust.
The
Board
is
assisted
in
its
deliberations
by
the
advice
of
independent
legal
counsel
to
the
Independent
Trustees
(“Independent
Trustee
Counsel”).
In
this
regard,
the
Board
requests
and
receives
a
significant
amount
of
information
about
the
Funds
and
the
Manager.
Some
of
this
information
is
provided
at
each
regular
meeting
of
the
Board;
additional
information
is
provided
in
connection
with
the
particular
meetings
at
which
the
Board’s
formal
review
of
the
Management
Agreement
occurs.
In
between
regularly
scheduled
meetings,
the
Board
may
receive
information
on
particular
matters
as
the
need
arises.
Thus,
the
Board’s
evaluation
of
the
Management
Agreement
is
informed
by
reports
covering
such
matters
as:
the
Manager’s
investment
philosophy,
personnel
and
processes,
and
the
Fund’s
investment
performance
(in
absolute
terms
as
well
as
in
relationship
to
its
benchmark
and
certain
competitor
or
“peer
group”
funds).
In
connection
with
comparing
the
performance
of
each
Fund
versus
its
benchmark,
the
Board
receives
reports
on
the
extent
to
which
the
Fund’s
performance
may
be
attributed
to
various
applicable
factors,
such
as
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
rebalancing
decisions,
and
the
impact
of
cash
positions
and
Fund
fees
and
expenses.
The
Board
also
receives
reports
on
the
Funds’
expenses
(including
the
advisory
fee
itself
and
the
overall
expense
structure
of
the
Funds,
both
in
absolute
terms
and
relative
to
peer
group
and/or
competing
funds,
with
due
regard
for
the
Expense
Limitation
Agreement
and
additional
voluntary
expense
limitations);
the
use
and
allocation
of
any
brokerage
commissions
derived
from
trading
the
Funds’
portfolio
securities;
the
nature,
extent
and
quality
of
the
advisory
and
other
services
provided
to
the
Fund
by
the
Manager
and
its
affiliates;
compliance
and
audit
reports
concerning
the
Funds
and
the
companies
that
service
them;
and
relevant
developments
in
the
mutual
fund
industry
and
how
the
Funds
and/or
the
Manager
are
responding
to
them.
The
Board
also
receives
financial
information
about
the
Manager,
including
reports
on
the
compensation
and
benefits
the
Manager
derives
from
its
relationships
with
the
Funds.
These
reports
cover
not
only
the
fees
under
the
Management
Agreement,
but
also
the
fees,
if
any,
received
for
providing
other
services
to
the
Funds.
The
reports
also
discuss
any
indirect
or
“fall-out”
benefits
the
Manager
or
its
affiliates
may
derive
from
their
relationships
with
the
Funds.
The
Management
Agreement
was
most
recently
considered
at
Board
meetings
held
in
the
summer
and
fall
of
2023.
Information
relevant
to
the
approval
of
the
Management
Agreement
was
considered
at
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
as
well
as
at
various
other
meetings
preceding
those
meetings.
Accordingly,
the
Management
Agreement
was
approved
by
the
Board
at
an
in-person
meeting
on
September
19,
2023.
At
such
meeting
the
Board
also
approved
the
Expense
Limitation
Agreement
between
the
Manager
and
the
Trust
for
the
period
ending
April 30,
2025.
In
connection
with
such
meetings,
the
Board
requested
and
evaluated
extensive
materials
from
the
Manager,
including
performance
and
expense
information
for
other
investment
companies
with
similar
investment
objectives
derived
from
data
compiled
by
an
independent
third-party
provider
and
other
sources
believed
to
be
reliable
by
the
Manager
and
the
Trustees.
Prior
to
voting,
the
Trustees
reviewed
the
proposed
approval
of
the
Management
Agreement
with
management
and
with
Independent
Trustee
Counsel
and
received
a
memorandum
from
such
counsel
discussing
the
legal
standards
for
their
consideration
of
the
proposed
approval.
The
Independent
Trustees
also
discussed
the
proposed
approval
in
private
sessions
with
Independent
Trustee
Counsel
at
which
no
representatives
of
the
Manager
were
present.
