- The Fund aims at a steady level of income from a global universe of investment grade interest bearing securities and secondarily a total return in excess of a cash benchmark through a market cycle.
- The Fund is exposed to significant risks which include investment/general market, sovereign debt, creditworthiness/credit rating/downgrading, counterparty, interest rate changes, valuation, volatility and liquidity, emerging market and currency.
- The Fund may invest in asset-backed securities (“ABS”) and mortgage-backed securities (“MBS”) which may be highly illiquid and prone to substantial price volatility. These instruments may therefore be subject to greater credit, liquidity and interest-rate risks compared to other debt securities.
- The Fund may invest in financial derivative instruments (“FDI”) which may expose to higher leverage, counterparty, liquidity, valuation, volatility, market and over the counter transaction risks. The Fund’s net derivative exposure may be up to 50% of the Fund’s net asset value.
- This investment may involve risks that could result in loss of part or entire amount of investors’ investment.
- In making investment decisions, investors should not rely solely on this material.
Note: Dividend payments may, at the sole discretion of the Investment Manager, be made out of the Fund’s income and/or capital which in the latter case represents a return or withdrawal of part of the amount investors originally invested and/or capital gains attributable to the original investment. This may result in an immediate decrease in the NAV per distribution unit and the capital of the Fund available for investment in the future and capital growth may be reduced, in particular for hedged share classes for which the distribution amount and NAV of any hedged share classes (HSC) may be adversely affected by differences in the interests rates of the reference currency of the HSC and the base currency of the Fund.
Market Insights
- We see stagflation risks in the US, as inflation is accelerating again while growth remains subdued. Holding cash is no longer an attractive option, as the Federal Reserve has already entered an interest-rate cutting cycle, with the federal funds target range expected to fall to around 3.5% by 2026.
- Investing in a diversified basket of bonds offers the potential to generate excess returns over cash. The key lies in identifying bonds with high-quality income streams, such as US inflation-indexed bonds (TIPS), eurozone bonds where inflation is lower and rate cuts are also underway, and emerging-market bonds that stand to benefit from a weaker US dollar.
Source: FEDFUND I Federal Funds Rate Target Overview I MarketWatch
- As central banks pivot, yields on traditional fixed-rate bonds are likely to stay volatile.
- Investors can mitigate the interest-rate risk embedded in conventional fixed-income strategies by focusing on short-duration bonds with lower sensitivity to rate movements, thereby supporting a more stable income stream for portfolios.
- Maintaining a disciplined and selective focus on credit quality is essential to managing volatility.
Source: Allianz Global Investors, Bloomberg, data at of 31/07/2025. Updated on a quarterly basis. The information above is provided for illustrative purposes only, it should not be considered a recommendation to purchase or sell any particular security or strategy or an investment advice. Past performance, or any prediction, projection or forecast, is not indicative of future performance.
- Global fixed-income credit markets exhibit significant valuation inefficiencies, which can be exploited to investors’ advantage through a dedicated bottom-up security selection process.
- These inefficiencies arise because large portions of the fixed-income investor base — including central banks, insurance companies, and passive managers — are not focused on maximizing total return. In addition, the post-2008 financial crisis regulatory environment has diminished the role of financial institutions as market makers.
- As a result, active security selection and sector rotation could help deliver a more consistent potential for excess returns.
Source: Allianz Global Investors, 2025. A performance of the strategy is not guaranteed and losses remain possible. 1Expected Excess Return over SOFR throughout a full market cycle.
Fund Features
- Traditional savings accounts, term deposits, and money market funds are highly sensitive to interest-rate fluctuations, while bank deposits may also be subject to redemption constraints. By contrast, the Allianz Yield Plus Fund (the “Fund”) seeks to achieve a total return higher than cash benchmark over the market cycle, targeting monthly distributions (Yields are not guaranteed, dividend may be paid out from capital)Note.
- Thanks to its multi-sector flexibility, the Fund’s yield-to-maturity* compares favourably with traditional fixed-income alternatives, while maintaining a shorter duration profile.
* The model performance is hypothetical and provided for illustrative purposes only and are not indicated of actual return likely to be achieved. Model performance results have certain inherent limitations. The result do not reflect the results of investing in actual accounts or the material economic and market factors that could impact an investment manager's decision-making process.
Source: AllianzGI, Bloomberg as of 25/09/2025. Indices used: ICE BofA Fixed Rate Preferred Securities Index (P0P1), ICE BofA US 1-Year Treasury Bill Index (G0O3), ICE BofA Current 3-Year US Treasury Index (GA03), ICE BofA Current 5-Year US Treasury Index (GA05), ICE BofA 1-5 Year US Corporate Index (CVA0), ICE BofA US Corporate Index (C0A0). Past performance does not predict future returns. Securities mentioned in this document are for illustrative purposes only and do not constitute a recommendation or solicitation to buy or sell any particular security. These securities will not necessarily be comprised in the portfolio by the time this document is disclosed or at any other subsequent date.
Source: AllianzGI, Bloomberg as of 25/09/2025. Indices used: ICE BofA Fixed Rate Preferred Securities Index (P0P1), ICE BofA US 1-Year Treasury Bill Index (G0O3), ICE BofA Current 3-Year US Treasury Index (GA03), ICE BofA Current 5-Year US Treasury Index (GA05), ICE BofA 1-5 Year US Corporate Index (CVA0), ICE BofA US Corporate Index (C0A0). Past performance does not predict future returns. Securities mentioned in this document are for illustrative purposes only and do not constitute a recommendation or solicitation to buy or sell any particular security. These securities will not necessarily be comprised in the portfolio by the time this document is disclosed or at any other subsequent date.
- Globally diversified, the Fund captures a broad range of opportunities across the U.S., the UK, the eurozone, Canada, Australia, and Asia.
- The portfolio focuses on high-quality investment-grade bonds, while retaining the flexibility to allocate up to 30% to ABS and MBS, and to gain selective exposure to contingent convertible bonds and emerging markets for more diversified income opportunities.
- Through an active and flexible investment approach, the Fund seeks to manage risks effectively and navigate the full market cycle.
- The Fund exhibits lower sensitivity to changes in interest rates compared with traditional long-duration bond strategies. This offers an appealing proposition across interest-rate cycles.
- Managed by an experienced global investment-grade credit team and supported by a strong global credit research platform, the Fund seeks to generate stable alpha potential through active security selection and sector rotation.