Allianz Income and Growth - Setting in place opportunities for income and growth - Allianz Global Investors Singapore Limited
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Q2 2018 Issue
Allianz Income
and Growth
Setting in place
opportunities for
income and growth
classes
ip le c u rr ency share ged)
Mult y-hed
g currenc
(includin ailable
av
• 3 disciplines, 1 goal: income and growth
• Monthly dividends from broadly diversified sources
• Multi-asset tool for protection against volatility
Allianz InG Leaflet_2018 Q2_180518 v6.indd 1 5/18/2018 11:09:57 AM
Allianz Income and Growth
Why invest in Allianz Income and Growth (the “Fund”)?
• Despite all the uncertainty in the markets, the fundamentals of US corporations remain solid: balance
sheets are good, leverage is lower and cash levels remain high. US high-yield bonds, convertible bonds and
US equities offer extensive and compelling investment opportunities for investors.
• The Fund adopts a “three-sleeve” approach, with the core holdings invested primarily in a portfolio
consisting of 1/3 US high-yield bonds, 1/3 US convertible bonds and 1/3 US equities/equity securities. It
aims to capture multiple sources of potential income that includes participation in the upside potential of
equities at a potentially lower level of volatility than pure-equity investment.
High-Yield Bonds:
Offering one of the highest yields globally
• US high yield bonds offer one of the highest yields Market Yields Globally
globally. US High Yield 6.6
Leveraged Loans 6.4
• Amid improved corporate fundamentals, the main Global HY EM Corporate
Global HY EM Sovereign & Corporate
6.0
6.0
risk associated with high-yield bonds - defaults - has US Investment Grade Corporate 3.8
Euro High Yield 3.4
diminished in recent years, to 2.21%# and is expected US Convertibles 2.7
to remain below their long term historical average in
US Treasure Current 10-Year 2.7
S&P 500 1.8
2018. German 10-Year Govt Bond
Japan 10-Year Govt Bond 0.0
0.5
Switzerland 10-Year Govt Bond 0.0
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0
Source: BofA Merrill Lynch, FactSet, J.P. Morgan. Data as at 31 March 2018.
#
Source: BofA Memll Lynch, J.P. Morgan, Allianz Global Investors. Data as at 31 March 2018.
Convertible Bonds:
Potential for upside participation and less downside volatility
• Convertible bonds consist of bonds with stock options. Participation Potential, Volatility Cushioning
Investors have the right to exchange the bonds for Busted Total Return/Balanced Equity Sensitive
shares of the company within a fixed period of time. Appreciation
Protects like potential of a stock
• Convertible bonds aim to participate in the upside a bond
potential of the equity markets, while cushioning
Convertible Price
100
against potential downside volatility.
Conversion value
Bond value
Convertible price
0
Stock Price
Source: Allianz Global Investors. Above example is for illustrative purpose only and not
representative of any specific convertible. Convertibles involve the risk factors of both stocks
and bonds. They fluctuate in value with the price changes of the underlying stock. If interest
rates on the bonds rise, the value of the corresponding convertible will fall. Funds that invest in
convertibles may have to convert the securities before they would otherwise, which may have
an adverse effect on the Fund’s ability to achieve its investment objective.
Equities / Equity Securities:
Potential for gains supported by favourable economic indicators
• The US economy is expected to expand in 2018 given S&P 500 Price Index
favourable US economic factors. Earnings have inflected
and is expected to rise.
• While S&P 500 index is at an all-time high, earnings are
still expected to be positive for 2018 with forward price
to earnings ratio (P/E) still looking reasonable.
• The projected rise in corporate profits could lead to
additional gains for US equities.
Forward Price to Earnings Ratio is a bottom-up calculation based on the most recent S&P 500 Index
price, divided by consensus estimates for earnings in the next 12 months (NTM), and is provided by
FactSet Market Aggregates. Returns are cumulative and based on S&P 500 Index price movement
only, and do not include the reinvestment of dividends. Source: Standard & Poor’s, Compustat,
FactSet, J.P. Morgan Asset Management. As of 31 March 2018.
Allianz InG Leaflet_2018 Q2_180518 v6.indd 2 5/18/2018 11:09:58 AMFund Features
Potential monthly payout1
The Fund aims to generate long-term capital appreciation and income.
