With global markets in shock amid the coronavirus pandemic, are there safe havens for investors seeking wealth protection?
Allianz PNB Life has recently launched a new fixed income offering that has the potential to maximize total returns consistent with prudent investment management. Filipino investors now have the opportunity to invest in the Peso-Hedged Diversified Income Dividend Paying Fund, an insurance and investment product offered exclusively by Allianz PNB Life to customers of the Hong Kong and Shanghai Banking Corporation Limited Philippines.
The fund will be invested in the PIMCO Funds: Global Investors Series plc – Diversified Income Fund (“Diversified Income Fund”) managed by the California-based PIMCO, one of the world’s premier fixed-income managers and owned by Allianz SE, a leading global diversified financial services provider.
“Filipino investors will benefit from PIMCO’s strong track record and well-informed macroeconomic insights, powered by proprietary analytics,” said Allianz PNB Life President and CEO Alexander Grenz.
Risk-adjusted returns
The Peso-Hedged Diversified Income Dividend Paying Fund offers potentially attractive risk-adjusted returns by investing across a wide spectrum of global credit based on investment calls by PIMCO’s reputed fund managers.
Peso funds will be invested in an underlying dollar-denominated fund investment. As an added protection, the fund will have a hedging mechanism that locks in the dollar-to-peso exchange rate to the investment date, minimizing exchange rate fluctuations.
Grenz said dividends will be paid out every quarter to investors as of the record date, which is the 22nd of the last month of the quarter.
It could help prepare moderate risk-takers for future needs such as children’s education and wealth management for succession planning, or even retirement, he said.
Strong track record
Grenz noted that the fund’s underlying dollar-denominated investment, the PIMCO’s Diversified Income Fund, has performed respectably despite global shocks brought about by the Covid-19 pandemic.
At the end of March 31, 2020, which was the height of market volatility as the coronavirus spread globally, the Diversified Income Fund outperformed most major credit indices while minimizing drawdowns.
Diversified, but selective approach
The Diversified Income Fund’s portfolio management team is led by Eve Tournier, Head of European Credit Portfolio Management and Sonali Pier, Portfolio Manager, Multi-Sector Credit, and includes Dan Ivascyn, PIMCO Group CIO.
The Diversified Income Fund’s investment objective is to seek to maximize total returns, consistent with prudent investment management. As such, it is diversified across global credit opportunities based on PIMCO’s best ideas. For example, it currently has an overweight position in financials, mainly senior bonds and select European bank capital with strong balance sheet fundamentals and attractive valuations, as well as mortgage instruments linked to the housing markets in the United States.
Conversely, PIMCO is more cautious about emerging markets, amid uncertainties over global growth and low oil prices that have put incremental pressure on oil exporting and tourism dependent economies. The fund managers employ a selective approach toward countries with strong economic fundamentals and their ability to repay.
PIMCO is in a unique position to leverage the macro insights from its Global Advisory Board when making investment decisions. The Global Advisory Board is composed of financial and policymaking veterans: Ben Bernanke, former US Federal Reserve chairman; former British Prime Minster Gordon Brown; former European Central Bank chief Jean-Claude Trichet; former White House Chief of Staff Joshua Bolten; Ng Kok Song, former Chief Investment Officer of Singapore’s sovereign wealth fund; and Anne-Marie Slaughter, president and CEO of the New America public policy think tank.