In today’s volatile market, getting from risk to reward requires active management. What active management offers: buffer against volatility while delivering a potential income stream, uncover growth opportunities and provide risk-managed solutions. Our US Income Strategies go beyond traditional fixed-income securities by focusing on diversification and risk mitigation as interest rates rise.
Allianz US Short Duration High Income Bond

A core diversifier to overall fixed-income allocation while helping to manage duration risk in a rising-rate environment.

Q: How can investors manage interest-rate risk and optimize the potential income amidst the interest-rate hike?

A: Short duration high yield bonds can be a good income solution in our current environment. With lower duration, these bonds tend to be less sensitive to changes in interest rates. They also have the potential to generate attractive risk-adjusted returns. As such, adding them to a fixed-income allocation may improve the overall risk/ return profile of the portfolio.

Short Duration
High Income Bond
The Fund's focus is on US short duration high yield bonds to achieve long-term potential capital appreciation and income.

  • US economic statistics are encouraging, with the gross domestic product (GDP) showing a strong rebound in Q3 2016, with positive contribution after five negative quarters.
  • Relative to its counterparts in the global fixed income markets, US high yield corporate bonds offer higher yields.
  • Over half of the portfolio bond holdings are of BB rating1. Higher quality high yield bonds have significantly lower default rates than lower quality high yield bonds.
1Source: Allianz Global Investors, as at 30/11/2016

Do you know?

Duration is a measure of a bond’s interest-rate sensitivity expressed in years. If rates were to rise one (1) per cent, a bond portfolio with a duration of 10 years would be expected to lose 10 per cent of its value as it adjusts to the new interest-rate environment. By contrast, a one (1) per cent rate hike would cause a portfolio with a duration of 1.5 years to lose 1.5 per cent of its value.

Important Notice

  • The Fund aims at long-term capital appreciation and income, investing primarily in US short duration high yield bond.
  • The Fund is exposed to significant risks which include investment/general market, creditworthiness, counterparty and interest rate changes risks.
  • The Fund may invest in high-yield (non-investment grade and unrated) investments and convertible bonds which may subject to higher risks, such as risk of a call, creditworthiness, default, interest rate changes, general market and liquidity risks and therefore may increase the risk of loss of original investment.
  • The Fund’s investments focus on the U.S, which may reduce risk diversification.
  • The Fund may invest in financial derivative instruments ("FDI") for efficient portfolio management (including for hedging) which may expose to higher counterparty, liquidity and market risks. The Fund will not invest extensively in FDI for investment purpose.
  • Dividend payments may, at the sole discretion of the Investment Manager, be made out of the Fund’s capital or effectively out of the Fund’s capital which represents a return or withdrawal of part of the amount investors originally invested and/or capital gains attributable to the original investment. This may result in an immediate decrease in the NAV per share and the capital of the Fund available for investment in the future and capital growth may be reduced.
  • This investment may involve risks that could result in loss of part or entire amount of investors’ investment.
  • In making investment decisions, investors should not rely solely on this material.

Other US Income Strategies
Allianz Income and Growth
Setting in place Opportunities for Income and Growth
3
Focusing on US market investments, there are three disciplines and one goal: Multiple sources of income and potential capital growth.

  • This Fund adopts a “three-sleeve” approach to provide potential income and capital appreciation.
  • Aims to deliver potential income, monthly payouts (yields are not guaranteed, dividends may be paid out from capital)2.
  • Despite all the uncertainty in the markets, the fundamentals of US corporations remain strong: balance sheets are stronger, leverage is lower and cash levels remain high. US high yield bonds, convertible bonds, high quality US equities offer extensive and compelling investment opportunities for investors.
2 Dividend payments may, at the sole discretion of the Investment Manager, be made out of the Fund's capital or effectively out of the Fund's capital, which represents a return or withdrawal of part of the amount investors originally invested and/or capital gains attributable to the original investment. This may result in an immediate decrease in the NAV per share and the capital of the Fund available for investment in the future, and capital growth may be reduced. Dividend payments are applicable for Class AM Dis (monthly distribution) and for reference only but not guaranteed. Positive distribution yield does not imply positive return. For details, please refer to the Fund's distribution policy disclosed in the offering documents.

