Upload
ramen24
View
900
Download
2
Tags:
Embed Size (px)
Citation preview
Investors should consider the investment objectives, risks, charges and expenses of this Fund carefully before investing. This and other information is contained in the Fund's prospectus, which may be obtained by contacting your financial advisor or by calling 1-888-877-4626. Please read the prospectus carefully before you invest or send money.
Allianz Global Investors LLC, 1345 Avenue of the Americas, New York, NY 10105-4800. www.allianzinvestors.com
Reposition for a New RealityMoving Forward in Challenging Times
Presenter NameDate
© Copyright Allianz Global Investors 2009
1What We’ll Cover Today
Chapter 1. The World is Changing
Chapter 2. Rethinking Asset Allocation
Chapter 3. Paths to Tomorrow’s Portfolio
Repositioning for a New Reality │ 2
© Copyright Allianz Global Investors 2009
The World Has Changed
How will I meet my financial objectives?
Will traditional strategies work?
Do I need a new strategic mindset?
Repositioning for a New Reality │ 3
What Will the New Reality Look Like?
Key characteristics:
Rebalancing of global power
Re-emergence of inflation
Restrained economic growth
More frequent market shocks
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 4
Rebalancing of Global Power
Greater concentrations of wealth in economies once described as “emerging”
Accelerating pace of consumer demand, population growth
China has become a creditor nation
Built-up reserves of foreign currencies will influence capital markets
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 5
Source: World Bank
Global surge of the middle class
Re-emergence of Inflation
Growing demand will re-inflate commodities
Fiscal stimulus will increase global inflationary pressures
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 6
Source: OECD, Total Global CPI: all items, as of January 2008.
Ye
ar-O
ver-
Yea
r C
hang
e (%
)
Extended disinflation trend due to reverse
Restrained Economic Growth
“Speed limits” on corporate earnings
Constrained investment returns
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 7
(Real GDP – Year-over-year change)
Gradual recovery through 2010
Source: International Monetary Fund, April 2009
%
More Frequent Market Shocks
Greater volatility in capital markets
Unpredictable disruptions can have significant impacts
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 8
Spread to Treasuries
Uncertainty makes transitions bumpy
Source: LehmanLive. Past performance is no guarantee of future results. It is not possible to invest directly in an unmanaged index. The indices do not reflect deductions for fees, expenses or taxes. High-yield bonds are represented by Barclays Capital High Yield Index; investment-grade corporates by Barclays Capital Credit Investment Grade Index; mortgage-backed securities by Barclays Capital Mortgage Index; and asset-backed securities by Barclays Capital Asset Backed Securities Index. Unlike high-yield bonds, asset-backed securities and investment grade corporates, Treasuries are backed by the full faith and credit of the United States government. Corporate bonds involve substantially higher credit risk than US government securities.
© Copyright Allianz Global Investors 2009
2Rethinking Asset Allocation
Repositioning for a New Reality │ 9
The New Reality of Asset Allocation
Prepare for the unexpected
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 10
History may no longer be a reliable guide
Correlations can shift unpredictably
Diversifying Risk
Asset class diversification does not equal risk diversification
Low-correlating assets are driven by different factors
Manage unpredictability through a broader investment landscape
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 11
© Copyright Allianz Global Investors 2009
3Paths to Tomorrow’s Portfolios
Repositioning for a New Reality │ 12
Where Along the Road Are You?
Traveling toward the new reality
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 13
Path 3: Respond to opportunities
Path 1: Reinforce your core
Path 2: Reallocate your portfolio
Path 1: Reinforce Your Core
Issue:
The current market turmoil has you avoiding all risk assets or has thrown your portfolio off balance, potentially impeding your long-term financial goals.
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 14
Path 1: Reinforce your core
Action Steps:
Re-examine your holdings
Take your risk temperature, including the risk of falling short of goals
Anchor your portfolio with a prudently managed core bond fund or stock fund
- Not overly concentrated
- Disciplined risk management
Path 1: Reinforce Your Core
Issue:
The current market turmoil has you avoiding all risk assets or has thrown your portfolio off balance, potentially impeding your long-term financial goals.
