In today’s volatile market, getting from risk to reward requires active management. What active management offers: buffer against volatility while delivering a steady 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.

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

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.

Reduced Sensitivity to Interest Rates

AllianzGI Short Duration High Income Fund has a lower duration, as compared to Core bonds which are represented by Bloomberg Barclays U.S. Aggregate Bond Index.

Source: IDS, Allianz Global Investors. As of 9/30/2016.

Provide Investors with a Strong Risk/Reward Profile Over Time

 

Sources: AllianzGI, Morningstar. Data as of first full month after fund inception 11/1/2011 – 9/30/2016. Class I shares. It is not possible to invest directly in an index. Performance quoted represents past performance. Past performance is no guarantee of future results. High Yield Bonds represents the BofA Merrill Lynch US High Yield Master II Index. EM Bonds represents JPM EMBI Global Index. Core Bonds represents Bloomberg Barclays US Aggregate Bond Index. 10-Year Treasury represents US Treasury T-Bill 10 Year. 5-Year Treasury represents US Treasury T-Bill 5 Year. 1-3 Year US Govt. Credit represents Bloomberg Barclays US Government/Credit 1-3 Year Index. 1-3 Year Treasury represents Bloomberg Barclays 1-3 Year US Treasury Index.

*AllianzGI Short Duration High Income Fund Class I is a US onshore fund and is not registered by the Monetary Authority of Singapore and therefore not available for Singapore retail investors. Allianz US Short Duration High Income Bond is a Luxembourg domiciled fund. Both funds are managed by the same portfolio management team with the same investment philosophy and approach. The difference between the two funds is that the US onshore fund is allowed to have bank loan holdings. This is for information only and does not constitute an offer for sale.

Improving Returns

Adding AllianzGI Short Duration High Income Fund to a core fixed-income allocation may improve risk-adjusted returns

Sources: IDS, Allianz Global Investors. Data as of first full month after fund inception 11/1/2011 – 9/30/2016. Class I shares. Core Bonds represents the Bloomberg Barclays US Aggregate Bond Index. This does not represent the performance of an actual portfolio. It is not possible to invest directly in an index. Performance quoted represents past performance. Past performance is no guarantee of future results. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Current performance may be lower or higher than performance shown. For performance current to the most recent month-end, visit our website at us.allianzgi.com.

*AllianzGI Short Duration High Income Fund Class I is a US onshore fund and is not registered by the Monetary Authority of Singapore and therefore not available for Singapore retail investors. Allianz US Short Duration High Income Bond is a Luxembourg domiciled fund. Both funds are managed by the same portfolio management team with the same investment philosophy and approach. The difference between the two funds is that the US onshore fund is allowed to have bank loan holdings. This is for information only and does not constitute an offer for sale.

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.

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
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.

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.

For more information about our funds, please visit our main websitemain website. Alternatively, you may contact your bank relationship manager or financial adviser for more information on the funds. Click hereClick here to view the list of our distribution partners.
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. Unit value and income therefrom may fall or rise. Past performance of the fund manager(s) and the fund is not indicative of future performance. Investment involves risks including the possible loss of principal amount invested and risks associated with investment in emerging and less developed markets. Investors should read the fund prospectus, available from the local representative or any of its appointed distributors, for further details including the risk factors, before investing. The Fund may invest extensively 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. This material has not been reviewed by the Monetary Authority of Singapore (MAS). MAS authorization/recognition is not a recommendation or endorsement. Issued by Allianz Global Investors Singapore Limited (12 Marina View, #13-02 Asia Square Tower 2, Singapore 018961, Company Registration No. 199907169Z).