What's more important than finding balance and stability in today's world?

In an environment of diminishing yields and rising risks, Allianz Global Investors (AllianzGI) delivers investment solutions that aim to combat the trend to hunt for better income strategies at measured risks.

Reasons to seek income opportunities

Hunting for Income – 6 rules

The current economic expansion is at its tail end, while interest rates remain low and market volatilities have shot up due to uncertainties. Is there a way to enjoy the best of both worlds, meaning to capture relatively high potential return without having to take too much risk? Our 6 rules on income investing can accompany your hunt for income journey under the changing market conditions.

Include different asset classes in your portfolio helps increase the chances of earning potential income in a low interest rate environment.

Related strategy:
> Income and Growth

Adding non-traditional investment tools helps increase variations within a portfolio and balance its risks and returns.

Related strategy:
> US Short Duration High Income Bond

Shrug off the straitjacket of benchmarks in a low-yield era and uncover yielding opportunities with a proactive approach.

Related strategy:
> Global Opportunistic Bond

Stick to a rigorous regime for selecting high-quality bonds so as to lower credit risks.

Related strategies:
> US Short Duration High Income Bond
> Global Opportunistic Bond

In the face of interest rate risks, look for short-duration assets to help balance risks.

Related strategy:
> US Short Duration High Income Bond

A multi-asset strategy enables assets with different risk profiles to complement one another, which is key to achieving the ideal of low-risk and high-return objectives.

Related strategy:
> Income and Growth

Professional teams, professional strategies

AllianzGI’s income and growth investment team members are all experts in different areas, for example, Income and Growth, High Yield, Convertible and Short Duration High Income. Working together for many years, they have developed a strong bond and understanding of one another. They also achieve work-life balance. Sharing the same goals, values and beliefs, they make the best team!

AllianzGI’s income and growth investment team is led by five core members (from left): David Oberto (high-yield bond expert), Michael Yee (stock and option expert), Doug Forsyth (CIO US Income and Growth Strategies), Justin Kass (convertible bond expert), William Stickney (high-yield bond expert).

Established 24 years ago, the close-knit team has developed strong understanding and solidarity between members. The lack of changes in the constitution of the team over the years has helped maintain the stability of its investment policies and decisions, an advantage among its peers.

With expertise across all major asset classes, the team can systematically integrate the investment processes of high-yield bonds, convertible bonds, and stocks into a cohesive, effective strategy. Thanks to active information sharing and good tacit understanding, the team can fully deploy the expertise of different members when it comes to decision making. That helps boost the performance of the portfolio, which can be both aggressive and defensive.

The financial services industry is fast-pace. AllianzGI’s income and growth investment team is based in San Diego, meaning that they can also accommodate New York’s trading hours. The flexible work hours enable all team members to spend time with their friends and their families.

Aside from work, the income and growth team members also exercise together in their spare time. They share common topics. They all love hockey and often practise together. They have participated in competitions as a team and won numerous awards.

Members of the income and growth investment team get along extremely well both at work and in spare time. The strong bond and mutual understanding they have developed have given them strength to handle the ever-changing financial market. Each member plays a different yet complementary role.

The investment team has grown over the years to become one with vision, discipline, and strategy. With tremendous experience, they are mentally trained to handle market vagaries and challenges.

AllianzGI’s income and growth team not only emphasises teamwork, but also individual expertise. Their division of labour is clear and meticulous, which helps prepare them for abrupt changes in the market.

The team not only focuses on their asset management performance, but also has to respond to different demands from investors. They have gradually moved from focusing on a single asset class to a multiple-asset income growth strategy. With team spirit, they are ready to move with the times and step into the future!

Potential Income Investment Academy

Within the range of various structures, preferred securities offer different coupon structures which can be leveraged to manage different interest rate environments.

Where preferred securities sit in the issuer’s capital structure, their history of low defaults and the dominance of the banking sector across the preferred universe could be a considerable investment opportunity that preferred securities may provide higher quality income potential.
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An unconstrained global strategy has the ability to rotate risk between these themes to target a potential positive outcome regardless of the market environment.

Traditional benchmarks suffer from inherent deficiencies such as market-cap weighting construction and an over-reliance on credit ratings. A flexible approach can take advantage of these inefficiencies and avoid being a forced seller or buyer of securities at inopportune times.
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The US short duration high yield market is well-positioned to benefit from the structure of the Federal Reserve Board (Fed) corporate bond purchase programmes.

Against the backdrop of low coupons and long duration risks in traditional, core bonds, US short duration high yield may offer a potentially better risk/return alternative.
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Diversifying exposure across high yield bonds, convertibles and equities has historically achieved fair performance and managed downside risks.

In uncertain times, a broader toolkit of income-producing securities could help striving potential income and meeting long term objectives.
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Allianz Global Investors helps your portfolio stand tall and adapt to the winds of change.

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