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Fixed Income:

60 Years of
Experience
Performance through smart risk
taking
March 2017
Agenda

A Deep-rooted Fixed Income Our US Income and Growth

1 tradition 6 Capabilities

Our Advanced Fixed Income Selected Funds Highlights

2 Capabilities 7
Our Asian Fixed Income Target Maturity Funds

3 Capabilities 8
Our European Fixed Income Swing Pricing

4 Capabilities
9
Our Emerging Market Debt
5 Capabilities

2
1
A Deep-rooted Fixed Income
Tradition
3
An Identity Shaped by
our Allianz Culture

120 years managing risk 60 years of fixed income


experience
Leading Global Insurance
company One of the leading fixed
income managers in Europe
Strong rating1: AA
Common DNA with EUR 201 Bn. AuM3
Solvency ratio2: 218%
Performing by understanding, Fixed income represents
taking and managing actively around 40 % of company
risk in a smart way assets under management

1 Insurer financial strength rating from S&P: AA, from Allianz Fact Sheet, 16/02/2017
2 Source : Allianz Fact Sheet. Data as of 16/02/2017
3 Source: Allianz Global Investors, as at 31/12/2016. Fixed income numbers including money market 4
Regional Focus and Global Reach:
Our Key to Success

Franck Dixmier - Global Head of Fixed Income, CIO Fixed Income Europe

Global scope Regional scope

Global Head of Fixed Income scope Regional scope

Advanced Emerging Market Asia Pacific Conviction Corporate


Fixed Income Debt Fixed Income Fixed Income Credit
Maxence Mormde Greg Saichin David Tan Mauro Vitorrangeli Alexandre Caminade
CIO Advanced Fixed CIO Emerging Market CIO Fixed Income Asia CIO Conviction Fixed CIO Credit Europe
Income Debt Pacific Income

5
Allianz Global Investors Fixed Income Capabilities
Long Tradition and Selective Innovation

1950s 1960s 1980s 2000s 2011 2012 2014


AllianzGI AllianzGI launches AllianzGI launches AllianzGI US AllianzGI launches AllianzGI is one of AllianzGI launches
establishes its first the first ever Fixed the first ever Fixed combines expertise the first ever fund the first asset one of the first
Fixed Income team Income fund in Income fund in Italy in high yield bonds, allowing European managers to invest short duration
in Paris (1950) Germany (1966) (1984) convertibles and retail investors to in expertise funds that can
equity to build the invest in the dedicated to invest in the whole
Income and Growth Chinese Renminbi infrastructure loans emerging market
strategy (2004) (2011) spectrum.

1957 1971 1979 1990 1992 1999 2008 2010 2012 2013 2015
Treaty of Rome End of Bretton Oil Crisis German Black Creation of Global Financial EU-IMF bailout ECB plegdes to do US Fed Greek Crisis
Establishing the European Woods standard reunification Wednesday the Euro Crisis and package for 'whatever it takes' Tapering
Economic Community attack on British Quantitative Greece to save euro
(EEC) Pound Easing

AllianzGI has successfully expanded its fixed income capabilities over multiple market cycles

Allianz Global Investors (AllianzGI) refers to the predecessor companies at that time. The corporate names differ. Source: Allianz Global Investors. 6
Allianz Global Investors Fixed Income Capabilities
Long Tradition and Selective Innovation

1950s 1960s 1980s 2000s 2011 2012 2014


Establishment of Launch of the first Launch of the first The US team Launch of the first AllianzGI is one of Launch of the first
the first Fixed ever Fixed Income ever Fixed Income combines expertise ever fund allowing the first asset short duration
Income team in fund in Germany fund in Italy (1984) in high yield bonds, European retail managers to invest funds that can
Paris (1950) (1966) convertibles and investors to invest in expertise invest in the whole
equity to build the in the Chinese emerging market
dedicated to
Income and Growth Renminbi (2011) infrastructure loans spectrum with a
strategy (2004) unique matrix
approach

Allianz Global Investors (AllianzGI) refers to the predecessor companies at that time. The corporate names differ. Source: Allianz Global Investors. 7
Selected Funds

Advanced Fixed Income

Fund name Main characteristics

Allianz Advanced Fixed Income Short Duration Short duration Euro bond fund with broad investment universe

Allianz Enhanced Short Term Euro Fund for ultra short-term EUR bonds enhanced by fixed-income and FX investments

Asia

Fund name Main characteristics

Allianz Flexi Asia Bond Fund for Asian bonds denominated in local currencies or international reserve currencies

Allianz Renminbi Currency Fund for deposits denominated in Renminbi

Allianz Renminbi Fixed Income Fund for deposits and bonds denominated in Renminbi

8
Selected Funds

Europe

Fund name Main characteristics

Allianz Flexible Bond Strategy Bond fund focusing on Europe with highly flexible duration policy

Allianz Euro Bond Fund EUR bond fund with medium duration and expanded investment range

Allianz Rentenfonds EUR bond fund with medium duration

Allianz Mobil-Fonds Fund for short-term Euro bonds

Allianz Convertible Bond Fund for convertible bonds focusing on Europe

Allianz Euro Investment Grade Bond Strategy Fund for investment-grade bonds from the Eurozone

Emerging Market Debt

Fund name Main characteristics

Allianz Emerging Markets Bond Fund Fund for emerging market bonds (largely EUR-hedged)

Allianz Emerging Markets Bond Extra 2018 Fixed maturity fund focusing on emerging markets bonds

Allianz Emerging Markets Short Duration Defensive Bond Fund for emerging markets bonds with short duration
9
Selected Funds

US Income and Growth Strategies

Fund name Main characteristics

Allianz Income and Growth1 Fund for high-yield bonds, convertible bonds and equities from the U.S. (with supplemental
option strategy)

Allianz US High Yield Fund for high-yield corporate bonds from the U.S.

1 Allianz Income and Growth combines high yield, convertibles and equities and is managed by the US Fixed Income team 10
The Role of Performance & Portfolio Risk
Our stewardship role enables us to promote strong, sustainable
investment performance.

We UNDERSTAND We ACT

the risk-return payoff structure of our 1. Share our analytics and meet with PMs on
an ongoing basis, challenging them to stay
investment strategies
active and outperform consistently.

through our proprietary analytics and 2. Generate actionable insights for CIOs
comprehensive portfolio reviews through our quarterly performance reviews.

from the vantage point of being 3. Enhance our tools and analytics continuously
globally embedded into the investment in order to support new investment ideas or
platform strategies.

4. Provide transparency on company-wide


investment performance to the Global and
Regional Executive Committees.

11
Quarterly Performance Reviews
A well-established portfolio review framework, feeding back into the
investment process
Performance & Portfolio Risk lead the Reviews, in
Quarterly Performance partnership with the CIOs, and in the interim provide
Reviews ongoing advice to PMs

Risk-Adjusted PMs are asked to present on their strategy and are


Performance* then challenged on performance

Other functions also attend and provide feedback


Portfolio
(Product Specialists, Sales / Distribution, Risk
Implementation*
Controlling)

Portfolio Selected portfolios are given priority on the agenda,


Construction* especially those with significant performance or AuM
dispersion
Idea
Generation* Action Points are carried forward to the next Review
sessions until they are resolved

Research* Non-discretionary or illiquid strategies (e.g.,


insurance-related mandates, infrastructure equity) are
reviewed on a bi-annual basis

*These steps represent a generic investment process, which may differ by investment strategy. 12
Portfolio Analytics
Integrated and client-centric approach to analyzing active returns
and risks*

1. Active Returns: Are portfolio returns


explainable, intentional and sustainable?
Active
Management
2. Active Risks: Are portfolio risks explainable,
intentional and manageable?
Active Active
Returns Risks
3. Risk-Return Payoff: Is the investment strategy
Client-
Centric harvesting sufficient alpha per unit of risk?

Return Risk-
Return
Risk 4. Client-Centric: Can we enhance clients risk-
Payoff return payoff through a broader opportunity set?

*Quarterly, Monthly and Weekly analytics reports are produced independently by IDS GmbH (separate subsidiary of Allianz SE), using a selection of computational models, e.g. APT, Wilshire. 13
2
Our Advanced Fixed Income
Capabilities
14
Regional Focus and Global Reach:
Our Advanced Fixed Income Capabilities

Franck Dixmier
Global Head of Fixed Income
CIO Fixed Income Europe

Most asset managers try to maximize


performance. Advanced Fixed Income
optimizes the risk-adjusted performance for
each mandate.
Maxence Mormde
Advanced Fixed Income
Maxence Mormde, CFA
CIO Advanced Fixed
Income

Source: Allianz Global Investors; data as at 30.11.2016. 15


Advanced Fixed Income
Characteristics

Maxence Mormde, CFA


CIO Advanced Fixed Income

Taking Advantage of Global Fixed Income Market Inefficiencies While Keeping Risks Under Control

Smart tailored approach engineered for global risk constrained strategies


Active fundamental management by an experienced team exploiting market inefficiencies through a deep analytical approach
Disciplined process adhering to stringent risk guidelines for a systematic optimization of portfolios
Experienced team and stable leadership
Same Strategy Manager since 1999
15 dedicated portfolio managers averaging 13 years of experience

Solution for superior risk-adjusted performance

Source: Allianz Global Investors; data as at 31/10/2016.

16
Advanced Fixed Income
Investment Process

1 2 3 4
Portfolio construction according to
Research Market analysis Trading
individual investor requirements

Risk
AllianzGI Active Positioning Process Active Management
Management
Advanced
Monetary Covered/Sec 1. Universe analysis
Analytics policy uritized
State of the art
methods for
Risk decomposition
scientific market Yield curve Bank bonds
Liquidity analysis Implementation
analysis

Duration
Corporate Contribution to the
bonds 2. Fund positioning TE/VaR
selection of
Allocation: DVaR/CVaR1,2
Market High yield - Safe Spreads Risk individual securities
Volatility
bonds - Tactical Allocation Optimisation
Insight
Exchange Inflation
Currencies Selection:
GPC/E&S/Regional linked bonds
FI Units - Security selection
Emerging - Primary markets
Swaps
countries

Integration of active strategies and risk


Input Theme orientation requirements Portfolio

Risk Controlling
A performance of the strategy is not guaranteed and losses remain possible.
1 DVaR stands for Dynamic Value at Risk; CVaR stands for Conditional Value at Risk
2 Benchmark & Risk constraints are determined by the ALM Manager 17
The Advanced Fixed Income investment process
Global coverage for tailored optimized risk-adjusted portfolios

Investors
Investors specific
Advanced Analytics Active
optimized guidelines and
Positioning
portfolio risk/return profile*

Trading
Desk

Structured research through Unconstrained positioning Takes into account all investors
proprietary tools guidelines
Taking into account all risk
Blend of Top-Down/Bottom-up dimensions Order execution via Trading Desk
Global coverage Monthly and ad-hoc review Optimized risk-adjusted returns

A performance of the strategy is not guaranteed and losses remain possible.


