- The Fund is exposed to significant risks which include investment/general market, investing in other underlying collective investment schemes and exchange traded funds, asset allocation, sovereign debt, creditworthiness/credit rating/downgrading, counterparty, interest rate changes, valuation, volatility and liquidity, and currency
- 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.
Market Insights
- Major central banks are nearing the end of the interest rate hike cycle, yet three structural factors — Deglobalisation, Demographics, and Decarbonisation — suggest that global price inflation may persist above central bank targets.
- The markets may underestimate central banks' determination to keep key rates at higher levels. For instance, the Eurozone is facing the risk of wage increases, which may ultimately drive core inflation up.
- As we enter the second half of the year, there is still room for economic data to slow down before giving central banks cause for broad-based rate cuts. Following the sharp repricing in rate cut expectations, the outlook for sovereign bond returns now looks more skewed to the upside.
- High quality corporate debt continues to provide a source of extra income in a context of generally strong corporate earnings, moderate default rate forecast and anticipated monetary policy easing.
- Uncertainties surrounding future growth, monetary policies and geopolitical developments present challenges for investors, yet also open up opportunities.
- As individual companies, sectors and economies embark on increasingly divergent growth paths, bond prices will likely develop in different directions depending on the securities’ ratings. Therefore, diversification, flexibility and active investing will become ever more important.
Fund Features
- With interest rates expected to remain at higher levels in the long term, bond yields have also risen to multi-year highs. As the US Federal Reserve is poised to embark on a rate-cutting cycle, bonds have greater potential for appreciation.
- The fund invests directly or indirectly in global interest-bearing securities and can flexibly allocate up to 5% of its NAV to global equities.
- The fund is not bound by geographical limitations and can broadly invest across the markets of the United States, Europe and Asia, capturing a diverse range of income opportunities.
Source: IDS, 31 December 2023.
- Adopting a diversified investment strategy, we invest in a range of fixed-income securities across various regions and bond types. This may include U.S. government bonds, Hong Kong government bonds, and bonds issued by listed or private companies. The portfolio maintains an average credit quality rating of AA^, which helps manage risk in navigating uncertain investment environments. Such a diversified fixed income portfolio creates potential income opportunities for investors.
- The fund may also invest in global equities (up to 5% of its NAV).
Source: Allianz Global Investors. During any given stage of the investment process, the selection criteria may vary from those shown above. The diagrams and statements above reflect the typical investment process applied to this strategy. At any given time, other criteria may affect the investment process. 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 individual risk profile especially during periods of downturn in the market.
- While the fund performance may be influenced by market fluctuations, its sensitivity to interest rate environment is relatively lower compared to typical long-duration bond funds, making it an alternative investment option.
- With robust experience in multi-asset management, we aim to control portfolio volatility at lower levels through active asset allocation and rigorous risk management.
¹Team data as at 1 January 2024. Multi Asset AUM include Overlay and Advisory SFDR: (EU) Sustainable Financial Disclosure Regulation. Information accurate at time of publishing.
#Mox Bank Limited have teamed up with Allianz Global Investors Asia Pacific Limited (AllianzGI) to offer customers access to this fund. Mox Bank Limited is not affiliated with Allianz Global Investors Asia Pacific Limited.