Allianz Global Multi Asset Credit SRI
The present environment of low yields and very mixed performance across countries and sectors means that investors in search of yield need to broaden their investment universe by adopting a global and sustainable approach by diversifying into new segments and markets.
Our Global Multi Asset Credit (MAC) strategies makes it possible to take advantage of the opportunities available in the global credit market while targeting positive returns over the market cycle. The strategies are unconstrained and aim to achieve returns through controlled risk management however without the restrictions of a benchmark.
We believe that a MAC strategy offers not just an interesting alternative to traditional investment grade credit, but could even act as a lower volatility substitute for equities over the long term.
Why invest with AllianzGI?
Allianz Global Investors has been a pioneer in responsible investments since 2000, with the first SRI fixed income strategy launched in 2007.
About the strategy
The strategy aims to generate positive returns throughout the interest rate and economic cycles, firstly, by allocating to different credit asset classes, and secondly, through bottom-up individual security selection.
The strategy uses a more robust approach to ESG factors, excluding all sectors prohibited under the UN Principles for Responsible Investment. On an issuer level, the independent SRI research team uses a composite of external data sources, combined with internal research, to score the universe of credits. Issuers with significant controversies or scores below 1 (out of 4) will be excluded from the investable opportunity set.
Reasons to invest
- Sustainable and Responsible Investment approach: We follow an integrated approach and believe that issuers with superior ESG measures will produce more sustainable returns over time.
- Consistent track record: We have extensive experience of investing in fixed income, and have shown returns above the peer group of unconstrained fixed income strategies with lower volatility and drawdowns.
- Winning by not losing: Higher return expectations are hard to meet in the current environment and can lead to excessive risktaking. This is not what our clients are looking for, they want stable returns over a cycle without losing money.
- Alternative to traditional investment-grade portfolios: Traditional benchmarked investment grade corporate bond portfolios suffer from embedded interest rate risk and, as weighting is according to market capitalisation, a higher exposure to the most indebted companies.
Investment philosophy
With a large investable universe and a benchmark-agnostic approach, the team has huge scope to identify and screen across the global credit markets. They are free to pick the best of breed wherever they may be. The investment process focuses on diversified and dynamic asset allocation that varies through the credit cycle.
Investment approach
We view risk management as the responsibility of every member of the investment team, with a focus on diversification and downside protection. Our proprietary risk tools such as our Credit Watch Model and our High Yield Credit Filter which both provide downside protection from idiosyncratic events.
Risk Management
We view risk management as the responsibility of every member of the investment team, with a focus on diversification and downside protection. Our chief metric for risk management is Weighted Duration Times Spread (WDTS). This measures the sensitivity of the portfolio both to underlying government interest rates and credit spreads. The advantages of this are that it allows for consistent and transparent analysis across investment grade and high yield allocations, while also adapting to daily moves in both risk factors.
In addition, we have a suite of proprietary downside protection tools to control for risk. For investment grade credit, we have a proprietary Credit Watch Model and for sub-investment grade issuers, the High Yield Credit Filter. These tools have proved invaluable in helping to avoid distress and defaults throughout our history of investing in these areas.
Investing involves risk. The value of an investment and the income from it may fall as well as rise and investors might not get back the full amount invested.
Investing in fixed income instruments may expose investors to various risks, including but not limited to creditworthiness, interest rate, liquidity and restricted flexibility risks. Changes to the economic environment and market conditions may affect these risks, resulting in an adverse effect to the value of the investment. During periods of rising nominal interest rates, the values of fixed income instruments (including short positions with respect to fixed income instruments) are generally expected to decline. Conversely, during periods of declining interest rates, the values of these instruments are generally expected to rise. Liquidity risk may possibly delay or prevent account withdrawals or redemptions.
Past performance is not a reliable indicator of future results. If the currency in which the past performance is displayed differs from the currency of the country in which the investor resides, then the investor should be aware that due to the exchange rate fluctuations the performance shown may be higher or lower if converted into the investor’s local currency.
The views and opinions expressed herein, which are subject to change without notice, are those of the issuer companies at the time of publication. The data used is derived from various sources, and assumed to be correct and reliable, but it has not been independently verified; its accuracy or completeness is not guaranteed and no liability is assumed for any direct or consequential losses arising from its use, unless caused by gross negligence or wilful misconduct. The conditions of any underlying offer or contract that may have been, or will be, made or concluded, shall prevail.
This is a marketing communication issued by Allianz Global Investors GmbH, www.allianzgi.com, an investment company with limited liability, incorporated in Germany, with its registered office at Bockenheimer Landstrasse 42-44, 60323 Frankfurt/M, registered with the local court Frankfurt/M under HRB 9340, authorised by Bundesanstalt für Finanzdienstleistungsaufsicht (www.bafin.de). The duplication, publication, or transmission of the contents, irrespective of the form, is not permitted.