* In the case of mutual funds, mutual fund investment guidelines apply. 18
The Advanced Fixed Income Team
A diverse skill-set: Our experts are portfolio managers and research analysts
CIO Advanced Fixed Income

Maxence Mormde, CFA


Diplme de Grande Ecole ESCP Europe, Diplom Kaufmann, FF/NY 17 17
Master's in Management, Diplme dEtudes Approfondies in Wirtschaftsmathematik und konometrie

AFI Global Allocation Team AFI Global Selection Team AFI Global SCF* Team

Ralf Jlichmanns, CFA Roland Rbesam Christian Tropp, CFA


FF 21 21 FF 17 17 NY 10 10
Diplom-Volksw irt Diplom-Volksw irt Diplom-Volksw irt

Klaus Kusber Kornel Schweers Stephanie Fiechtner


FF 22 9 FF 19 17 FF 4 4
Diplom-Volksw irt Diplom-Volksw irt MSc Betriebsw irtschaftslehre

Lars Dahlhoff, CFA Andreas Hahner, MBA Arnaud Lerond


FF 9 9 FF 16 16 FF 16 2
Diplom-Kaufmann MSc Mathematik MSc Financial Techniques

Dr. Johannes Reinhard Rasim Kenar, MBA Dr. Bjrn Fastrich


FF 16 16 FF 4 1 FF 8 2
Dr. Physik, Diplom Physiker BSc Engineering Dr. Statistik und konometrie, MSc Volksw irtschaftslehre

Dr. Matthias Grein, CFA Dr. Tobias Regele


FF 9 3 FF 5 1
PhD/MSc Volksw irtschaftslehre, Dipl.-Wirtschaftsmathematik Dr. Finanzw irtschaft, MSc Mathematik

Dr. Michael Verhofen, CFA


FF 14 9
Dr. Finanzw irtschaft, MSc Buchhaltung & Finanzw irtschaft

Dr. Fabian Lutzenberger


FF 4 1 Standort: FF Frankfurt, NY New York
Dr. Wirtschaftsmathematik, Diplom-Kaufmann

Industrieerfahrung in Jahren/ Betriebszugehrigkeit in Jahren

All members of the Advanced Fixed Income Team have a risk management and or multi asset background.
As of 01.06.2016.
* SCF: Securitized, Covered & Financials. 19
Advanced Fixed Income
Global reach for individualised solutions

Advanced Analytics Advanced FI Portfolio Management


Single Framework Global Coverage Single Approach Polymorphic Strategies
80 countries under sovereign risk analysis Global Alpha: Target return defined as EONIA/LIBOR + xx bps
103 SSA issuers (Supranationals, Sub-sovereign & Agencies) Buy & Watch (B&W)
400 approx. investment-grade non-financial corporate issuers Enhanced Fixed Income (EFI): Lower tracking-error strategy
30 non-investment-grade issuers Advanced Fixed Income (AFI): Higher tracking-error strategy
33 insurance companies
190 banking institutions
220 cover pools
1000 approx. securitized transactions (ABS/MBS)
Strategy Global Alpha B&W EFI AFI
One target: an internal credit opinion for all global asset classes
Region Euro US Global Euro US Global Euro US Global Euro US Global

Aggregate
Sovereign
Universe
Covered /
Securitized
IG
Corporates
Emerging
Markets
This map represents the countries covered under the sovereign risk analysis.

AFI offers a truly global coverage across all asset classes and market segments.

A performance of the strategy is not guaranteed and losses remain possible. Source: AllianzGI Advanced Fixed Income Team, as of 01.08.2016. 20
Advanced Fixed Income
Global Sovereign Issuers

Example: Romania
Debt Sustainability RE-Rating Sovereign Strength Indicator
We perform a variety of analysis of the In 2013 our RE-Rating analy-sis Within the SSI we analyse the
dynamics of sovereing debt. showed that the previous downgrade is fundamental, governance and political
not justified by fundamentals, rather we strength.
For example, one analysis shows that
ex-pected the country rating to be lifted
despite its current budget balance of - Romania ranks amongst its European
to IG (e.g. BBB-).
2.3%, Romania could go as far as - peers in as far as our fundamental
10.4% and still meet the Maastricht On May 16th 2014 S&P announced its strength indicator is concerned.
criteria within three years time. first IG rating to Romania since almost
The total SSI score even outpaces
six years.
most peripheral countries.

By combining the results of the analysis above, the Advanced Fixed Income was able to invest with confidence into
Romanian government bonds.

Source: Allianz Global Investors, as at 15 May 2014. This is no recommendation or solicitation to buy or sell any particular security. A security mentioned as example above will not necessarily
be comprised in the portfolio by the time this document is disclosed or at any other subsequent date. This is for guidance only and not indicative of future allocation. 21
3
Our Asian Fixed Income Capabilities

22
Regional Focus and Global Reach:
Our Asia Pacific Fixed Income Capabilities

Franck Dixmier
Global Head of Fixed Income
CIO Fixed Income Europe

Flexi Asia Bond China Strategic Bond

Offshore Renminbi Fixed Income


Dynamic Asian High Yield Bond
Bond
Asia Pacific
David Tan
Dynamic Asian Investment Grade
CIO Fixed Income Asia
Pacific Bond

We offer a range of products to meet individual clients risk and return objectives

Source: Allianz Global Investors, as at January 2017. 23


Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Our Asian Fixed Income Expertise

Experienced investment team


15 member team with an average industry
experience of 14 years. The 8 portfolio managers
3 have an average investment experience of 16 years

Asia centric investment approach supported by


local presence + access to local market insights
1 AllianzGI: Singapore + Hong Kong + Taiwan

Access to our global investment platform


4 Well-integrated with our global investment
Specialist in Asian fixed income investing platform (e.g. Global Policy Council,
2 AllianzGI Singapore has invested in Asian bonds
Economics and Strategy Teams, regional
fixed income teams) for additional insights on
since 2006; both in a benchmark
global macro events and themes.
oriented/constrained and highly active
unconstrained framework

24
Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Our RMB Fixed Income Market Expertise

Specialist in RMB fixed income market


1 AllianzGI was the first investment manager to launch a UCITS III
Luxembourg SICAV mutual fund that offers international investors
access to offshore RMB bonds
Experienced investment team
2 Locally based RMB specialists which are well integrated with our Asian
fixed income and equity resources (including the China equity team) for
additional regional, sector and company insights.

Prudent risk control is key to our approach


3 We have a strong emphasis on liquidity management and on
maintaining a high quality portfolio with proven track record managing
through more volatile and low liquidity periods

Track record
4 Proven track record of delivering consistent outperformance in this
asset class with a relatively low level of volatility.

25
Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Investment Team

David Tan
CIO, Fixed Income, Asia Pacific
24 years experience

Regional Asia-Pacific Bonds (SG) China/ Hong Kong Bonds (HK) Taiwan Bonds (Taipei) Product Specialist (SG)

Mark Tay Yoke Sei Tan Helen Lam Grace Lin Dianna Enlund
Head of Fixed Head of Credit Head of Hong Kong Head of Taiwan Fixed Senior Product
Income, Singapore Research, Asia Fixed Income Income Specialist
21 yrs experience Pacific 22 yrs experience 19 yrs experience
19 yrs experience
26 yrs experience

Sam Liu Rachel Lim


Garreth Ong Lucinda Zhou Morgan Lau
Senior Fixed Income Product Specialist
Portfolio Manager Credit Analyst Portfolio Manager Analyst 4 yrs experience
14 yrs experience 11 yrs experience 15 yrs experience 9 yrs experience

Emerging Market Debt (HK)


Jiayi Yew Juyong Low Kelvin Chow
Daniel Ha
Portfolio Manager Credit Analyst Portfolio Analyst
Portfolio Manager,
6 yrs experience 8 yrs experience 10 yrs experience Global Emerging
Market Debt
10 yrs experience

Source: Allianz Global Investors, as at January 2017. 26


Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Asia Fixed Income


Investment Process Overview
Portfolio
Top-Down Analysis Portfolio Construction Monitoring &
Review

Global Inputs Portfolio Risk


Country allocation
(Global Policy calibration measurement Ex-post review
Council GPC) of portfolio
Currency allocation
performance

Client requirements
Active strategies
and risk using
Duration independently
Conviction generated
Macroeconomics Yield curve reports from IDS
Portfolio
Market Views

Credit allocation Monthly portfolio


performance
Valuations and risk review
Sector allocation
with the CIO
Inflation-linked
Technicals Credit selection Relative value
allocation

Integration of active strategies, portfolio Validation of views


Market views translated into active strategies
constraints and bottom-up selection & positioning

Risk Management

Source: Allianz Global Investors. The information provided above is used to demonstrate our investment approach. It is not a recommendation or advice to buy or sell.
There is no guarantee that these investment strategies and processes will be effective under all market conditions and investors should evaluate their ability to invest for a long-term based on their 27
individual risk profile especially during periods of downturn in the market.
Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Flexi Asia Bond


Characteristics

David Tan
Chief Investment Officer, Fixed Income Asia Pacific

Active portfolio management: utilizes a dynamic allocation approach to capture opportunities during different market cycles rather than
being constrained by benchmark weights
Disciplined investment process with a systematic approach to top-down strategies
Fundamental credit analysis to identify attractively-valued bonds. Focus on issuers that exhibit stable or improving balance sheets,
sound business models, access to funding and good liquidity levels.
Dynamic, broad, unrestricted diversification across countries and sectors
Risk and performance analysis is actively incorporated in the investment process to validate views and strategies, ensuring portfolio
positions add value

Flexible, dynamic allocation approach to capitalize on Asian fixed income opportunities during different
market cycles rather than being constrained by benchmark weights.

Source: Allianz Global Investors, as at January 2017. 28


Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Flexi Asia Bond


Investment Approach
Dynamic Allocation Approach Amongst Fixed Income Instruments
Riding out the volatility of different cycles

Strong growth and Slow growth and low Recession and Recovery and low
high inflation inflation deflation inflation
Economic Growth

Time Horizon
Instrument type

Convertible bonds Government & agencies Cash equivalents, Corporate bonds


bonds High yield credits
Inflation-linked bonds Government bonds
High grade credits
High grade credits
Supranational bonds
Perpetual bonds
Supranational bonds
Source: Allianz Global Investors, as at January 2017. 29
Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Dynamic Asian High Yield Bond


Characteristics

Mark Tay
Head of Fixed Income, Singapore

The strategy seeks to provide income and long-term capital appreciation by investing primarily in Asian high yield credits with dynamic
hedging to reduce downside risks
Active approach focused on fundamentally-driven, bottom-up security selection
Flexibility to diversify into non-benchmark, unrated or CNH-denominated issues for additional sources of value-add
Top-down active management of portfolio downside risks
Ex-post risk measurement and performance analysis serve as validation of ex-ante risk measurements and investment strategies

Capture yield pick-up offered by Asian high yield bonds whilst actively managing downside risks.