Allianz Income and Growth Class AM (USD) Dis.
Projected dividend per share for the second half of the Fund’s financial year 2018*
USD 0.06600 USD 0.06600 USD 0.06600 USD 0.06600 USD 0.06600 USD 0.06600
per unit per unit per unit per unit per unit per unit
13 Apr 2018 14 May 2018 14 Jun 2018 13 Jul 2018 14 Aug 2018 14 Sep 2018
(record date)
Available Class AM Class AMg2 Class AM Class AMg2 C lass AM Class AM Class AM Class AM
Share Classes (USD) Dis. (USD) Dis. (H2-SGD) Dis. (H2-SGD) Dis. (H2-EUR) Dis. (H2-GBP) Dis. (H2-AUD) Dis. (H2-RMB) Dis.
Dividend USD USD SGD SGD EUR GBP AUD RMB
Per Share 0.06600 0.04200 0.06183 0.03783 0.04933 0.05767 0.07017 0.08683
The dividend of each share class listed is reviewed semi-annually. The projected level of monthly dividend is intended to cover the second half of the financial year of the Allianz Global Investors Fund,
from April 2018 to September 2018. Currency hedged share classes (as denoted by the prefix “H2-”) may be subject to shorter term changes, subject to FX implied interest rate movements.
* Actual review period and projected monthly payout covering period are subject to change without prior notice.
Market participation with downside protection
• The Fund's structure provides potential income Market Participation
January 1988 to March 2018
and capital appreciation while helping to moderate US High Yield US Convertibles US Equities
downside risk. 3.0
2.5 2.5
3.5 3.5
3.0 2.9 2.7
2.5 3.0 2.8
2.5 2.5
• US high yield, convertibles and equities have
2.5 2.4 2.5
2.0
2.0 2.0
1.5
Avg. Qtrly Return (%)
1.1
historically provided strong performance in
Avg. Qtrly Return (%)
Average Quarterly Return (%)
1.5 1.5
1.0
1.0 1.0
0.5
rising interest rate environments and delivered 0.0
0.5
0.0
0.5
0.0
diversification benefits from core fixed income.
-0.5
-0.5 -0.5
-1.0
-1.0 -1.0
-1.5 -1.2
90 Fixed Income Up 31 Fixed Income Down -1.5 -1.2 -1.2
-1.5
Quarters Quarters 90 Up Quarters 31 Down Quarters 90 Up Quarters 31 Down Quarters
ICE BofAML US High Yield Master II Index ICE BofAML All US Convertibles Index S&P 500 Index
BBG Barclays U.S. Government Credit Bond Index BBG Barclays U.S. Government Credit Bond Index
BBG Barclays U.S. Government Credit Bond Index
Fixed income up and down quarters are based on quarterly performance of the BBG Barclays
U.S. Government Credit Bond Index. Source: Bloomberg (Barclays Capital); ICE Data Systems;
BofA Merrill Lynch; Allianz Global Investors. Data as at 31 March 2018.
Cushion against rising interest rates
US high yield, convertibles and equities have historically provided better performances in rising interest rate
environment and delivered diversification benefits from core fixed income.
Rate Hike Cycles
Start 29-Mar-88 04-Feb-94 30-Jun-99 30-Jun-04 16-Dec-15
End 24-Feb-89 01-Feb-95 16-May-00 29-Jun-06 31-Dec-17
No. of Months 11 12 11 24 24+
Total Rate Hike 3.25% 3.00% 1.75% 4.25% 1.25%
Asset Class Performance (%)
US Core Bonds 3.41 -2.04 2.02 2.99 6.31
US Investment Grade Bonds 5.54 -2.78 0.06 2.96 12.76
10-Year US Treasuries 4.94 -6.96 3.88 4.61 9.18
US Equities 15.09 0.67 9.65 7.81 36.55
US Convertible Bonds 11.09 -8.49 25.43 4.80 26.45
US High Yield Bonds 8.95 -1.71 -1.84 7.41 27.01
Source: Morningstar Direct, as at 31 December 2017. US Core Bonds are represented by Bloomberg Barclays US Aggregate Bond TR USD; US Investment Grade Bonds are represented by BofAML US
Corporate Master TR USD; 10-Year US Treasuries are represented by BofAML US Treasuries 10+Year TR USD; US Equities are represented by S&P 500 TR USD; US Convertible Bonds are represented by
BofAML US Convertible; US High Yield Bonds are represented by BofAML US High Yield Master II TR USD.