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 15
Path 1: Reinforce your core
Action Steps:
Re-examine your holdings
Take your risk temperature, including the risk of falling short of goals
Anchor your portfolio with a prudently managed core bond fund or stock fund
- Not overly concentrated
- Disciplined risk management
Path 2: Reallocate Your Portfolio
Issue:
With fundamental economic changes underway, traditional stock and bond allocations may no longer be sufficient.
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 16
Path 2: Reallocate Your Portfolio
Action Steps:
Revisit your current strategy
Assume prudent risks among a broad basket of asset classes, being mindful of continued market uncertainty- U.S. stocks and bonds
- International stocks and bonds
- Inflation-protected bonds
- Real estate
- Commodities
- Alternatives
Path 2: Reallocate Your Portfolio
Issue:
With fundamental economic changes underway, traditional stock and bond allocations may no longer be sufficient.
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 17
Path 2: Reallocate Your Portfolio
Action Steps:
Revisit your current strategy
Assume prudent risks among a broad basket of asset classes, being mindful of continued market uncertainty- U.S. stocks and bonds
- International stocks and bonds
- Inflation-protected bonds
- Real estate
- Commodities
- Alternatives
Path 3: Respond to Opportunities
Issue:
Short-term market dislocations and long-term change are likely to produce unique opportunities for enhanced returns.
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 18
Path 3: Respond to Opportunities
Action Steps:
Establish a specific allocation for “special opportunities”
Seek asset classes uniquely poised to profit from long- and short-term catalysts
Examples:- Credit crisis created historic dislocations in bond
market
- U.S. fiscal stimulus is directing more than $100 billion to green projects
- Government investments in mortgages, banks to help stabilize financial systems
Path 3: Respond to Opportunities
Issue:
Short-term market dislocations and long-term change are likely to produce unique opportunities for enhanced returns.
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 19
Path 3: Respond to Opportunities
Action Steps:
Establish a specific allocation for “special opportunities”
Seek asset classes uniquely poised to profit from long- and short-term catalysts
Examples:- Credit crisis created historic dislocations in bond
market
- U.S. fiscal stimulus is directing more than $100 billion to green projects
- Government investments in mortgages, banks to help stabilize financial systems
Recap: Repositioning for a New Reality
History may no longer be a reliable guide for the future
Diversify your risks, not your asset classes
Embark on a three-part journey
- Anchor your portfolio with a core fund
- Reallocate your assets to diversify risks
- Include special opportunities for above-average return potential
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 20
© Copyright Allianz Global Investors 2009
aAppendix. Mapping Out a Strategy with Allianz Global Investors
Repositioning for a New Reality │ 21
Allianz Global Investors Solutions to Consider
Path 1: Reinforce Your Core
- PIMCO Total Return Fund
- Allianz NFJ Dividend Value Fund
Path 2: Reallocate Your Portfolio
- Allianz NFJ International Value Fund
- PIMCO All-Asset Fund
- Allianz OCC Growth Fund
- PIMCO Global Multi-Asset Fund
Path 3: Respond to Opportunities
- PIMCO Investment Grade Corporate Bond Fund
- Allianz RCM Global EcoTrendsSM Fund
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 22
Laying the Groundwork: An Example
The table to the left represents an illustration of how a hypothetical investor who favors PIMCO’s analysis of global economic trends and has an appropriate financial profile and sufficient means, might capture those views in a portfolio optimized using PIMCO’s assumptions. You should note some distinct differences from traditional asset allocation strategies. Of course, one size does not fit all and this model is not intended to create a financial plan for any investor. It does not incorporate the specific financial characteristics of any specific investor, such as the amount of assets available, risk aversion, age, immediate or long-term financial objectives, tax objectives or other personal financial characteristics. It also assumes that an investor would take no responsive action to the markets over a considerable time. Because of the dramatic changes transforming the global economy, the recommendations could be changeable in the short term if trends evolve faster or slower than PIMCO’s analysis. The PIMCO model recommendations reflect market conditions as of 2007 and are subject to change at any time without notice. An asset allocation strategy does not assure a profit or protect against loss.