Source: Allianz Global Investors, as at January 2017. 30


Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Dynamic Asian High Yield


Credit Research Process

Detailed Credit Research: qualitative & quantitative factors

Market and Business Environment Legal . Aspects


Economic and credit cycle Capital structure/structural
subordination
Industry dynamics
Covenants/Guarantees
Business model / competitive position
Organisational structure (esp. for
Management quality
Parent/subsidiary links and capital . . high yield issuers)

structure transparency Credit


CREDIT Selection
SELECTION . .
Financial Strength Analysis Relative Value Analysis
. Financial statement analysis Spread . analysis: historical/ versus
Key credit metrics (eg. Debt/EBITDA) peers
Pro-forma analysis of future prospects Yield/ carry
Free cash flow projections Ratings and risk of ratings changes
Liquidity and liability risk management Liquidity, supply & demand technicals

Source: Allianz Global Investors. The above is for illustrative purposes only and is not a recommendation or advice to buy or sell.
There is no guarantee that these investment strategies and processes will be effective under all market conditions and investors should evaluate their ability to invest for a long-term based on their 31
individual risk profile, especially during periods of downturn in the market.
Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Dynamic Asian High Yield


Case Study Indonesia Property Sector

LPKRIJ 04/11/22 7% Corp1,2,3 Lippo Karawaci Tbk Co1,2,3


LPKRIJ 7% 04/11/22 Corp
110 Investment Case
Lippo Karawaci is one of the largest Indonesian property developers. It
105
is engaged in development, management and operation of retail malls,
hospitals, hotels, condominiums and residential townships throughout
100 Indonesia. It has a sizeable landbank size of around 1,330 hectares.
Lippo has a significant source of recurring income, particularly from the
95 healthcare segment. This contributes 47% of revenue and provides
stable cash flow generation.
90 The company has been very successful in operating an asset light model
with successful spinning off of assets into REITs and recycling cash. It
85 has two REITs one retail mall and one hospital REIT listed on the
Singapore Stock Exchange.
80 Filter Criteria
2015-09-16 2015-12-22 2016-03-30 2016-07-05 2016-12-30
Expected Return: 7.00% coupon as a good carry play
Key data as at: 30 December 2016 Allow investors to ride on the rising Indonesia consumption story, helped
ISIN: XS1054375446 by lower interest rate environment and loosening property controls

Yield / Price: 6.37% / 102.75 Risks


Currency: USD Cyclical property development business.
Aggressive expansion plans may lead to higher capital expenditure
Bond rating: Moodys: Ba3, S&P: B+, Fitchs: BB-

1 Past performance is not a reliable indicator of future results. 2 This is not a recommendation or solicitation to buy or sell the above-mentioned security. 3 The bond mentioned as an example
above may not necessarily be held in our portfolios.
Source: Bloomberg Finance L.P., Allianz Global Investors, as at 30 December 2016. 32
Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Dynamic Asian Investment Grade Bond


Characteristics

Garreth Ong
Portfolio Manager

The strategy aims to generate yield pick-up whilst managing drawdown risks to achieve consistency and stability of income
Fundamental bottom-up driven credit selection approach to identify attractively-valued bonds
Invest only in investment grade credits to ensure high quality portfolio
Tactical top-down macro strategies may be implemented to minimize drawdowns relating to interest rate and credit risk
Risk and performance analysis is actively incorporated in the investment process to validate views and strategies, ensuring portfolio
positions add value

Offers yield-up from an investment grade only portfolio that actively manages portfolio drawdown risks

Source: Allianz Global Investors, as at January 2017. 33


Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Dynamic Asian Investment Grade


Case Study Utilities Sector

ADTIN 08/03/26 4% Corp1,2,3 Adani Transmission Ltd1,2,3


ADTIN 4% 08/03/26 Corp
104 Investment Case
102
Listed on the India Stock Exchange (market cap US$ 664mn), ADTIN
is one of the largest private-sector power transmission companies in
100
India. The company operates four transmission lines around the country,
with a network of more than 5,000 kilometers.
98 ADTIN benefits from the stable regulatory framework for India power
transmission which operates under a 25-year cost-plus tariff structure
96 (revised every 5 years), with all major costs passed through such that
pre-tax ROE is about 15.5%.
94 ADTINs good operating performance has contributed to stable revenue since
revenue is paid based on availability and ADTINs average availability has
92 consistently outperformed the regulatory requirement.

90 Filter Criteria
2016-7-28 2016-8-05 2016-8-16 2016-9-16 2016-10-14 2016-11-30
Expected Return: 4.00% coupon as a stable carry play
Key data as at: 30 December 2016 Enable investors to benefit from the economic growth story of India and
stay within a defensive sector
ISIN: XS1391575161
Risks
Yield / Price: 4.73% / 94.48
Exposure to financially weak state-owned electricity distribution
Currency: USD companies
Bond rating: Moodys: Baa3, S&P: BBB-, Fitchs: BBB- Short operating track record
Aggressive expansion plans may increase capital expenditure
1 Past performance is not a reliable indicator of future results. 2 This is not a recommendation or solicitation to buy or sell the above-mentioned security. 3 The bond mentioned as an example
above may not necessarily be held in our portfolios.
Source: Bloomberg Finance L.P., Allianz Global Investors, as at 30 December 2016. 34
Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Renminbi Strategies
Two products providing access to opportunities in China bond market

China Strategic Bond Offshore RMB Fixed Income

Onshore: Offshore: Offshore


CNY Bond USD Bond CNH Bond
Market Market Market
Access to Chinas interest rate Yield pick-up Offers diversification to high
cycle quality multinational or
Liquid market with broad foreign corporations
Large and growing market with investor base and currently
China interbank bond market enjoys strong technical bids Yield enhancement
opening up to foreign investors from onshore investors opportunity

Source: Allianz Global Investors, as at January 2017. 35


Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Renminbi Strategies
Investment Process

1 3 4
Top-down analysis Portfolio Construction Risk Management

Global Macro Inputs Investment Term structure


guidelines positioning
Daily performance-
based risk alerts
China Macro Analysis
Monthly
independent ex-
RMB Fixed post risk analysis
Duration Yield curve Sector Income/Currency and performance
management positioning rotation Portfolio attribution
Liquidity Security Country Quarterly Portfolio
premium selection allocation Performance
Review Meeting
Counterparty/ Liquidity with the Global CIO
credit selection considerations
Credit Analysis
2
Bottom-up selection

Source: Allianz Global Investors, as at January 2017. 36


Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Renminbi Strategies: China Strategic Bond

Helen Lam
Head of Hong Kong Fixed Income

The funds objective is to provide investors a combination of long-term capital growth and income with yield enhancement opportunities
Flexibility to invest across various types of China fixed income opportunities including, USD bonds, CNH (offshore RMB) bonds and
CNY (onshore RMB) bonds
Decision to invest in CNH and/or CNY denominated bonds will be from a total return perspective
Combination of China USD and RMB bonds provides optimal return and diversification with manageable volatility and favorable risk
return profile
Credit selection focuses on quality and strategically-important China credits

Provides access to the broad range of China fixed income opportunities including offshore and onshore bonds

Source: Allianz Global Investors, as at January 2017. 37


Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Renminbi Strategies: China Strategic Bond

Investment universe across three bond


Bond Market markets, China onshore, China
Selection offshore and USD bond markets

Currency
Exposures Flexibility to invest in USD- or RMB-
denominated bonds

Interest
Rate
Exposures Target duration profile to benefit most
on risk-adjusted basis based on the
current economic cycle

Credit
Exposures
Integrate credit fundamental with
valuation in security selection

Source: Allianz Global Investors, as of January 2017. 38


Flexi Asia Bond Dynamic Asian High Dynamic Investment China Strategic Bond Offshore RMB Fixed
Yield Bond Grade Bond Income

Renminbi Strategies: Offshore RMB Fixed Income


Characteristics

Helen Lam
Head of Hong Kong Fixed Income

Fundamental credit analysis to identify attractively-valued bonds. Focus on issuers that exhibit stable or improving balance sheets,
sound business models, access to funding and good liquidity levels
Focuses on a high quality portfolio to minimize credit risks
Active portfolio management with a strong emphasis on diversification and minimizing volatility
Strong focus on liquidity risks and management
Prudent risk control with regular portfolio stress testing analysis

Focuses on a high quality portfolio to generate consistent outperformance while minimizing risk

Source: Allianz Global Investors, as at January 2017. 39


4
Our European Fixed Income
Capabilities
40
Regional Focus and Global Reach:
Our European Fixed Income Capabilities

Franck Dixmier
Global Head of Fixed Income
CIO Fixed Income Europe

CIO Fixed Income Europe scope

Conviction Fixed Income Corporate Credit


Mauro Vittorangeli, CFA Alexandre Caminade, CFA
CIO Conviction Fixed CIO Credit Europe
Income

Distinct approaches to meet and satisfy our clients needs

Source: Allianz Global Investors; Data as at 30/06/2016. 41


Conviction Fixed Income Corporate Credit

Our Risk DNA


Inherent in every Step of Portfolio Construction

In-depth Analysis
1 Market risk
Liquidity risk
Issuer risk
Counterparty risk
Downside risk: avoid heavy downgrades and default

Portfolio Management
2 Continuous Plausibility Checks
Full transparency of risk metrics
Thorough Due Diligence

Independent Risk Control (e.g. IDS, PRC)1


3
Monitoring of liquidity
Monitoring of counterparty risks
Auditing
Stress tests

1 IDS = IDS GmbH, analysis and reporting services, 100% subsidiary of Allianz SE; PRC = Portfolio Risk Controlling 42
Conviction Fixed Income Corporate Credit

Distinctive Research Capabilities


The Backbone of Superior Risk-
Adjusted Return

Executive Council
European framework/guidance
for Fixed Income Strategies
based on fundamental inputs

European Credit Analysis


Watch the downside :
Dedicated credit opinion based
on deep fundamental credit
analysis of individual issuers
to understand the credit quality
and avoid default Advanced Analytics
AllianzGI Advanced
Analytics offers a structured
framework for identifying
and exploiting inefficiencies
and asymmetries in major
global market segments
43
Conviction Fixed Income Corporate Credit

Conviction Fixed Income


Characteristics

Mauro Vittorangeli, CFA


CIO Conviction Fixed Income

Top-Down Macro Driven


Key Macro Trend analysis and Identification of Turning points
Active management of duration, country allocation and curve
Dynamic bond asset allocation linked to market cycle
No pre-defined tracking error target
Experienced Conviction Fixed Income team and stable leadership
Pre-existing fixed income teams in France and Italy have been forming the Conviction Fixed Income team since 2008
15 dedicated Portfolio Managers averaging 20 years of experience

Judgmental approach making full use of a large opportunity set to best exploit key macro trends

Source: Allianz Global Investors; data as at 30/06/2016.