In
reaching
their
determinations
relating
to
the
approval
of
the
Management
Agreement,
in
respect
of
each
Fund,
each
member
of
the
Board
considered
all
factors
he
or
she
believed
relevant.
The
Board
based
its
decision
to
approve
17
the
Management
Agreement
on
the
totality
of
the
circumstances
and
relevant
factors,
and
with
a
view
to
past
and
future
long-term
considerations.
Not
all
of
the
factors
and
considerations
discussed
above
and
below
are
necessarily
relevant
to
every
Fund,
and
the
Board
did
not
assign
relative
weights
to
factors
discussed
herein
or
deem
any
one
or
group
of
them
to
be
controlling
in
and
of
themselves.
Shareholder
reports
must
include
a
discussion
of
certain
factors
relating
to
the
selection
of
the
investment
adviser
and
the
approval
of
the
advisory
fee.
The
“factors”
enumerated
by
the
SEC
are
set
forth
below
in
italics,
as
well
as
the
Board’s
conclusions
regarding
such
factors:
(1)
The
nature,
extent
and
quality
of
services
provided
by
the
Manager.
The
Trustees
noted
that
the
Manager,
subject
to
the
oversight
of
the
Board,
administers
each
Fund’s
business
and
other
affairs.
The
Trustees
noted
that
the
Manager
also
provides
the
Trust
and
each
Fund
with
such
administrative
and
other
services
(exclusive
of,
and
in
addition
to,
any
such
services
provided
by
any
other
service
providers
retained
by
the
Trust
on
behalf
of
the
Funds)
and
executive
and
other
personnel
as
are
necessary
for
the
operation
of
the
Trust
and
the
Funds.
Except
for
the
Trust’s
Chief
Compliance
Officer
and
certain
compliance
staff,
the
Manager
pays
all
of
the
compensation
of
Trustees
and
officers
of
the
Trust
who
are
employees
of
the
Manager
or
its
affiliates.
The
Board
considered
the
scope
and
quality
of
services
provided
by
the
Manager
and
noted
that
the
scope
of
the
services
provided
has
continued
to
expand
as
a
result
of
regulatory
and
other
developments.
The
Board
noted,
for
example,
that
the
Manager
is
responsible
for
maintaining
and
monitoring
its
own
compliance
program,
and
this
compliance
program
has
been
continuously
refined
and
enhanced
in
light
of
new
regulatory
requirements.
The
Board
considered
the
capabilities
and
resources
which
the
Manager
has
dedicated
to
performing
services
on
behalf
of
the
Trust
and
its
Funds.
The
quality
of
administrative
and
other
services,
including
the
Manager’s
role
in
coordinating
the
activities
of
the
Trust’s
other
service
providers,
also
were
considered.
The
Board
concluded
that,
overall,
they
were
satisfied
with
the
nature,
extent
and
quality
of
services
provided
(and
expected
to
be
provided)
to
the
Trust
and
to
each
of
the
Funds
under
the
Management
Agreement.
(2)
The
investment
performance
of
the
Funds
and
the
Manager.
In
connection
with
every
quarterly
Board
meeting
and
the
summer
and
fall
2023
contract
review
process,
Trustees
received
extensive
information
on
the
performance
results
of
each
Fund.
This
included,
for
example,
performance
information
on
absolute
total
return,
performance
versus
the
appropriate
benchmark(s)
and
performance
versus
peer
groups
as
reported
by
Lipper,
the
contribution
to
performance
of
the
Manager’s
asset
class
allocation
decisions
and
volatility
management
strategies,
if
applicable,
the
performance
of
the
underlying
funds,
and
the
impact
on
performance
of
rebalancing
decisions,
cash
and
Fund
fees.
This
included
Lipper
performance
information
on
the
Funds
for
the
previous
quarter,
and
previous
one-,
three-
and
five-year
periods,
to
the
extent
available.
For
example,
in
connection
with
the
Board
meetings
held
June
13
and
20,
2023,
and
September
19,
2023,
the
Manager
reported
that,
for
the
five-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
reported
that
for
the
three-year
period
ended
December
31,
2022,
three
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
five
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%,
one
was
in
the
middle
20%,
and
four
were
in
the
bottom
40%
of
their
respective
Lipper
peer
groups.