Allianz InG Leaflet_2018 Q2_180518 v6.indd 3 5/18/2018 11:09:58 AMAllianz Income and Growth 5
Fund Highlights
Top 5 Holdings – High-Yield Bonds6 Top 5 Holdings – Convertible Bonds6 Top 5 Holdings – Equities / Equity Securities6
Sector % Sector % Sector %
CENTURYLINK INC 7.5% TELECOM - WIRELINE
0.3 INTEL CORP 3.25% 08/01/39 TECHNOLOGY 0.7 MICROSOFT CORP IT 1.0
04/01/24 INT. & SERV.
AECOM 5.875% 10/15/24 SERVICES 0.3 MICRON TECHNOLOGY INC 3%
TECHNOLOGY 0.6 VISA INC IT 1.0
11/15/43
AMC ENTERTAINMENT HOLDIN PRICELINE GROUP INC/THE 0.9%
ENTERTAINM. & FILM 0.3 TECHNOLOGY 0.5 AMAZON.COM INC CONS. DISC. 1.0
6.125% 05/15/27 09/15/21
SPRINT COMMUNICATIONS
TELECOM WIRELESS 0.3 VERISIGN INC 4.865% 08/15/37 TECHNOLOGY 0.5 ALPHABET INC IT 0.9
11.5% 11/15/21
CALUMET SPECIALTY PROD BECTON DICKINSON AND CO
ENERGY 0.3 HEALTHCARE 0.5 APPLE INC IT 0.9
6.5% 04/15/21 6.125% 05/01/20
Total 1.5 Total 2.8 Total 4.8
Rating Allocation – High-Yield Bonds (%) Rating Allocation – Convertible Bonds (%) Sector Allocation – Equities / Equity Securities (%)
Liquidity 2.5 Liquidity 4.7 Liquidity 5.0
Not Rated 1.5 CCC 0.7 Others 0.9 IT 36.1
BBB 2.2 A 5.4 Telecom
BB 44.3 Not Rated 58.1 Services 0.8
CCC 7.1 Energy 2.6
B 8.8
Materials 3.4
Cons. Cons. Disc. 16.0
B 42.4 BBB 10.3 Staples 4.5
Financials 4.8
BB 12.0 Industrials 12.3 Healthcare 13.4
Fund Details
Class AM Class AM Class AM Class AM Class AM Class AM Class AM Class AMg2 Class AMg2 Class AMg2 Class AMg2 Class AMg2
Class AT Class AM Class AMg2
(H2-AUD) (H2-EUR) (H2-GBP) (H2-RMB) (H2-SGD) (H2-CAD) (H2-NZD) (H2-AUD) (H2-CAD) (H2-GBP) (H2-RMB) (H2-SGD)
(USD) Acc. (USD) Dis. (USD) Dis.
Dis. Dis. Dis. Dis. Dis. Dis. Dis. Dis. Dis. Dis. Dis. Dis.
Fund Manager Doug Forsyth
Fund Size2 USD 22,953.18m
Number of Holdings 543 (High Yield Bonds: 261, Convertible Bonds: 207, Equities / Equity Securities: 75)
Initial Fee Up to 5%
All-in-Fee3 1.50% p.a.
Total Expense Ratio4 1.55% 1.55% 1.55% 1.55% 1.55% 1.55% 1.55% 1.55% 1.55% 1.57% 1.58% 1.52% 1.52% 1.55% 1.55%
Unit NAV USD 16.26 USD 8.96 AUD 8.93 EUR 8.53 GBP 8.44 CNY 8.27 SGD 8.70 CAD 8.43 NZD 8.06 USD 10.22 AUD 10.10 CAD 10.14 GBP 10.11 CNY 10.13 SGD 10.18
Inception Date 18/11/2011 16/10/2012 15/10/2012 02/05/2013 02/05/2013 14/06/2013 01/07/2013 02/05/2013 02/12/2013 15/02/2017 15/05/2017 15/05/2017 15/05/2017 15/05/2017 15/02/2017
Dividend Frequency1 N/A Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly
ISIN Code LU0689472784 LU0820561818 LU0820562030 LU0913601281 LU0820562386 LU0820562469 LU0943347566 LU0820562113 LU0994605391 LU1551013342 LU1597252433 LU1597252862 LU1597252607 LU1597253084 LU1551013425
Bloomberg Ticker ALLIGAT LX ALLIGAM LX ALLIGAH LX ALZAH2E LX ALZAH2G LX ALZAH2R LX ALIGH2S LX ALZAH2C LX ALAMH2N LX ALIAMG2 LX ALIAMHA LX ALIAMHC LX ALIAMHG LX ALIAMHR LX ALIAG2H LX
Source: All data quoted are Allianz Global Investors, as at 31 March 2018, unless stated otherwise.