44
Conviction Fixed Income Corporate Credit

Conviction Fixed Income


Investment Process

1 2 3
Key Macro Trend Analysis Active Management Portfolio construction

Global Macro Top Down Core strategies :


Approach
Duration

Country allocation

Credit allocation High degree of conviction


Strategic Tactical
strategies
Identify turning points in the Yield curve positioning
markets
Inflation

Covered bonds

Assessment of Risk Appetite Risk management


Satellite strategies follows all phases of the process

Staying ahead of the curve: focus on our expectations vs. market consensus
45 45
Conviction Fixed Income Corporate Credit

Conviction Fixed Income


Portfolio Management Team

15 portfolio managers averaging 21 years of experience


Mauro Vittorangeli, CFA (27/24)
CIO Conviction Fixed Income
Lead PM Flexible Bond Strategy
Key Macro Trend Analysis
Thierry Million (28/23) Francois Lepera (29/28) Roberto Antonielli, Vincent Tarantino (29/17)
CFA (20/20)
Head of Institutionals Euro Sovereigns, Supranationals, Country allocation, Volatility Head of Money Market
Aggregate Strategies Agencies (SSA)

Monica Zani (23/23) Franck Mugat (17/17) Yassine Oussana (14/13) Ali Ozenici (13/11)

Yield Curve Covered Bonds Money Market Money Market


Portfolio
Management
Marie Mougnaud (17/17) Ophelie Gilbert (18/18) Guillaume Zilliox (10/8) Brian Tomlinson (27/12)

Inflation/LDI1 Head of Inflation/LDI1 Money Market Global FX & Bonds

Corynne Roux-Buisson Mike Riddell (16/2)


(20/2)
UK Bonds
Credit

Dedicated
Massimiliano Maxia (19/15) Jan Simon King (11/2)
Product Specialists

Numbers in brackets reflect years of industry experience/years at Allianz Global Investors and associated companies. Data as of December 2016. 46
1 Liability-Driven Investment
Conviction Fixed Income Corporate Credit

Conviction Fixed Income


Strategies

LDI1

Euro Rate Inflation

Global Unhedged

Global Hedged

Euro Mid-Long Duration

Absolute Return

Euro Rates Short Duration

Money Markets
Duration band

- 4Y 0 10Y+
1LDI : Liability-Driven Investment.
A performance of the strategy is not guaranteed and losses remain possible. Source: Allianz Global Investors; data as of December 2016. 47
Conviction Fixed Income Corporate Credit

Conviction Fixed Income


Example : Yield curve strategies

10Yr-30Yr flattening strategy on Italian yield curve

Flattening strategy opened

Yield curve
strategies are an
important source of
alpha

To benefit from ECB QE.

Source: Bloomberg, as of 31/10/2016. 48


Conviction Fixed Income Corporate Credit

Corporate Credit
Characteristics

Alexandre Caminade, CFA1


CIO Credit Europe

Bottom-up Credit Analysis to Contain Downside Risks


Our Philosophy: Active Fundamental Management
Focus on fundamental credit analysis of the issuers
Perform relative value assessment
Anticipate major changes of underlying trends in credit markets
Experienced credit team and stable leadership
9 Portfolio Managers, 21 Credit Analysts and 3 Product Specialists

Superior risk-adjusted return over a full credit cycle

1Chartered Financial Analyst


Source: Allianz Global Investors; data as at 31/12/2016.
49
Conviction Fixed Income Corporate Credit

Corporate Credit
Investment Process

Bottom-up: Bond-picking Top-down: Tactical Overlay

Fundamental Tactical view


Valuation Technicals
Analysis
Credit exposure &
Risk Risk
Positive Attractive Good Management Sector allocation Management
Portfolio
Stable Fair Value Average
Negative Expensive Poor Overweight
Marketweight
Underweight

We focus on bond picking through bottom-up approach and adjust the credit exposure tactically

50
Conviction Fixed Income Corporate Credit

Corporate Credit Capabilities

Portfolio managers
A. Caminade, CFA1 (24/12)
CIO Credit Europe
A. Caminade, CFA1
V. Marioni (18/2) G. Docq, CFA1 (9/1) L. Talavera (15/8)2 F. Piechowski (10/2)2 H. Dejonghe (16/5)2
(24/12)
High Yield Xover Investment Grade Investment Grade Investment Grade SRI
High Yield
J. Bras, CFA1 (12/11)2 T. Gruet, CFA1 (19/11)2 D. Guichard (16/3)
SRI Convertibles Private Debt

Dedicated analysts
D. Manoux (26/5)
Head of Credit Research
D. Manoux (26/5)
A-X. Fougerat (17/5) S. Iem, CFA1 (9/5) L. Desbrosses, CFA1 (8/3) E. Daull (10/3) M. Pacquelet (1/1)
Head of High Yield
Corporates Corporates Corporates Private Debt Private Debt
Research
C. Brugre (24/1)
A. Tixier (1/1) S. Outin, CFA1 (8/3) B. de la Roncire (17/4) H. Guergouri (13/9) J. Gasser (2/2)
Head of Investment
Private debt Financials Corporates Financials Convertibles
Grade Research

Additional PMs contributing to IG Credit Research Product Specialists


O. Videau (20/18) J. Bronssard (17/3) E. Clment (8/5) P. Wrobel (20/4) T. Knigge (17/15)

C. Jung (8/4) R. Boeckel (16/2) C. Roux Buisson (19/2) S. Lounis (5/5)

R. Vesters (27/4) L. Ancona (22/22)

Source : Allianz Global Investors as of September 2016. Numbers in brackets reflect years of industry experience/years at Allianz Global Investors and affiliates.
1 Chartered Financial Analyst
2 Portfolio Managers contributing to Investment Grade Credit Research 51
Conviction Fixed Income Corporate Credit

Corporate Credit
Strategies
Investment Grade High Yield
Euro Investment Grade

Euro Credit SRI

Green Bond
Euro High Yield
Defensive1

Euro High Yield

European Convertible Bonds

Target Maturity / Target return

Private Debt

Credit opportunities
Credit rating

AAA AA A BBB BB B CCC C

1Focus on non financials.


52
A performance of the strategy is not guaranteed and losses remain possible. Source: Allianz Global Investors; data as at January 2017
Conviction Fixed Income Corporate Credit

Corporate Credit
Investment Example: Snam SpA

Snam is Europe's largest integrated gas network operator. SNAM is the


main Italian gas transport, storage and distribution operator and its
activities are fully regulated by the Italian Energy Authority.

FY2014 results
Sales up 1% and Ebitda down 1%, net debt went up 330M after a
dividend payment of 500M. FCF before dividends back to positive in the
absence of equity investments.

Forecast
Most of SNAM activity is regulated and has a very limited exposure to
volume variation. Ebitda margin should stay stable in the next few years Investment analysis
at a high level (75%). This is enough to cover the Capex but not enough
for the generous payment of dividends. This means credit ratios won't Bond issued as per January 15th, 2014 / coupon 3,25% / maturity
improve materially but should remain at current levels. The rating of 10 years (01/22/2024)
SNAM is capped by the Sovereign (stable outlook at Moodys and S&P's) Rated Baa1 by Moodys / BBB+ by S&P
and cannot be more than one notch above Italys rating. We are closely PM bought on Primary market the day it was issued at a price of
monitoring the acquisitive strategy of SNAM for which we have a stable 99,02
fundamental credit opinion. Evolution of the price (Cf. graph): from 99 up to 117 today
Evolution of the spread: from 122bp down to 72 today
Performance: +21%
We still hold the bond today

Source: Allianz Global Investors, as at March 2015. This is no recommendation or solicitation to buy or sell any particular security. A security mentioned as example above will not necessarily
be comprised in the portfolio by the time this document is disclosed or at any other subsequent date. This is for guidance only and not indicative of future allocation. 53
5
Our Emerging Market Debt
Capabilities
54
Regional Focus and Global Reach:
Our Emerging Market Debt Capabilities

Franck Dixmier
Global Head of Fixed Income
CIO Fixed Income Europe

Active allocation and agility are


key to unlocking alpha from this
ever changing market
Emerging Market Debt
Greg Saichin, Greg Saichin
CIO Emerging Market Debt CIO Emerging Market
Debt

Source: Allianz Global Investors; data as at 31/05/2015. 55


Emerging Market Debt
Characteristics

Greg Saichin (30/1)


CIO Emerging Market Debt

Active Conviction Portfolio Based on a Matrix Approach and a Decentralized Specialized Team

Dynamic management of investment opportunities, unique scanning of all segments to unlock value
Proactive risk budgeting and risk management
Transparency and liquidity : Provide clients with thorough understanding of portfolio composition (point in time and forward looking)
The senior managers in the team combine over 50 years of collective experience in EMD, High Yield and Global Credit
International team with local presence, performing fund management around the clock

Maximizing Emerging Market returns from inefficient and often mispriced investments in Sovereigns,
Corporates, local rates and FX
Source: Allianz Global Investors; data as at 31/05/2015.

56
Emerging Market Debt
Investment Process

EM Macro Research Selection Process Alpha Strategies & Portfolio Construction

Higher Lower
Market Market
Sovereign/ Risk Risk
Top down Quasi-
Sovereign
Global Factors Sovereign

Rates & FX Income

Portfolio
Sovereign view Corporate Credit Optimisation

Arbitrage Momentum

Corporate
Bottom up
Local Currency Credit
EM Macro

Single Security and Portfolio Hedging

57
Emerging Market Debt
Portfolio Management Team

Greg Saichin (30/1)


CIO Global Emerging Market Debt

NEW YORK LONDON HONG KONG / SINGAPORE

Zeke Diwan Oleksiy Soroka, CFA Shahzad Hasan Daniel Ha


Senior Portfolio Head of EM Credit Senior Portfolio Senior Portfolio
Portfolio Managers

Manager Research Manager Manager


LATAM Corporate Portfolio Manager Hard Currency Asia Corporate
& Analysts

19 years experience 19 years experience Sovereigns 8 years experience


11 years experience
Asian Credit
Vlad Naveen Kunam
Research Team
Andryushchenko Senior Portfolio Under responsibility of CIO Fixed Income Asia
Senior Credit Manager
Yoke Sei Tan: Head of Asian
Analyst, Local Currency
Credit Research
Global EM Financials Sovereigns
13 years experience 13 years experience Yanni Lam: High Grade Credit
Lucinda Zhou: Financial Institutions

Gary McAnly Eoghan McDonagh Kent Rossiter


Head of EM Fixed
Trading

Within US trading Within Asian trading platform


platform Income Trading Head of Asia Pacific
Head Trader 10 years experience Bond Trading
21 years experience 22 years experience
Specialists

Andrew Curran (25/1)