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 23
Midpoint (%)
Range (%)
Equities
United States 15 12-18
Other advanced countries 15 12-18
Emerging economies 12 6-18
Private 7 6-8
Bonds
United States 5 4-6
International 9 6-12
Real Assets
Real estate 6 3-9
Commodities 11 7-15
Inflation-protected bonds 5 4-6
Infrastructure 5 3-7
Special Opportunities 8 2-14
A Thought Leader
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 24
Cadence Capital Management is an independently-owned investment firm.
Additional Information:
PIMCO Total Return Fund
This Fund invests at least 65% of its assets in a diversified portfolio of fixed-income securities, up to 30% in foreign currency-denominated securities, and 10% in high-yield securities. Investing in foreign securities may entail risk due to foreign economic and political developments; this risk may be enhanced when investing in emerging markets. High-yield bonds typically have a lower credit rating than other bonds. Lower rated bonds generally involve a greater risk to principal than higher rated bonds. This Fund may use derivative instruments for hedging purposes or as part of its investment strategy. Use of these instruments may involve certain costs and risks such as liquidity risk, interest rate risk, market risk, credit risk, management risk and the risk that a fund could not close out a position when it would be most advantageous to do so. Portfolios investing in derivatives could lose more than the principal amount invested in those instruments.
Allianz NFJ Dividend Value Fund
This Fund may invest in value securities. When investing in value securities, the market may not necessarily have the same value assessment as the manager, and, therefore, the performance of the securities may decline. This Fund may use derivative instruments for hedging purposes or as part of its investment strategy. Use of these instruments may involve certain costs and risks such as liquidity risk, interest rate risk, market risk, credit risk, management risk and the risk that a fund could not close out a position when it would be most advantageous to do so. Portfolios investing in derivatives could lose more than the principal amount invested in those instruments.
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 25
Additional Information:
Allianz NFJ International Value Fund
The Fund will normally invest in non-U.S. securities companies which may include emerging market securities. Investing in non-U.S. securities may entail risk due to foreign economic and political developments; this risk may be enhanced when investing in emerging markets. To achieve income, the Fund invests a portion of its assets in income-producing (e.g., dividend-paying) common stocks. When investing in value securities, the market may not necessarily have the same value assessment as the manager, and, therefore, the performance of the securities may decline. This Fund may use derivative instruments for hedging purposes or as part of its investment strategy. Use of these instruments may involve certain costs and risks such as liquidity risk, interest rate risk, market risk, credit risk, management risk and the risk that a fund could not close out a position when it would be most advantageous to do so. Portfolios investing in derivatives could lose more than the principal amount invested in these instruments.
Allianz OCC Growth Fund
The Fund may invest a portion of its assets in non-U.S. securities, which may entail greater risk due to foreign economic and political developments. This Fund may use derivative instruments for hedging purposes or as part of its investment strategy. Use of these instruments may involve certain costs and risks such as liquidity risk, interest rate risk, market risk, credit risk, management risk and the risk that a fund could not close out a position when it would be most advantageous to do so. Portfolios investing in derivatives could lose more than the principal amount invested in those instruments.
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 26
Additional Information:
PIMCO All Asset Fund
The Fund’s performance will depend on how its assets are allocated and reallocated among constituent Funds. There is no assurance that the investment objective of any underlying fund will be achieved. The allocation among the underlying Funds will vary, and the investment may be subject to any and all of the following risks at different times and to different degrees. Investing in smaller companies may entail greater risk than investing in larger companies, including higher volatility. Investing in non-U.S. securities may entail greater risk due to non-U.S. economic and political developments; this risk may be enhanced when investing in emerging markets. The underlying funds may at times invest in mortgage-related securities and may use derivative instruments for hedging purposes or as part of an investment strategy. Use of derivative instruments may involve certain costs and risks such as liquidity risk, interest rate risk, market risk, credit risk, management risk and the risk that a fund could not close out a position when it would be most advantageous to do so. Portfolios investing in derivatives could lose more than the principal amount invested in those instruments. High-yield bonds typically have a lower credit rating than other bonds. Lower rated bonds generally involve a greater risk to principal than higher rated bonds. Although the Fund normally invests in a number of different underlying funds, it will be particularly sensitive to the risks associated with the individual fund(s) and any investments in which that Fund concentrates. The Fund's NAV will fluctuate in response to changes in the NAV of the underlying Funds. The cost of investing in the Fund will generally be higher than the cost of investing in a mutual fund that invests directly in individual stocks and bonds.
