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Allianz US High Yield - AM - HKD

ISIN: LU0648978533


Investment Objective:

The fund concentrates on high-yielding corporate bonds of companies that are domiciled in the U.S.A. Up to 20% of the fund's assets may be invested in securities that are denominated in currencies other than the US-dollar. The investment objective is long-term capital appreciation.


Fund manager:

Forsyth, Doug


Portfolio Highlights:

A pharmaceutical company and a plastics/polymers manufacturer were among the issues purchased during the month. Sells included issues that were called/tendered or replaced with opportunities offering better relative value.


Outlook:

Low rates, modest growth and strong credit fundamentals are just three of the factors that contribute to a positive outlook for the high-yield bond market. The default forecast should remain low for 2015. Credit statistics support investment in the asset class. Balance sheets are solid. Leverage ratios and interest coverage ratios are near, or better than, levels seen in the past 25 years. Corporate cash levels remain high, and acquisition activity is increasing. Lower-coupon new issues have produced an incentive for acquisition pricing and more issuers are taking advantage of that condition. Lower coupons also contribute to a lower semi-annual interest expense burden. The economic outlook remains constructive for the US, with many economic statistics continuing to support the view of positive growth. Recently, lower energy prices have become an integral part of the US economic forecast. The drop in energy prices has provided a significant boost to US consumers, who make up the majority of US gross domestic product. As a result, higher consumer spending should be a significant tailwind for the economy. Arguably, the cut in energy prices will be more impactful than prior efforts by the Fed, such as quantitative easing, because it acts as an immediate and direct tax cut for the consumer. The outlook for the Fed and interest rates in the US remains data-dependent. The stronger US economy has been offset by continued weakness in several core areas of the global economy. With an eye on the Fed's dual mandate, there has been little fear of any near-term increase in inflation. This has allowed the Fed to remain patient. It can be expected that the Fed's pursuit of its dual mandate, combined with softer global economies, will keep the Fed guessing as to the right time to shift to a policy that is more neutral rather than overtly accommodative. Longer-dated Treasury rates are unlikely to move sharply higher until these matters are more clear. Investor conviction about high-yield defaults remaining low should actually be bolstered if the economy is strong enough for Fed tightening. All in all, among fixed-income alternatives, high-yield bonds should continue to be a contributor from both a diversification and a relative-performance perspective.


Overview

Fund price as of 5/29/15

Issue price: 9.54

Redemption price: 9.26

Type of fund: bond fund

Risk and Reward Indicator*: 4

Currency: HKD

Redemption price (previous day): 9.26

Deviation in %: 0.00

Interim profit: -

Equity gains EStG-investors in %: -

Equity gains KStG-investors in %: -

Annual high (3/3/15): 9.39

Annual low (1/21/15): 9.20


* For each fund a risk and reward indicator will be disclosed which will be calculated on the basis of the fund's volatility. The volatility describes how much the value of the fund went up and down in the past. Funds of categories 1 to 7 of the risk and reward profile have shown in the past a very low (category 1) up to a very high (category 7) volatility. The units of a fund of category 1 to 7 of the risk and reward profile might be subject to very low up to very high price fluctuations based on the historical volatilities observed.


Ratings

Morningstar-Rating: ** (2)

Feri-Rating: -


Performance data in %

Date: 4/30/15

1 year: -0.53

3 years: 15.09

3 years annualised: 4.80

5 years: -

5 years annualised: -

10 years: -

10 years annualised: -

Since inception: 23.92

Since inception annualised: 5.96


Volatility in %

Date: 4/30/15

3 years: 4.21

5 years: -


Basis of calculation for performance: Unit value (not including front-end loads); Distributions reinvested. Average annual performance is calculated by distributing the total performance of a period, taking into account the compound interest effect, evenly across each respective year.

Past performance is not a guide to future returns.

Source: IDS GmbH


Opportunities:


+ Particular yield potential of high-yielding corporate bonds
+ Capital gains opportunities on declining market yields
+ Currency gains against investor currency possible in unhedged unit classes
+ Broad diversification across individual securities
+ Possible extra returns through single security analysis and active management


Risks:


+ High-yielding corporate bonds entail above-average risk of volatility and capital loss. The fund unit price may be subject to sharply increased volatility.
+ Bonds suffer price declines on rising interest rates
+ Currency losses against investor currency possible in unhedged unit classes
+ Limited participation in the potential of individual securities
+ No guarantee that single security analysis and active management will be successful