1
Dividend payments are applicable for Class AM Dis (monthly distribution) and Class AMg2 Dis (monthly distribution), and for reference only. Yields are not
guaranteed, dividend may be paid out from capital (Class AM and Class AMg2). This may result in an immediate decrease in the NAV per share and may reduce
the capital available for the Fund for future investment and capital growth. Positive distribution yield does not imply positive return. For details, please refer to the
Fund's distribution policy disclosed in the offering documents.
2
The Fund size quoted includes all share classes of the Fund.
3
The All-in-Fee includes the expenses previously called management and administration fees.
4
Total Expense Ratio (TER): Total cost (except transaction costs) charged to the Fund during the last financial year expressed as a ratio of the Fund’s average NAV.
For share classes that have been incepted for less than one year as at close of the last financial year (please refer to the Inception Date in the Fund Details table),
the TER will be annualized. For share classes incepted after the close of the last financial year, the TER will be reflected as N/A.
5
Source: Morningstar, as at 28 February 2018. Copyright © 2017 Morningstar Asia Limited (“Morningstar”). All Rights Reserved. The information contained
herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or
timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no
guarantee of future results.
6
Securities may be held directly or indirectly via other investment vehicles.
Information herein is based on sources we believe to be accurate and reliable as at the date it was made. We reserve the right to revise any information herein at any
time without notice. No offer or solicitation to buy or sell securities and no investment advice or recommendation is made herein. In making investment decisions,
investors should not rely solely on this material but should seek independent professional advice. However, if you choose not to seek professional advice, you should
consider the suitability of the product for yourself. Past performance of the fund manager(s) and the fund is not indicative of future performance. Prices of units
in the Fund and the income from them, if any, may fall as well as rise and cannot be guaranteed. Distribution payments of the Fund, where applicable, may at the
sole discretion of the Manager, be made out of either income and/or net capital gains or capital of the Fund. As a result, it may reduce the Fund’s net asset value.
The dividend yields and payouts are not guaranteed and might change depending on the market conditions or at the Manager’s discretion. Investment involves
risks including the possible loss of principal amount invested and risks associated with investment in emerging and less developed markets. The Fund may invest in
financial derivative instruments and/or structured products and be subject to various risks (including counterparty, liquidity, credit and market risks etc.). Investing
in fixed income instruments (if applicable) may expose investors to various risks, including but not limited to creditworthiness, interest rate, liquidity and restricted
flexibility risks. Changes to the economic environment and market conditions may affect these risks, resulting in an adverse effect to the value of the investment.
During periods of rising nominal interest rates, the values of fixed income instruments (including short positions with respect to fixed income instruments) are
generally expected to decline. Conversely, during periods of declining interest rates, the values are generally expected to rise. Liquidity risk may possibly delay or
prevent account withdrawals or redemptions. Past performance, or any prediction, projection or forecast, is not indicative of future performance. Investors should
read the Prospectus obtainable from Allianz Global Investors Singapore Limited or any of its appointed distributors for further details including the risk factors,
before investing. This material has not been reviewed by the Monetary Authority of Singapore (MAS). MAS authorization/recognition is not a recommendation or
endorsement. The issuer of this material is Allianz Global Investors Singapore Limited (12 Marina View, #13-02 Asia Square Tower 2, Singapore 018961, Company
Registration No. 199907169Z).
Investment hotline: +65 6438 0828 sg.allianzgi.com
Allianz InG Leaflet_2018 Q2_180518 v6.indd 4 5/18/2018 11:09:59 AMYou can also read