The
Manager
also
reported
on
the
performance
of
the
MVP
Funds
compared
to
custom
managed-volatility
peer
groups.
For
the
five-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
middle
20%
of
its
respective
custom
managed-volatility
peer
group.
For
the
three-year
period
ended
December
31,
2022,
four
Funds
were
in
the
top
40%
and
three
were
in
the
middle
20%
of
their
respective
custom
managed-volatility
peer
groups.
For
the
one-year
period
ended
December
31,
2022,
six
Funds
were
in
the
top
40%
and
one
was
in
the
bottom
40%
of
its
respective
custom
managed-volatility
peer
group.
The
Board
members
discussed
with
the
Manager
and
considered
the
impact
of
the
volatility
management
strategies
on
performance
in
different
market
environments,
where
applicable,
and
considered
whether
they
were
operating
as
intended.
The
Board
noted,
in
particular,
the
impact
on
longer-term
performance
of
certain
characteristics
of
the
Funds’
volatility
management
strategies
in
relation
to
volatility
experienced
as
a
result
of
the
COVID-19
pandemic,
and
that
relative
performance
had
improved
as
the
markets
stabilized.
At
the
Board
meeting
held
September
19,
2023,
the
Board
also
received
updated
performance
information
for
the
Funds,
including
updated
Lipper
peer
group
ranking
information,
for
various
periods
ending
June
30,
2023.
At
the
Board
meeting
held
September
19,
2023,
the
Trustees
determined
that
the
investment
performance
of
the
Funds
was
acceptable.
(3)
The
costs
of
services
to
be
provided
and
profits
to
be
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Funds.
The
Board
considered
that
the
Manager
receives
an
advisory
fee
from
each
of
the
Funds.
The
Manager
reported
that
for
the
four
MVP
Index
Strategy
Funds,
the
advisory
fee
paid
was
in
the
31st
percentile
of
the
customized
peer
group,
and
for
the
AZL
Balanced
Index
Strategy
Fund,
the
advisory
fee
paid
was
in
the
8th
percentile
of
the
customized
peer
group.
The
Manager
reported
that
for
the
AZL
DFA
Multi-Strategy
Fund,
the
advisory
fee
paid
was
in
the
6th
percentile.
The
Manager
reported
that
for
the
AZL
MVP
DFA
Multi-Strategy,
AZL
MVP
FIAM
Multi-Strategy,
and
AZL
MVP
T.
Rowe
Price
Capital
Appreciation
Plus
Funds,
the
advisory
fee
paid
was
in
the
1st
percentile.
(A
lower
percentile
reflects
lower
fund
fees
and
is
better
for
fund
shareholders.)
Trustees
were
provided
with
information
on
the
total
expense
ratios
of
the
Funds
and
other
funds
in
the
customized
peer
groups,
and
the
Manager
reported
upon
the
challenges
in
making
peer
group
comparisons
for
the
Funds.
The
Board
further
considered
and
found
that
the
advisory
fee
paid
to
the
Manager
with
respect
to
each
Fund
was
based
on
services
provided
to
the
Fund
that
were
in
addition
to,
rather
than
duplicative
of,
the
services
provided
pursuant
to
the
advisory
agreements
for
the
underlying
funds
in
which
the
Fund
invests.
The
Manager
provided
information
concerning
the
profitability
of
the
Manager’s
investment
advisory
activities
for
the
period
from
2020
through
2022.
The
Board
recognized
that
it
is
difficult
to
make
comparisons
of
profitability
from
investment
company
advisory
agreements
because
comparative
information
is
not
generally
publicly
available
and
is
affected
by
numerous
factors,
including
the
structure
of
the
particular
adviser,
the
types
of
funds
it
manages,
its
business
mix,
numerous
assumptions
regarding
allocation
of
expenses
and
the
adviser’s
capital
structure
and
cost
of
capital.
In
considering
profitability
information,
the
Board
considered
the
possible
effect
of
certain
fall-out
benefits
to
the
Manager
and
its
affiliates.
The
Board
focused
on
profitability
of
the
Manager’s
relationships
with
the
Funds
before
taxes
and
distribution
expenses.