Product

Senior Product Specialist

Numbers in brackets reflect years of industry experience/years at AllianzGI and affiliates. Data as of March 2015. Source: Allianz Global Investors. 58
Emerging Market Debt
One Process, three Approaches

Core Plus Flexible Target Maturity

Allianz Emerging Markets Allianz Emerging Markets Short Allianz Emerging Markets
Fund
Bond Fund Duration Defensive Bond Bond Extra 2018

70% to 100% benchmark, rest Only sovereign & quasi sovereign


Flexible approach between strategies
Focus flexible approach strategies

BM Benchmark approach Absolute Return approach Return-Driven approach

A performance of the strategy is not guaranteed and losses remain possible. 59


Emerging Market Debt
Investment Example : Overweight Dominican Republic

Economic indicators are improving : Investment implication :


Dominican Republic is the fastest The EMD investment team bought some Dominican Republic sovereign
growing economy in Latin America at bonds on 12.12.2014 (unit price : USD 108.6).
7% As of 27.02.2015, the unit price was up 6,53% vs day of purchase, at
The fiscal and current account deficits USD 115.7.
have improved and consolidated
The economy benefits from strong
linkages to the US, where economic
outlook is improving.
Sovereign rating : B1 (Moodys), B+ (S&P), B+ (Fitch), stable watch
Government debt is 46% of GDP, in line with the median of 45% for
single B rated sovereigns
Dominican Republic is a large importer of oil (30% of total imports),
while the energy subsidies account for 2% of GDP. The 2014 and
2015 budget assumption is $98 and $92 respectively. With oil
currently in the mid-40s, there will be a big impact on the fiscal and
current account deficits
Sovereign market situation :
The sovereign has completed its funding needs for the year. The
demand for Dominican Republics bonds was so strong at the new
issuance in January that the size was increased from $1.5bn to
$2.5bn, with the final book in excess of $6bn. Source: Bloomberg as at 27.02.2015

Source: JPMorgan, Allianz Global Investors, as at March 2015. This is no recommendation or solicitation to buy or sell any particular security. A security mentioned as example above will not
necessarily be comprised in the portfolio by the time this document is disclosed or at any other subsequent date. This is for guidance only and not indicative of future allocation. 60
6
Our US Income and Growth
Capabilities
61
US Income and Growth Capabilities

Douglas G. Forsyth
CIO Income and
Growth Strategies

Income and Growth Strategies

High Yield Convertibles Income and Growth


Disciplined bottom-up Participate in upside 3 sleeves approach in high
approach to select companies potential of equities while yield bonds, convertibles
poised to benefit from positive limiting exposure to and equities to capture
fundamental change downside volatility multiple sources of income

Unique approach to identify investment opportunities

62
US Income and Growth Strategies
Portfolio Management Team

Douglas G. Forsyth, CFA1 (22/25)


CIO US Income and Growth Strategies

William (Brit) L. Stickney (17/28) Justin M. Kass, CFA1 (16/20) Michael E. Yee (22/24)
Portfolio Management / Portfolio Management / Portfolio Management /
Research / Trading Research / Trading Research / Trading

David J. Oberto (9/15) David A. Foster, CFA1 (9/21) Joanna H. Willars (11/17)

Research/Trading Research / Trading Research / Trading

Ethan Turner, CFA1 (4/11) Nicole Larrabee Rodrigues Matthew John (10/14)
(16/21)
Dedicated Research/Trading Research / Trading Research / Trading
Analysts and
Christopher L. Jackson (3/3) Michael W. Memory, CIPM2 Karen Chen, CFA (1/20)
product specialists
Research/Trading (17/17)
Senior Product Specialist Senior Product Specialist
Corey J. Kilcourse, CIMA3 (11/11) Jayme M. DiRienzo (4/8)
Product Specialist Product Specialist Associate

Average professional experience: 17 years

1 Chartered Financial Analyst , 2 Certificate in Investment Performance Measurement, 3 Certified Investment Management Analyst
Doug Forsyth and Michael Yee are the portfolio managers of the Allianz Income and Growth. Numbers in parentheses reflect years of tenure at Allianz Global Investors and affiliates/years of
industry experience. 63
Source: Allianz Global Investors; as at December 2016.
Our US Income and Growth Expertise

Stable investment team


1 Doug Forsyth, head of the I&G team, has been
with the firm since1994
4 most senior members have worked together on Proven track record
this team for more than 13 years 4 Consistent long-term track
record of the strategy and
competitive ranking in the
Disciplined investment approach peer group
2 Stable and experienced team employs a
forward-looking approach and follows a
disciplined, fundamental bottom-up research
Risk management
process with focus on issuers exhibiting
improving fundamental characteristics
3 Strategy seeks to identify and minimize credit risk, avoid
defaults and target upgrades, while providing consistent
income, diversification benefits and total return potential

64
US Income and Growth Strategies
Investment Process

1 2 3 4 5
Idea Company Upgrade Alert Relative Value and Monitor and Risk
Generation Summary Sheet Model Trading Management

Financial Statements High Yield Bonds Daily - News /


information flow
Investment Confirmation of our Spread advantage
Management philosophy Position in capital
Team Fundamental of improving structure
Analysis operating statistics Supply and demand Weekly Portfolio review
through detailed Liquidity
analysis Merger and acquisition
External
Basic
Compare objective trends Monthly Performance
Research
Operating Statistics rating to published Default history of attribution
rating industry
Technology
Quarterly Pre-reporting
Issue review of all holdings
Characteristics Operating Statistics
Operating Statistics
Proprietory Reviewed Convertibles
Systematic Objective internal Semi-Annual Research
Structure cross verification
Evaluation Model credit rating Participation potential
Volatility cushioning
Ongoing updates
Upgrade Alert Model

65
7
Selected Funds Highlights

66
Short duration Euro bond fund with broad investment universe

Performance since inception (base value 100) in (%) 1


Performance History (%) 1
Allianz Advanced
YTD 0.11
Fixed Income Short 1 Month 0.26

Duration 2 Months
3 Months
0.11
0.39
Jlichmanns, Ralf 6 Months -0.01
Experience since 1996 1 Year 0.78
Manages the fund Since inception 6.90
since 01/2013 Since inception p.a. 1.62
2015 0.62
The investment policy is geared towards generating 2016 0.84
an above-average long-term return compared to the
Fund Benchmark
European market for short duration bonds

Key features Portfolio characteristics Facts and figures


Attractive risk-adjusted returns
Portfolio duration 0-4 years ISIN LU0856992960 W (EUR)
The portfolio construction is guided by the adherence to Bloomberg-Ticker AAFISDW LX
stringent risk guidelines. This is achieved through a High yield exposure Max. 25 % of NAV Reuters-Ticker ALLIANZGI01
systematic optimization process. Bloomberg Barclays
Emerging Market
Max. 20 % of NAV Benchmark Capital Euro-Aggregate:
Diversification exposure
1-3 Year Unhedged
Alpha sources Max. 10 % of NAV Launch Date 08/01/2013
Increased flexibility and broadened investment universe
in comparison to a conventional fixed-income portfolio Net Assets 1,090.15 million EUR
(corporate, emerging markets and collateralized bonds). Distribution payout on
26.375 EUR
15/12/2016
Advanced Analytics TER (%) 2 0.37

Proprietary research that is structured to offer


simultaneously a broad coverage and deep insights.

Data as at 28/02/2017. 1 Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable
indicator of future results. 2 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last fiscal year (abridged fiscal year).
Fund for convertible bonds focusing on Europe

Performance over 5 years (base value 100) in (%) 1


Performance History (%) 1
Allianz Convertible
YTD 1.11
Bond 1 Month 1.26
2 Months 1.11
3 Months 3.11
Gruet, Tristan 6 Months 2.54
Experience since 1998
1 Year 7.70
Manages the fund Since inception 135.63
since 01/2012 Since inception p.a. 4.61
2015 7.85
The fund's aim is to generate capital growth over the 2016 -0.11
long term. The fund invests primarily in convertible
Fund Benchmark
bonds with emphasis on securities traded in Europe.

Key features Portfolio characteristics Facts and figures


A conviction management
In-depth knowledge of the convertible bond market Target tracking error Medium ISIN LU0706716544 IT (EUR)
Pure management style Generate capital growth Bloomberg-Ticker AGBCVIT LX
A joint contribution from credit and equity analysis teams Target performance
over the long term Reuters-Ticker ALLIANZGI01
A concentrated portfolio with a low turnover Exane Europe
Active country exposure N/A Benchmark
Convertible Bond Index
A consistent and robust performance track-record Active sector exposure N/A
Launch Date 31/01/2012
A 15-year-plus track-record that ranks it as one of the best- Min in Convertibles bonds
established funds in the European convertible bond universe Net Assets 724.58 million EUR
(or exchangeable): 60% of
the net asset value; Accumulation on
8.189 EUR
An attractive asset class Equities: max in Equities = 30/09/2016
An attractive risk/return profile even in a difficult environment Maximum bond exposure 40%; Derivatives: max in TER (%) 2 0.80
Partial participation in equity upside combined with a downside derivative instruments =
cushion 40%; Open-ended funds:
max in open ended funds =
Diversification of bond investments
10%

Data as at 28/02/2017. 1 Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable
indicator of future results. Any front-end loads (for this fund currently 0.00 %) reduce the capital employed and the performance stated. All performance data in respect of Allianz Convertible Bond - IT - EUR prior to the launch date,
31/01/2012, are based on another investment fund, namely ALLIANZ EUROPE CONVERTIBLE, a French benchmark fund, which is not licensed for distribution in Germany. Allianz Convertible Bond is managed by the same team
using the same strategy. This does not imply that Allianz Convertible Bond will enjoy similar performance in the future. The fund unit price may be subject to increased volatility 2 TER (Total Expense Ratio): Total cost (except
transaction costs) charged to the fund during the last fiscal year (abridged fiscal year).
Fixed maturity fund focusing on emerging markets bonds

Performance since inception (base value 100) in (%) 1


Performance History (%) 1
Allianz Emerging
YTD 1.87
Markets Bond Extra 1 Month 1.08

2020 2 Months
3 Months
1.87
2.67
Saichin, Greg 6 Months 1.89
Experience since 1984
1 Year 10.28
Manages the fund Since inception 12.68
since 01/2015 Since inception p.a. 5.88
2015 -
The fund concentrates on bonds of public and private 2016 9.14
issuers from emerging market countries or companies that
generate the predominant share of their revenues in the Fund
emerging markets. The investment objective is to attain a
return in-line with yields of corporate and government
bonds with comparable maturity from the Emerging Portfolio characteristics Facts and figures
Markets.
Emerging market ISIN LU1113941998 A (EUR)
Min. 80 %
exposure Bloomberg-Ticker AEMB20A LX
Key features Non investment grade Max. 40% (at time of Reuters-Ticker ALLIANZGI01
Balanced combination of corporate bonds bonds acquisition) Benchmark No Benchmark
The fund invests both in emerging market investment grade Exclusion of certain kind Launch Date 27/01/2015
No MBS, no ABS
corporate bonds (up to 60%) and in emerging market high of bonds
Net Assets 173.23 million EUR
yield corporate bonds (max. 40%). This combination aims to Max. 10% of the sub-
Distribution payout on
provide above-average yield while maintaining a manageable FX exposure fund's assets from a 4.25 EUR
15/12/2016
level of risk. Euro perspective
TER (%) 2 1.04

Predictability and diversification

The buy and watch strategy of the fund leads to a predictable


risk/return profile, and a fixed annual distribution is provided.
The access to a wide range of fixed income instruments
guarantees diversification.
Data as at 28/02/2017. 1 Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable
indicator of future results. Any front-end loads (for this fund currently 2.00 %) reduce the capital employed and the performance. 2 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last
fiscal year (abridged fiscal year).
Fund for emerging market bonds (largely EUR-hedged)

Performance over 5 years (base value 100) in (%) 1


Performance History (%) 1
Allianz Emerging
YTD 3.38
Markets Bond Fund 1 Month 2.05
2 Months 3.38
3 Months 4.59
Saichin, Greg 6 Months -0.61
Experience since 1984
1 Year 11.78
Manages the fund Since inception 115.60
since 11/2013 Since inception p.a. 6.12
2015 -4.67
The fund invests in hard currency emerging market 2016 10.77
bonds. Its investment objective is to attain above-
Fund Benchmark
average capital growth over the long term.