3 The allocation of the Fund’s investments across asset classes may vary substantially from time to time.

Important Notice

  • The Fund aims at long-term capital appreciation and income, investing primarily in a combination of common stocks and other equity securities, debt securities and convertible securities. The allocation across these asset classes varies substantially from time to time.
  • The Fund is exposed to significant risks which include investment/general market, company-specific, creditworthiness and interest rate changes risks.
  • The Fund may invest in high-yield (non-investment grade and unrated) investments and convertible bonds which may subject to higher risks, such as risk of a call, credit, default, interest rate changes, general market and liquidity risks and therefore may increase the risk of loss of original investment.
  • The Fund’s investments focus on U.S. and Canada, which may reduce risk diversification.
  • The Fund may invest in financial derivative instruments ("FDI") for efficient portfolio management (including for hedging) which may expose to higher counterparty, liquidity and market risks. The Fund will not invest extensively in FDI for investment purpose.
  • Dividend payments may, at the sole discretion of the Investment Manager, be made out of the Fund’s capital or effectively out of the Fund’s capital which represents a return or withdrawal of part of the amount investors originally invested and/or capital gains attributable to the original investment. This may result in an immediate decrease in the NAV per share and the capital of the Fund available for investment in the future and capital growth may be reduced.
  • This investment may involve risks that could result in loss of part or entire amount of investors’ investment.
  • In making investment decisions, investors should not rely solely on this material.

Allianz US High Yield
Carving out US High Yield Opportunities with an Eagle’s View
  • During the four periods of rising rates since 1988, high yield bonds outperformed high quality bonds by an average of 1.59%, and outperformed Treasuries by an average of 3.02%4.
  • The US high yield bonds offer higher coupon payouts compared to US Treasuries and other investment grade credits.
  • Aims to deliver potential income, monthly payouts (yields are not guaranteed, dividends may be paid out from capital)5.
4 Source: Bloomberg, Morningstar Direct as at 30 June 2015. High-quality bonds are represented by the Barclays US Aggregate Index and high-yield bonds by the BofA Merrill Lynch US High Yield Master II Index.

5 Dividend payments may, at the sole discretion of the Investment Manager, be made out of the Fund's capital or effectively out of the Fund's capital, which represents a return or withdrawal of part of the amount investors originally invested and/or capital gains attributable to the original investment. This may result in an immediate decrease in the NAV per share and the capital of the Fund available for investment in the future, and capital growth may be reduced. Dividend payments are applicable for Class AM Dis (monthly distribution) and for reference only but not guaranteed. Positive distribution yield does not imply positive return. For details, please refer to the Fund's distribution policy disclosed in the offering documents.

Important Notice

  • The Fund aims at long-term capital appreciation and income, investing primarily in US corporate bonds rated below the investment grade.
  • The Fund is exposed to significant risks which include investment/general market, creditworthiness and interest rate changes risks.
  • The Fund may invest in high-yield (non-investment grade and unrated) investments which may subject to higher risks, such as credit, default, interest rate changes, general market and liquidity risks and therefore may increase the risk of loss of original investment.
  • The Fund may invest in financial derivative instruments ("FDI") for efficient portfolio management (including for hedging) which may expose to higher counterparty, liquidity and market risks. The Fund will not invest extensively in FDI for investment purpose.
  • Dividend payments may, at the sole discretion of the Investment Manager, be made out of the Fund’s capital or effectively out of the Fund’s capital which represents a return or withdrawal of part of the amount investors originally invested and/or capital gains attributable to the original investment. This may result in an immediate decrease in the NAV per share and the capital of the Fund available for investment in the future and capital growth may be reduced.
  • This investment may involve risks that could result in loss of part or entire amount of investors’ investment.
  • In making investment decisions, investors should not rely solely on this material.

For more details about this series of funds, please contact your bank’s relationship manager or contact us on the hotline below:

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.

Investment involves risks, past performance is not indicative of future performance. Investors should read the offering documents for further details, including the risk factors, before investing. This website has not been reviewed by the HK SFC. Issued by Allianz Global Investors Asia Pacific Limited.