your canvas for

growth and income

opportunities

Asia

Asia’s growth is outpacing that of Europe and the US.

Even as the global growth rate slows, Asia remains a bright spot for investors.

3

reasons

why Asia

outshines

Asia’s growth engine.

China’s growth may be slowing but in the long term, it is on track to become the world’s largest economy and a superpower.

China’s domestic market ambitions.
A strong domestic market is one of China’s top priorities. With its strategic ‘Made in China 2025’ plan, China is moving away from being the ‘factory of the world’ and an export-led economy to a domestic consumption growth model based on higher value products and services.

Asian Fixed Income –

a canvas of opportunities

Pick the right

asset class –

Asia Fixed Income

Asian bonds are enjoying a resurgence due to the better yields and better valuation levels as compared to a year ago.

With interest rates at record low levels in the developed countries, Asian Fixed Income stands out with its attractive yields.

Infrastructure

Asia needs to spend USD1.7 trillion till 2030* to maintain its growth. Add to this the myriad cross-border connectivity projects that will further spur its growth potential.

 

*Source: Asian Development Bank publication “Meeting Asia’s Needs”, February 2017

Consumption

Over 40%* of the world's e-commerce transactions currently take place in China, up from only 1% about a decade ago. The Chinese are also travelling more. In 2017, 5 billion trips** were made within China, triple the level 10 years ago.

 

*Source: World Economic Forum, 2018

**Source: Goldman Sachs, CNTA, as of 31 December 2017

What is powering

Asia ahead

Source: Bloomberg, J.P. Morgan, Allianz Global Investors, as at 31 January 2019. Based on J.P. Morgan Asia Credit Index.

#Default regions in Asia compared with other regions (EM Europe, Latin America and Middle East & Africa).

Source: J.P. Morgan, as at 4 January 2019.

Attractive valuations

 

After the price correction in 2018, Asian bonds, particularly high yield, are now trading at better valuations.

Yield enhancement benefits

 

The yield-to-maturity (YTM) for Asian investment grade bonds is at a level that is near 5 year highs. The YTM for Asian high yield bonds is also at the high end range over the past 5 years.

Improved
return-to-risk ratio

 

With comparatively higher yields, coupled with a relatively lower default rate# in the high yield space, investors can potentially be adequately compensated for the risk taken.

Source: Bloomberg, JPM, Allianz Global Investors, as at 31 January 2019

*Based on J.P. Morgan Asia Credit Index.

HY refers to high yield. IG refers to investment grade.

How to benefit from Asia’s growth story

Allianz Dynamic Asian High Yield Bond

High conviction portfolio based on fundamental bottom-up selection.

Allianz Flexi Asia Bond

Agile allocation across bond markets.

Active is: Drawing on Asia’s rich potential

Active management becomes increasingly important as we enter a more volatile environment. Together with our proven expertise in Asian Fixed Income we can help you identify Asia’s shining stars.

Over the past three years, our team has won a string of awards that recognise the performance of the strategies under management.

View our awards

Find out how Allianz Global Investors can help you meet your investment goals

All data are sourced from Bloomberg and Allianz Global Investors and as of 31 January 2019 unless otherwise stated.