Key features Portfolio characteristics Facts and figures


Highly diversified market
Portfolio duration 3 to 9 years IE0034110852 I (H2-
ISIN
The fund invests mainly in sovereign and quasi- EUR)
sovereign bonds, but also in corporate bonds, relative Emerging market Bloomberg-Ticker DITEMBD ID
Min. 80%
value and FX exposure Reuters-Ticker ALLIANZGI01
Emerging market JP Morgan EMBI Global
Up to 30%
Optimized investment approach exposure Benchmark Diversified (hedged in
Currency risks Euro)
Combination of vertical top-down risk budgeting with exceeding 20% of fund
FX exposure Launch Date 24/03/2004
horizontal bottom-up security selection within different volume are to be
value added strategies hedged against euros Net Assets 473.87 million EUR
Distribution payout on
5.81 EUR
07/03/2016
TER (%) 2 0.77

Data as at 28/02/2017. 1 Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable
indicator of future results. The fund unit price may be subject to increased volatility 2 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last fiscal year (abridged fiscal year).
Fund for emerging markets bonds with short duration

Performance since inception (base value 100) in (%) 1


Performance History (%) 1
Allianz Emerging
YTD 1.61
Markets Short Duration 1 Month 1.00

Defensive Bond 2 Months


3 Months
1.61
1.85
Saichin, Greg 6 Months 1.22
Experience since 1984
1 Year 9.61
Manages the fund Since inception 4.76
since 04/2014 Since inception p.a. 1.61
2015 -1.93
The fund concentrates on USD denominated bonds of 2016 7.94
public and private issuers from emerging market countries
or companies that generate the predominant share of their Fund
revenues in the emerging markets. The investment
objective is to attain an above-average long-term return
compared to the market for short duration emerging Portfolio characteristics Facts and figures
markets bonds.
Portfolio duration 1 to 4 years LU1033710234 I (H2-
ISIN
EUR)
Key features Yes if minimum rating of Bloomberg-Ticker ALEMIH2 LX
High yield exposure
Highly diversified market B- at time of acquisition Reuters-Ticker ALLIANZGI01
Emerging market Benchmark No Benchmark
The fund invests in hard currency and local currency sovereign Min. 70%
exposure
and quasi-sovereign bonds, in corporate bonds, relative value Launch Date 01/04/2014
as well as FX Max 30% not invested
FX exposure Net Assets 47.71 million EUR
in USD
Optimized investment approach Distribution payout on
41.438 EUR
15/12/2016
Combination of vertical top-down risk budgeting with horizontal TER (%) 2 0.56
bottom-up security selection within different value added
strategies

Extra potential returns in a defensive way

The fund may invest in high-yielding bonds, if they carry a


rating of at least B- at the time of acquisition.

Data as at 28/02/2017. 1 Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable
indicator of future results. 2 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last fiscal year (abridged fiscal year).
Fund for ultra short-term EUR bonds enhanced by fixed-income and FX investments

Performance over 5 years (base value 100) in (%) 1


Performance History (%) 1
Allianz Enhanced
YTD -0.02
Short Term Euro 1 Month 0.01
2 Months -0.02
3 Months 0.05
Dahlhoff, Lars 6 Months 0.01
Experience since 2007
1 Year -0.16
Manages the fund Since inception 15.98
since 12/2012 Since inception p.a. 1.51
2015 0.05
Exceed the return of the money market at a prudent 2016 -0.16
level of risk through active management while
Fund Benchmark
providing daily liquidity.

Key features Portfolio characteristics Facts and figures


Focus on stability and security
BM + 25 bps (net of ISIN LU0293295324 I (EUR)
Diversified investment in prime rated money market Target outperformance
fees) Bloomberg-Ticker AGIEMMI LX
instruments and short-term government bonds with a portfolio
Reuters-Ticker ALLIANZGI01
duration below one year. No exposure to ABS, MBS and Portfolio-Duration Max. 1 year
CDOs. Benchmark EONIA
Launch Date 17/04/2007
Focus on issuer &
Diversification benefits Net Assets 1,287.96 million EUR
maturity selection,
Higher flexibility and broader investment universe via active positions in Fixed Distribution payout on
6.718 EUR
derivatives (focus on G7 markets) as compared to standard Alpha sources Income derivatives, 15/12/2016
long-only EUR money market portfolio. Potential benefit from additional exposure in TER (%) 2 0.24
market opportunities regardless of interest rate environment. Foreign Exchange Additional performance fee
derivatives 0,12
(%) 3
Excellent track record

Attractive risk / return profile regardless of several periods of


market turmoil over the past years.

Data as at 28/02/2017. 1 Calculated at the net asset value, excl. Front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable
indicator of future results. You should not make any assumptions on the future on the basis of performance information in this document. The value of an investment and the income from it can fall as well as rise as a result of market
and currency fluctuations and you may not get back the amount originally invested. Any front-end loads reduce the capital employed and the performance stated. 2 TER (Total Expense Ratio): Total cost (except transaction costs)
charged to the fund during the last fiscal year (abridged fiscal year). 3 Perf.-related Fee:: Distribution verse au 15/12/2016
EUR bond fund with medium duration and expanded investment range

Performance over 5 years (base value 100) in (%) 1


Performance History (%) 1
Allianz Euro Bond
YTD -0.34
1 Month 1.12
2 Months -0.34
3 Months 0.41
Dixmier, Franck 6 Months -2.78
Experience since 1990
1 Year 1.52
Manages the fund Since inception 75.92
since 11/2013 Since inception p.a. 4.16
2015 0.40
Investment objective: generating above-average 2016 3.01
returns over a full market cycle
Fund Benchmark

Key features
Invests primarily in Euro-denominated investment-grade Portfolio characteristics Facts and figures
bonds
High, but not specific ISIN LU0165915991 I (EUR)
Target tracking error
number Bloomberg-Ticker ALEUBIX LX
Total return approach Reuters-Ticker ALLIANZGI01
Diversification : out-of-benchmark strategies: Target performance
vs. Benchmark Bloomberg Barclays
- Foreign government bonds (non-European) Management style Active Benchmark 2 Capital Euro-Aggregate
Bond Index
Duration +/- 2 Jahre
- High Yield Launch Date 23/04/2003
Active sector exposure: Net Assets 676.66 million EUR
Max. 10 %
- Currencies High yield
Max. 20 % Distribution payout on
Emerging markets 0.198 EUR
- Emerging Markets Max. 20 % 15/12/2016
FX exposures
Max. 49 % TER (%) 3 0.72
Cash

Active duration management: +/- 2Y vs. the benchmark


(i.e. Bloomberg Barclays Capital approx. 5,5Y duration).

Data as at 28/02/2017. 1 Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable
indicator of future results. Any front-end loads (for this fund currently 2.00 %) reduce the capital employed and the performance. 2 Benchmark history: until 09/03/2009 Merrill Lynch Euro High Yield Constrained Unhedged EUR 3 TER
(Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last fiscal year (abridged fiscal year).
Fund for investment-grade bonds from the eurozone

Performance over 5 years (base value 100) in (%) 1


Performance History (%) 1
Allianz Euro
YTD 0.50
Investment Grade 1 Month 1.23

Bond Strategy 2 Months


3 Months
0.50
1.10
Talavera-Dausse, Laetitia 6 Months -1.12
Experience since 2001
1 Year 4.99
Manages the fund Since inception 100.91
since 03/2012 Since inception p.a. 4.72
2015 -0.79
The fund aims to achieve its investment objective through 2016 4.48
investments primarily in bonds with an investment grade
rating from a recognized rating agency that are issued in Fund Benchmark
countries participating in the OECD.

Key features Portfolio characteristics Facts and figures


A consistent and robust performance track-record Target tracking error N/A, historically observed ISIN LU0706717278 IT (EUR)
A 10-year-plus track-record that ranks it as one of the best- Bloomberg-Ticker AEIGBIT LX
established funds in the Euro Investment Grade bond universe Target performance N/A
Reuters-Ticker ALLIANZGI01
Active country exposure N/A Bloomberg Barclays
An attractive asset class with broad selection opportunities
across Europe Active sector exposure N/A Capital Euro-Aggregate
Benchmark
The Corporate Credit market offers diversity across countries, Corporate TR Index
Maximum 5% invested in (Unhedged EUR)
sectors, ratings and company profiles presenting sound High Yield bonds
financial structures and steady access to capital markets. (minimum BB- at the time Launch Date 20/03/2012
Names range from Casino, Daimler to BNP Paribas or Allianz of purchase); maximum 10 Net Assets 625.75 million EUR
% invested in non-rated Accumulation on
Integrated and reactive portfolio manager / analysts set-up bonds whose internal 23.093 EUR
Maximum bond exposure 30/09/2016
rating is at least equivalent
Team coverage of investment grade and non-investment TER (%) 2 0.61
to BB-; cash: maximum
grade names : comprehensive view of credit market 10% in money market
Each portfolio manager delivers sector analysis to team : a mutual funds; internal rule:
convincing and reactive process maximum single issuer
exposure: 4%
Data as at 28/02/2017. 1 Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable
indicator of future results. Any front-end loads (for this fund currently 0.00 %) reduce the capital employed and the performance stated. All performance data in respect of Allianz Euro Investment Grade Bond Strategy IT - EUR prior
to the launch date, 20/03/2012, are based on another investment fund, namely ALLIANZ EURO INVESTMENT GRADE, a French benchmark fund, which is not licensed for distribution in Germany. Allianz Euro Investment Grade Bond
Strategy is managed by the same team using the same strategy. This does not imply that Allianz Euro Investment Grade Bond Strategy will enjoy similar performance in the future. 2 TER (Total Expense Ratio): Total cost (except
transaction costs) charged to the fund during the last fiscal year (abridged fiscal year).
Defensive fund for medium duration EUR bonds