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 27
Additional Information:
PIMCO Global Multi-Asset Fund
Fixed income securities will fluctuate in value because of changes in interest rates. The value of equity securities can fluctuate due to general market conditions not specifically related to a company, factors related to a company’s industry, or factors related to the specific company. Investments in non-U.S. securities may be more volatile and subject to special political and currency risks. Non-U.S. securities involving emerging markets may be subject to enhanced levels of these risks. The underlying funds may invest in mortgage-related securities, which are subject to the risks of the mortgages being prepaid. There is no assurance that any private insurers of the underlying mortgages will meet their obligations. High-yield bonds generally involve greater risk of default that investment-grade bonds. The underlying funds’ use of derivatives may involve certain costs and risks such as liquidity risk, interest rate risk, market risk, credit risk, and the risk that the fund could not close out a position when it would be advantageous to do so. Portfolios investing in derivatives could lose more than the principal amount invested in those instruments. Diversification does not ensure a profit or eliminate the risks of investing.
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 28
Additional Information:
PIMCO Investment Grade Corporate Bond Fund
This Fund may invest at least 65% of its assets in a diversified portfolio of investment grade corporate fixed-income securities of varying maturities and up to 30% in foreign securities, which may entail greater risk due to foreign economic and political developments. The value of investment-grade corporate bonds will fluctuate in response to changes in interest rates.
Allianz RCM Global EcoTrends Fund
The Fund may use derivative strategies for investment or hedging purposes. Use of these instruments may involve certain costs and risks such as liquidity risk, interest rate risk, market risk, credit risk, management risk and the risk that a fund could not close out a position when it would be most advantageous to do so. Portfolios investing in derivatives could lose more than the principal amount invested in those instruments.
The Fund is non-diversified and may focus its investments in a small group of companies or industries. The companies in which the Fund invests may have limited operating histories and/or small market capitalizations. The Fund's substantial exposure to non-U.S. securities, including emerging markets securities, also involves special risks, including political and economic risk and the risk of currency fluctuations; these risks may be enhanced in emerging markets.
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 29
Additional Information about Indexes
Alpha measures a portfolio’s risk-adjusted performance, which is the difference between a portfolio’s actual and expected returns, given the level of market risk as measured by beta.Index returns are unmanaged. Unless otherwise noted, index returns reflect the reinvestment of income dividends and capital gains, if any, but do not reflect fees, brokerage commissions, or other expenses of investing. One cannot invest directly in an index.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Morgan Stanley Capital International Europe Australasia Far East (“MSCI EAFE”) Index is a widely recognized, unmanaged index of issuers located in the countries of Europe, Australia, and the Far East.
The Barclays Capital Aggregate Bond Index is composed of securities from the Barclays Capital Government/Credit Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index. It is generally considered to be representative of the domestic, investment-grade, fixed-rate, taxable bond market. The Barclays Capital Credit Investment Grade Index consists of publicly issued U.S. corporate and specified non-U.S. debentures and secured notes that meet the specified maturity, liquidity, and quality requirements. To qualify, bonds must be SEC-registered. It is not possible to invest directly in such an unmanaged index. The Barclays Capital High Yield Index is an unmanaged market-weighted index including only SEC registered and 144(a) securities with fixed (non-variable) coupons. All bonds must have an outstanding principal of $100 million or greater, a remaining maturity of at least one year, a rating of below investment grade and a U.S. Dollar denomination. The Barclays Capital Mortgage-Backed Securities Index is composed of all mortgage-backed pass-through securities of Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC). The Barclays Capital Asset-Backed Securities (ABS) Index include pass-through, bullet, and controlled amortization structures. The ABS index includes only the senior class of each ABS issue and the ERISA-eligible B and C tranches.
The Russell 2000 Index is an unmanaged index that consists of the 2,000 smallest companies in the Russell 3000 Index and represents approximately 10% of the total market capitalization of the Russell 3000. It is generally considered representative of the small-cap market.
© Copyright Allianz Global Investors 2009 Repositioning for a New Reality │ 30