The
Board
recognized
that
the
Manager
should
earn
a
reasonable
level
of
profits
for
the
services
it
provides
to
each
Fund.
(4)
and
(5)
The
extent
to
which
economies
of
scale
would
be
realized
as
the
Funds
grow,
and
whether
fee
levels
reflect
these
economies
of
scale.
The
Board
noted
that
the
advisory
fee
schedules
for
the
Funds
do
not
contain
breakpoints
that
reduce
the
fee
rate
on
assets
above
specified
levels.
The
Board
recognized
that
breakpoints
may
be
an
appropriate
way
for
the
Manager
to
share
its
economies
of
scale,
if
any,
with
Funds
that
have
substantial
assets.
The
Board
found
there
was
no
uniform
methodology
for
establishing
breakpoints
that
give
effect
to
Fund-specific
services
provided
by
the
Manager.
The
Board
noted
that
in
the
fund
industry
as
a
whole,
as
well
as
among
funds
similar
to
the
Funds,
there
is
no
uniformity
or
pattern
in
the
fees
and
asset
levels
at
which
breakpoints
(if
any)
apply.
Depending
on
the
age,
size,
and
other
characteristics
of
a
particular
fund
and
its
manager’s
cost
structure,
different
conclusions
can
be
drawn
as
to
whether
there
are
economies
of
scale
to
be
realized
at
any
particular
level
of
assets,
notwithstanding
the
intuitive
conclusion
that
such
economies
exist,
or
will
be
realized
at
some
level
of
total
assets.
Moreover,
because
different
managers
have
different
cost
structures
and
service
models,
it
is
difficult
to
draw
meaningful
18
conclusions
from
the
breakpoints
that
may
have
been
adopted
by
other
funds.
The
Board
also
noted
that
the
advisory
agreements
for
many
funds
do
not
have
breakpoints
at
all,
or
if
breakpoints
exist,
they
may
be
at
asset
levels
significantly
greater
than
those
of
the
individual
Funds.
The
Board
noted
that
the
total
assets
in
all
of
the
Funds,
as
of
June
30,
2023,
were
approximately
$7.8 billion
and
that
the
largest
Fund,
the
AZL
MVP
Growth
Index
Strategy
Fund,
had
assets
of
approximately
$2.0 billion.
The
Board
noted
that
the
Manager
has
agreed
to
temporarily
limit
Fund
expenses
under
the
Expense
Limitation
Agreement,
which
has
the
effect
of
reducing
expenses
similar
to
implementation
of
advisory
fee
breakpoints.
The
Manager
has
committed
to
continue
to
consider
the
continuation
of
expense
limits
and/or
advisory
fee
breakpoints
as
Fund
assets
change.
The
Board
receives
quarterly
reports
on
the
level
of
Fund
assets.
The
Board
expects
to
continue
to
consider:
(a) the
extent
to
which
economies
of
scale
have
been
realized,
and
(b) whether
the
advisory
fee
should
be
modified,
either
in
connection
with
the
next
renewal
of
the
Management
Agreement
or
by
modifying
the
Expense
Limitation
Agreement,
to
reflect
such
economies
of
scale,
if
any.
Having
taken
these
factors
into
account,
the
Board
concluded
that
the
absence
of
breakpoints
in
the
Funds’
advisory
fee
rate
schedules
was
acceptable
under
each
Fund’s
circumstances.
In
conclusion,
after
full
consideration
of
the
above
factors,
as
well
as
such
other
factors
as
each
member
of
the
Board
considered
instructive
in
evaluating
the
Management
Agreement,
the
Board
concluded
that
the
advisory
fees
were
reasonable,
and
that
the
continuation
of
the
Management
Agreement
was
in
the
best
interest
of
the
Funds.
19
Information
about
the
Board
of
Trustees
and
Officers
(Unaudited)
The
Trust
is
managed
by
the
Trustees
in
accordance
with
the
laws
of
the
state
of
Delaware
governing
business
trusts.
In
addition
to
serving
on
the
Board
of
Trustees
of
the
Trust,
each
Trustee
serves
on
the
Board
of
the
Allianz
Variable
Insurance
Products
Trust
(“VIP
Trust”)
and
the
AIM
ETF
Products
Trust
(“ETF
Trust”)
(collectively,
the
Trust,
the
VIP
Trust,
and
ETF
Trust
are
the
“AIM
Complex”).