Performance over 5 years (base value 100) in (%) 1


Performance History (%) 1
Allianz Euro
YTD -1.45
Rentenfonds 1 Month 1.07
2 Months -1.45
3 Months -0.66
Reinhard, Johannes 6 Months -4.53
Experience since 2000
1 Year -1.04
Manages the fund Since inception 2.469.68
since 12/2013 Since inception p.a. 6.56
2015 1.08
The fund invests primarily in the Euro bond market. 2016 3.11
Securities acquired must have a good credit rating
Fund Benchmark
(investment-grade). Its investment objective is to
attain a return in line with the market.
Portfolio characteristics Facts and figures
Key features
Stability Portfolio duration 3 to 9 years ISIN DE0008475047 A (EUR)
Bloomberg-Ticker DITDRTI GR
High yield exposure No
Stable outperformance over time in investment grade Reuters-Ticker ALLIANZGI01
bonds, achieved through a systematic optimisation of the Emerging market JP Morgan EMU
Up to 10%
risk/return profile. exposure Benchmark Government Bond
Corporate exposure Up to 30% Investment Grade Index
Diversified Launch Date 24/01/1966
Foreign currency risk
The multi-layered investment approach of Advanced FX exposure against the euro limited Net Assets 1,533.17 million EUR
Fixed Income allows for broad diversification across to a max. of 5% Distribution payout on
1.431 EUR
numerous asset classes. 07/03/2016
TER (%) 2 0.80
Advanced Analytics

Proprietary primary research that is structured to offer


simultaneously a broad coverage and deep insights.

Data as at 28/02/2017. 1 Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable
indicator of future results. Any front-end loads (for this fund currently 2.50 %) reduce the capital employed and the performance. 2 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last
fiscal year (abridged fiscal year).
Fund for Asian bonds denominated in local currencies or international reserve currencies

Performance since inception (base value 100) in (%) 1


Performance History (%) 1
Allianz Flexi Asia
YTD 3.30
Bond 1 Month 2.06
2 Months 3.30
3 Months 3.46
Tan, David 6 Months 1.59
Experience since 1996
1 Year 10.21
Manages the fund Since inception 16.16
since 11/2015 Since inception p.a. 3.39
2015 1.18
The strategy aims to benefit from total returns generated 2016 6.61
from Asian currency appreciation and bonds amid solid
economic fundamentals, currency undervaluation, high Fund Benchmark
yields and potential credit upgrades.

Key features Portfolio characteristics Facts and figures


Highly active approach Target portfolio duration ISIN LU0811902674 IT (USD)
The focus is on Asian government and corporate bonds in 0-10 years
range Bloomberg-Ticker ALFABIT LX
hard currencies as well as local currencies which offer Maximum High Yield
70 % Reuters-Ticker ALLIANZGI01
attractive bond yields. New Zealand and Australian bonds are exposure
also included in the investible universe. The aim is to achieve Benchmark No Benchmark
an average rating of investment grade but this is not a hard Maximum cash 50 % Launch Date 03/09/2012
limit. Net Assets 227.77 million EUR
Asian local rates, Asian
Opportunities included Accumulation on
currencies, Asian USD 43.343 USD
The portfolio can include up to 70% in high yield bonds with Alpha sources 30/09/2016
credits, convertibles,
ratings of B- or higher. Convertibles, inflation-linked bonds and
inflation-linked bonds TER (%) 2 0.81
a range of other alpha sources can also be included in the
portfolio.
Potential currency gains on top
The currencies of high growth Asian countries have upside
potential. The strategy participates in the performance of these
currencies. Improvements in country ratings can also have a
positive effect.

Data as at 28/02/2017. 1 Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable
indicator of future results. Any front-end loads (for this fund currently 0.00 %) reduce the capital employed and the performance. 2 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last
fiscal year (abridged fiscal year).
Bond fund focusing on Europe with highly flexible duration policy

Performance over 5 years (base value 100) in (%) 1


Performance History (%) 1
Allianz Flexible
YTD -0.21
Bond Strategy 1 Month -0.34
2 Months -0.21
3 Months -0.41
Vittorangeli, Mauro 6 Months -1.47
Experience since 1989
1 Year 0.41
Manages the fund Since inception 8.51
since 07/2011 Since inception p.a. 1.47
2015 -1.61
The strategy follows an absolute return approach aiming at 2016 -0.97
superior risk-adjusted returns with regard to the European
bond markets. Portfolio duration may be actively managed Fund
between minus 4 and plus 8 years.

Key features Portfolio characteristics Facts and figures


Dynamic investment approach ISIN LU0639173383 IT (EUR)
Target outperformance No formal target
Bloomberg-Ticker AFBSIEU LX
Active and flexible management taking into account constant
evolution of market scenario and seeking the best bond Reuters-Ticker ALLIANZGI01
market opportunities. Target number of bonds 50-90 % Benchmark No Benchmark
Launch Date 29/07/2011
Highly diversified portfolio Duration, curve, credit,
Alpha sources country and sector Net Assets 817.94 million EUR
The strategy invests in fixed income markets through a wide allocation Accumulation on
19.313 EUR
range of strategies benefiting from multiple sources of return 30/09/2016
which are conveniently diversified. Specific attention is given TER (%) 2 0.74
to investment liquidity.

Search for performance in every market conditions, with


rigorous risk management

The strategy focuses on capital appreciation in every market


condition through adequate combination of different
investment strategies and careful risk management.

Data as at 28/02/2017. 1 Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable
indicator of future results. Any front-end loads (for this fund currently 0.00 %) reduce the capital employed and the performance. 2 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last
fiscal year (abridged fiscal year).
Euro bond fund with medium duration

Performance over 5 years (base value 100) in (%) 1


Performance History (%) 1
Allianz
YTD -0.85
Rentenfonds 1 Month 0.88
2 Months -0.85
3 Months -0.46
Antonielli, Roberto 6 Months -3.70
Experience since 1998
1 Year -0.89
Manages the fund Since inception 744.60
since 12/2013 Since inception p.a. 6.31
2015 -0.39
The fund invests primarily in the euro bond market. 2016 2.00
Bonds acquired must be of investment grade rating.
Fund Benchmark
The investment aim is to achieve a return in line with
the broad European bond market.
Portfolio characteristics Facts and figures
Key features
Stable Portfolio duration 4 to 8 years ISIN DE0008471400 A (EUR)
Bloomberg-Ticker ALLRENT GR
IG corporate bonds Max. 30%
The fund invests only in investment grade bonds, which Reuters-Ticker ALLIANZGI01
provides strong stability to the portfolio. High yield exposure 0 Bloomberg Barclays
Emerging market Benchmark Capital Euro-Aggregate
Increased Return Potential Max. 10 % of NAV Bond Index
exposure
Thanks to the addition of corporate and emerging- Max. 10% Launch Date 16/04/1982
FX exposure
market bonds as well as securitized bonds. Net Assets 1,518.41 million EUR
Distribution payout on
1.088 EUR
06/02/2017
TER (%) 2 1.01

Data as at 28/02/2017. 1 Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable
indicator of future results. Any front-end loads (for this fund currently 2.50 %) reduce the capital employed and the performance. 2 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last
fiscal year (abridged fiscal year).
Fund for high-yield corporate bonds from the U.S.

Performance over 5 years (base value 100) in (%) 1


Performance History (%) 1
Allianz US High
YTD 2.13
Yield 1 Month 0.94
2 Months 2.13
3 Months 3.88
Forsyth, Doug 6 Months 4.97
Experience since 1992
1 Year 22.11
Manages the fund Since inception 46.00
since 08/2010 Since inception p.a. 5.92
2015 -8.10
Investment in companies poised to benefit from 2016 14.54
positive fundamental change.
Fund Benchmark

Key features
Disciplined, fundamental bottom-up research process
Portfolio characteristics Facts and figures
The process facilitates the early identification of High Yield
Target tracking error 2-4 % ISIN LU0516398475 IT (USD)
issuers demonstrating their ability to improve their fundamental
characteristics. The companies/issues selected for the 2 % over full market Bloomberg-Ticker AUSHYIT LX
Target outperformance
portfolio exceed minimum credit statistics and exhibit the cycle Reuters-Ticker ALLIANZGI01
highest visibility of future expected operating performance. Target number of Merrill Lynch US High
100-140
Maximization of information flow securities Benchmark Yield Master II Index
Allocation is the result of USD
Strategy is predicted on maximizing information flow to identify
Active industry the bottom-up process; Launch Date 02/08/2010
and minimize credit risk, avoid defaults and target upgrades.
exposure monitor industry / sector Net Assets 4,333.01 million EUR
Attractive investment weights relative to index
Accumulation on
The portfolio is designed to provide income, Active stock exposure 95-100 % 84.743 USD
30/09/2016
diversification benefits and total return potential. Alpha sources Security selection TER (%) 2 0.74
Stable team and strong leadership since inception
Senior members working together for more than 12 years.

Data as at 28/02/2017. 1 Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable
indicator of future results. Any front-end loads (for this fund currently 0.00 %) reduce the capital employed and the performance. The fund unit price may be subject to increased volatility 2 TER (Total Expense Ratio): Total cost (except
transaction costs) charged to the fund during the last fiscal year (abridged fiscal year).
8
Target Maturity Funds

80
Target Maturity Funds
An Attractive Combination of Predictability and Diversification

Target maturity bond funds should provide a fixed and predictable


maturity date for the investor and the distribution channel
Attractive return profile
All funds offer an attractive yield above money market
+ Distributing share class
Buy-and-watch bond portfolio leads to a predictable risk/return profile,
since bonds expire around fund maturity + Easy and understandable fund concept
A fixed annual target distribution can further provide the look and feel of a + Bond selection and default risk management are
conventional bond, while exploiting diversification advantage and access key for the success
to a wide range of fixed income instruments
+ Aims to achieve a target yield1
Crucial is the selection of portfolio constituents and ongoing risk
monitoring
AllianzGIs Target Maturity Bond Funds

The funds aim to provide an highly attractive risk-return profile within the framework of a target maturity concept

1 The target yield can not be guaranteed and is influenced by several factors . Especially factors such as currency developments, FX hedging costs or returns, interest rate levels over the
term of the fund and at fund maturity, reinvestment opportunities of matured or called securities or coupon earnings, cap stock activity of the fund, securities defaults, changes in credit
spreads (yield premiums compared with top-rated debtors), etc., can influence the redemption amount on the maturity date and/or the return of the fund. 81
Striking Arguments for the Target Maturity Funds of Allianz Global
Investors:

