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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 specialty printing/data logistics company, a steel manufacturer and a communications issuer were purchased. Sales included calls, tenders and those sold for fundamental reasons.


Outlook:

Volatility has returned, and the factors driving that volatility are numerous. However, low rates, modest growth and strong credit fundamentals are just three of the factors that contribute to a prolonged positive outlook for the high-yield bond market. Investors in our view would be wise to take advantage of lower prices when they present themselves. Fundamentals have not changed materially from the previous quarter, which is positive. 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 ongoing. Lower-coupon new issues have produced a lower semi-annual interest expense burden. This stage of the market cycle from a statistical perspective is best compared to the mid-1990s and mid-2000s -market environments that exhibited economic stability, low defaults and ample liquidity. The high-yield market has priced in a default-rate forecast that is higher than the current rate. Among fixed-income alternatives, high-yield bonds should continue to be a contributor from both a diversification and a relative-performance perspective. Nearly all strategists agree that the outlook for credit is constructive, with minimal defaults projected for both the remainder of 2014 and 2015. Therefore, unless there is a significant move in Treasury rates, prices should rebound and we anticipate a positive return for the balance of 2014 and 2015.


Overview

Fund price as of 10/29/14

Issue price: 9.92

Redemption price: 9.63

Type of fund: bond fund

Risk and Reward Indicator*: 4

Currency: HKD

Redemption price (previous day): 9.62

Deviation in %: 0.10

Interim profit: -

Equity gains EStG-investors in %: -

Equity gains KStG-investors in %: -

Annual high (3/6/14): 10.20

Annual low (10/16/14): 9.41


* 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: 9/30/14

1 year: 3.22

3 years: 25.36

3 years annualised: 7.82

5 years: -

5 years annualised: -

10 years: -

10 years annualised: -

Since inception: 22.67

Since inception annualised: 6.76


Volatility in %

Date: 9/30/14

3 years: 5.06

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