There
are
currently
six
Trustees,
one
of
whom
is
an
“interested
person”
of
the
Trust
within
the
meaning
of
that
term
under
the
1940
Act.
The
Trustees
and
Officers
of
the
Trust,
their
addresses,
years
of
birth,
their
positions
held
with
the
Trust,
their
terms
of
office
with
the
Trust
and
length
of
time
served,
their
principal
occupation(s)
during
the
past
five
years,
the
number
of
portfolios
in
the
Trust
they
oversee,
and
their
other
directorships
held
during
the
past
five
years
are
as
follows:
Independent
Trustees
(
1)
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Peggy
L.
Ettestad
(1957)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Lead
Independent
Trustee
Since
10/14
(Trustee
since
2/07)
Managing
Director,
Red
Canoe
Management
Consulting
LLC,
2008
to
present
56
None
Tamara
Lynn
Fagely
(1958)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Chief
Operations
Officer,
Hartford
Funds,
2012
to
2013
56
Diamond
Hill
Funds
(10
Funds)
Richard
H.
Forde
(1953)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
12/17
Retired;
previously,
Member
of
the
Board
and
Chairman
of
the
Finance
and
Investment
Committee,
Connecticut
Water
Service,
Inc.,
2013
to
2019
56
Connecticut
Water
Service,
Inc.
Jack
Gee
(1959)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
01/22
Retired;
previously,
Managing
Director,
BlackRock,
Inc.,
Treasurer
and
Chief
Financial
Officer
U.S.
iShares,
2004
to
2019
56
TCW
ETF
Trust
(3
Funds);
Esoterica
Thematic
Trust
(2019
-
2020)
Claire
R.
Leonardi
(1955)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
02/04
Retired;
previously,
CEO,
Health
eSense
Inc.
(a
medical
device
company),
2015
to
2018,
and
Connecticut
Innovations,
Inc.
(a
venture
capital
firm),
2012
to
2015
56
None
20
Interested
Trustee
(
3)
(1)
Each
of
the
Independent
Trustees
is
a
member
of
the
Audit
and
Operational
Risk
Oversight
Committee.
(2)
Indefinite.
(3)
Is
an
“interested
person,”
as
defined
by
the
1940
Act,
due
to
employment
by
Allianz
Life
and
the
Manager.
Officers
(1)
Indefinite.
(2)
The
Manager
and
the
Trust
are
parties
to
a
Compliance
Services
Agreement
under
which
the
Manager
provides
an
employee
of
the
Manager
or
one
of
its
affiliates
to
act
as
the
Trust’s
Chief
Compliance
Officer.
The
Fund’s
Statement
of
Additional
Information
(“SAI”)
contains
additional
information
about
the
Trust’s
Trustees
and
Officers.
The
SAI
is
available
without
charge,
upon
request,
by
calling
toll-free
800-624-0197
or
at
https://www.allianzlife.com.
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(2)
/Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Number
of
Portfolios
Overseen
for
the
AIM
Complex
Other
Directorships
Held
Outside
of
the
AIM
Complex
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Trustee
Since
06/11
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
56
None
Name,
Address,
and
Birth
Year
Positions
Held
with
AIM
Complex
Term
of
Office
(1)
/
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Brian
Muench
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
President
Since
11/10
President,
Allianz
Investment
Management
LLC,
2010
to
present;
Vice
President,
Allianz
Life,
2011
to
present
Amanda
Farren
(1978)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Secretary
Since
02/24
Chief
Legal
Officer,
Allianz
Investment
Management
LLC;
Senior
Counsel,
Allianz
Life,
January
2024
to
present;
Senior
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2023;
Vice
President
and
Director,
The
Bank
of
New
York
Mellon,
2015
-2023
Bashir
C.
Asad
(1963)
Citi
Fund
Services
Ohio,
Inc.
4400
Easton
Commons,
Suite
200
Columbus,
OH
43219
Treasurer,
Principal
Accounting
Officer
and
Principal
Financial
Officer
Since
06/16
Senior
Vice
President,
Citi
Fund
Services
Ohio,
Inc.,
2011
to
present
Chris
R.