Coordinated concepts have been useful during the distribution process

01 02 03 04
Careful security Clearly defined Annual Reliability
selection offers maturity date distribution thanks to
chance of more The target maturity All target maturity funds professional risk
attractive funds will mature in the will make their management
4th quarter distributions in July
returns

Proven track record for target maturity funds since 2008

82
The Target Maturity Funds of Allianz Global Investors

The basic concept

Advantages of a large
Advantages of a bond + universe + Advantages of a fund

Clear profile Pfandbriefe Expertise in bond selection

Fixed maturity Corporate bonds Broad diversification across


issuers, sectors and countries
Fixed distribution Emerging markets bonds
Access to bonds with high
High-yield bonds denominations

The target maturity funds of Allianz Global Investors:


= an optimal combination

Quelle: Allianz Global Investors Europe GmbH 83


Example:
Simplified investment process for Allianz Rendite Plus 20171

Allianz
Rendite Plus 2017

Fundamental Convincing bond Strict risk management


analysis selection

1 TER (Total Expense Ratio): total expenses (excluding transaction costs) charged to the fund during the past financial year. 0.81%; as of 30/06/2016. A performance of the strategy is not
guaranteed and losses remain possible. Please note the additional information about the fund on www. allianzglobalinvestors.com 84
A Broad Range of Target Maturity Funds which Offer Solutions for
Every Need

The current range makes sure that a suitable solution is always available depending on preferences, the
focus may be on traditional or thematic aspects

Traditional target maturity funds

Allianz Allianz Allianz Rendite Allianz Rendite


Laufzeitfonds Laufzeitfonds Plus 2017 Plus 2019
Extra 2017 Extra 2019

Thematic target maturity funds

Allianz Allianz Allianz High


Emerging Emerging Yield Bond
Markets Bond Markets Bond Extra 2017
Extra 2018 Extra 2020

A performance of the strategy is not guaranteed and losses remain possible. 85


Performance of the Target Maturity Funds Over Time

Investors benefit from excellent expertise

Distributions
Minimum Redemption price on Performance1
2013, 2014 , 2015, 2016, Performance1 since
Fund name distribution, in 30/09/2016, since launch, p.a.,
in EUR in EUR in Eur in Eur launch, in %
EUR in EUR in %

Allianz Laufzeitfonds Extra 2017 2.50 New 2.50 2.50 2.50 103.29 10.89 2.70

3.25
Allianz High Yield Bond Extra 2017 3.70 New (abridged 3.70 1.72 94.70 5.40 1.46
FY)

0.96
Allianz Rendite Plus 2017
2.20 New (abridged 2.20 2.20 97.80 4.28 1.32
(launch 22.10.2013)
FY)

Allianz Emerging Markets Bond Extra New in


3.50 1.68 3.50 3.50 94.10 5.17 1.86
2018 2014

Allianz Rendite Plus 2019 (launch New in


2.00 - 2.00 2.00 99.98 5.07 1.94
05.06.2014) 2014

Current
Allianz Laufzeitfonds Extra 2019 New in
indication: 0 2.20 2.20 98.51 4.03 1.76
(launch 23.09.2014) 2014
2.20

Allianz Emerging Markets Bond Extra New in


2.86 4.25 101.15 10.61 5.38
2020 (launch 27.01.2015) 2015

1An annual fee for custodian services may weigh on the performance. Past performance is no reliable indicator of future results. The value of the fund units may be subject to highly elevated
volatility. As of 31/12/2016 2 The distributions are no indication of the actual returns of the fund. Source: Allianz Global Investors. 86
Deinvestment fee

What is a deinvestment fee?


When an investor redeems a funds units before maturity, the redemption price decreases by 2 %. This amount is
credited in full to the fund (= the remaining investors).

Why does Allianz Global Investors charge a deinvestment fee?


The fee protects investors who choose to hold the fixed-term fund until its planned maturity date. When investors
return their units before the maturity date (early redemption), the issuer has to sell additional bonds to generate
liquidity. This can lead to adverse effects on returns for the remaining investors depending on the market environment.
Charging a deinvestment fee for unit redemption that is then credited to the funds assets, thereby benefiting the
remaining investors, is one way to hedge the risk of such effects.

87
Spotlight:
Callable Bonds (1/2)

Although callable bonds have a fixed term, they can be redeemed by the issuer before the maturity date.
Redemption is attractive for the issuer when market interest rates drop and/or when its credit rating improves. In
this situation, the issuer can obtain refinancing at a lower cost by paying off the bond and issuing another bond at a
lower interest rate.

Higher interest to compensate for uncertainty


The actual returns on callable bonds depend on whether or not they are redeemed before the maturity date.
Callable bonds usually offer higher coupons to compensate for this risk. In order to take redemption prior to
the maturity date into account, we provide the yield to worst1 rate when stating the funds returns.

1 Notes: Returns paid at maturity are referred to as yield to maturity. Returns paid upon the earliest possible call date are referred to as yield to call. The lower of the two is the yield to
worst. 88
Spotlight:
Callable Bonds (2/2)
Example

Purchase of EUR 100 bonds at a


Market price of bond at
market value of EUR 102
time of purchase EUR 102
Interest (2 x 6% p.a.) + EUR 12
Return at maturity
(yield to maturity) Redemption of bond at
agreed price + EUR 100
Return EUR 10
~5%

Market price of bond at


time of purchase EUR 102 Example:
Callable bond with remaining
Return at earliest possible Interest (1 x 6% p.a.) + EUR 6
term of 2 years
call date Redemption of bond at Coupon: 6% p.a.
(yield to call) agreed price +EUR 100 Current price: EUR 102
Return EUR 4 Redemption price: EUR 100
~~3,9
4 %% Earliest possible call date:
1 year at EUR 100
Start 1 year 2 years

The lower of the two returns is referred to as the yield to worst.

89
9
Swing Pricing

90
Swing Pricing

Swing pricing means that the fund unit price is adjusted for large net subscriptions or redemptions.
Thanks to this procedure, transaction costs are only borne by those who cause them.
Swing pricing protects the other investors from capital dilution.

Cost distribution according to


How is dilution caused?
the liability principle:

Due to subscriptions or redemptions of fund shares, Swing pricing:


the fund manager may have to buy or sell securities
for the portfolio. In case of large-scale subscriptions or redemptions,
an adaptation of the fund unit price can be
The related transaction costs are charged to the implemented to charge the transaction costs to those
funds assets. They reduce the funds net asset value investors who caused them on that day.
(NAV).
Remaining investors are not affected by this
The transaction costs are borne by all investors in the adaptation.
fund.

Swing pricing will be applied to 3 fixed income strategies:

Emerging European
Euro High
Markets Convertible
Yield
Debt Bonds
91
Implementation of Swing Pricing within Allianz Global Investors

When will the swing pricing be implemented ? Cap Stock Activity


When the net volume of subscriptions and redemptions reaches
an amount that could significantly affect existing investors. The
Threshold
adaptation allows to counter large speculators that aim to benefit
from the fact that fund prices do not have bid-ask spreads, and
protect long term investors from a potential dilution of their Net Subscriptions > X% Net Redemptions > X%
wealth.

Swing Pricing
A simple and transparent method :
The swing pricing factor
The NAV of the fund is adapted according to the volume and Add Swing Pricing Substract Swing
type of transactions on a given day. Transaction costs are Factor Pricing Factor
charged only to investors who subscribed or redeemed capital on
that day. The adaptation (swing pricing factor) is based on NAV
normal transaction costs for the underlying securities. (Always only one NAV)

92
Swing Pricing Threshold Mechanism in Practice

Example : Scenarios in case of a EUR 100 m fund volume

Normal Market Distressed Market


(Threshold = 3% of fund volume) (Threshold = 1,5% of fund volume)

Subscriptions of EUR 5 m
1 Redemptions of EUR 5.5 m No swing pricing applied No swing pricing applied
= Net redemptions of EUR 0.5 m
< 1.5% net fund volume

Subscriptions of EUR 15 m
Redemptions of EUR 13 m
2 No swing pricing applied Swing pricing applied
= Net subscriptions of EUR 2 m
> 1.5% net fund volume and < 3% net fund volume

Subscriptions of EUR 20 m
3 Redemptions of EUR 10 m
Swing pricing applied Swing pricing applied
= Net subscriptions of EUR 10 m
> 3% net fund volume

93
Advantages for Clients

Protection against dilution Transparency


Without swing pricing, large-scale Transaction costs are borne only by
redemptions or subscriptions of fund those who have caused them.
units result in transaction costs Medium to long-term investors who
which must be borne by the retain their investments in the fund
remaining investors are not affected

Liability Principle Protection against Speculation


Swing pricing adaptation will only affect short-term investors and players
investors who buy or sell units on a who speculate on price volatility
given day.

94
Disclaimer

Investing involves risk. The value of an investment and the income from it may fall as well as rise and investors might not get back the full amount invested.
Investing in fixed income instruments 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 of these instruments are generally expected
to rise. Liquidity risk may possibly delay or prevent account withdrawals or redemptions
The volatility of fund unit prices may be increased or even strongly increased. Past performance is not a reliable indicator of future results. If the currency in
which the past performance is displayed differs from the currency of the country in which the investor resides, then the investor should be aware that due to
the exchange rate fluctuations the performance shown may be higher or lower if converted into the investors local currency. This is for information only and
not to be construed as a solicitation or an invitation to make an offer, to conclude a contract, or to buy or sell any securities. The products or securities
described herein may not be available for sale in all jurisdictions or to certain categories of investors. This is for distribution only as permitted by applicable
law and in particular not available to residents and/or nationals of the USA. The investment opportunities described herein do not take into account the
specific investment objectives, financial situation, knowledge, experience or specific needs of any particular person and are not guaranteed. The views and
opinions expressed herein, which are subject to change without notice, are those of the issuer companies at the time of publication. The data used is
derived from various sources, and assumed to be correct and reliable, but it has not been independently verified; its accuracy or completeness is not
guaranteed and no liability is assumed for any direct or consequential losses arising from its use, unless caused by gross negligence or wilful misconduct.
The conditions of any underlying offer or contract that may have been, or will be, made or concluded, shall prevail. For a free copy of the sales prospectus,
incorporation documents, daily fund prices, key investor information, latest annual and semi-annual financial reports, contact the management company at
the address indicated below or www.allianzgi-regulatory.eu. Please read these documents, which are solely binding, carefully before investing. This is a
marketing communication issued by Allianz Global Investors GmbH, www.allianzgi.com, an investment company with limited liability, incorporated in
Germany, with its registered office at Bockenheimer Landstrasse 42-44, 60323 Frankfurt/M, registered with the local court Frankfurt/M under HRB 9340,
authorised by Bundesanstalt fr Finanzdienstleistungsaufsicht (www.bafin.de). The duplication, publication, or transmission of the contents, irrespective of
the form, is not permitted.

Source: Allianz Global Investors; as of February 2017. 95

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