Pheiffer
(1968)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Chief
Compliance
Officer
(2)
and
Anti-Money
Laundering
Compliance
Officer
Since
02/14
Chief
Compliance
Officer
of
the
Trust
and
the
VIP
Trust,
2014
to
present,
and
the
ETF
Trust,
2020
to
present
Michael
Tanski
(1970)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
04/09
Assistant
Vice
President,
Allianz
Investment
Management
LLC,
2013
to
present.
Laura
Quade
(1969)
5701
Golden
Hills
Drive
Minneapolis,
MN
55416
Vice
President
Since
08/23
Vice
President,
Allianz
Investment
Management
LLC,
2023
to
present,
previously
Director
at
Wealth
Enhancement
Group,
November
2019
to
November
2022;
Vice
President,
Head
of
Operations
at
Hartford
Funds
2014
to
2019
ANNRPT1223
02/24
The
Allianz
VIP
Fund
of
Funds
are
distributed
by
Allianz
Life
Financial
Services,
LLC.
These
Funds
are
not
FDIC
Insured.
Item 2. Code of Ethics.
(a) The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. This code of ethics is included as an Exhibit.
(b) During the period covered by the report, with respect to the registrant's code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions; there have been no amendments to, nor any waivers granted from, a provision that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item 2.
Item 3. Audit Committee Financial Expert.
(a)(1) The registrant’s board of directors has determined that the registrant has at least one audit committee financial expert serving on its audit committee.
(a)(2)
The audit committee financial expert is Tamara Lynn Fagely, who is “independent” for purposes of this Item 3 of Form N-CSR.Item 4. Principal Accountant Fees and Services.
2023 2022
(a) Audit Fees �� $152,702 $181,418
2023 2022
(b) Audit-Related Fees $6,000 $30,000
Related to the consent on Form N-1A for the annual registration statement.
2023 2022
(c) Tax Fees $42,966 $57,288
Preparation of the funds’ federal income tax return
2023 2022
(d) All Other Fees $0 $0
4(e)(1) The Audit Committee (“Committee”) of the Registrant is responsible for pre-approving all audit and non-audit services performed by the independent auditor in order to assure that the provision of such services does not impair the auditor’s independence. Before the Registrant engages the independent auditor to render a service, the engagement must be either specifically approved by the Committee or entered into pursuant to the pre-approval policy. The Committee may delegate preapproval authority to one or more of its members. The member or members to whom such authority is delegated shall report any pre-approval decisions to the Committee at its next scheduled meeting. The Committee may not delegate to management the Committee’s responsibilities to pre-approve services performed by the independent auditor. The Committee has delegated pre-approval authority to its Chairman for any services not exceeding $10,000.
4(e)(2) During the previous two fiscal years, the Registrant did not receive any non-audit services pursuant to a waiver from the audit committee approval or pre-approval requirement under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
4(f) Not applicable.
4(g)
The aggregate fees billed for each of the last two fiscal years for professional services rendered by PricewaterhouseCoopers LLP for tax compliance, tax advice, and tax planning were as follows: 2023 2022
$42,966 $57,288
4(h) Not applicable.
4(i) Not applicable.
4(j) Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) The Schedule of Investments as of the close of the reporting period are included as part of the report to shareholders filed under Item 1 of the Form N-CSR.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a)
The registrant’s
principal executive officer and principal financial officer have concluded
registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these, based on their
evaluation of the
disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant’s internal control over financial reporting
(as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d))that occurred during the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. Recovery of Erroneously Awarded Compensation.
Not applicable.
Item 14. Exhibits.
(a)(1)
The code of ethics that is the subject of the disclosure required by Item 2 is attached hereto.
(a)(3) Not applicable.
(a)(4) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Allianz Variable Insurance Products Fund of Funds Trust
By (Signature and Title) /s/ Brian Muench
Brian Muench, Principal Executive Officer
Date February 28, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) /s/ Brian Muench
Brian Muench, Principal Executive Officer
Date February 28, 2024
By (Signature and Title) /s/ Bashir C. Asad
Bashir C. Asad, Principal Financial Officer & Principal Accounting Officer
Date February 27, 2024
.