Active is: Telling a strong story

Investing is a journey. Here’s how active asset management can get you ahead.

Active is: Looking for future winners

The stock-market dominance of industry sectors and regions changes over time

Through forward-looking analysis, active approaches seek to identify the businesses and sectors with the potential for future growth

At any point in time, a passive index may give the largest weightings to sectors that have already peaked

Passive investments track the world of yesterday

Weighting of sectors in the global equity market (Datastream index)

Identifying future winners

Source: Datastream (sector indices); Allianz Global Investors Capital Markets & Thematic Research. Data from January 1973-January 2017. The above chart is illustrative in nature and should not be considered a recommendation to purchase or sell any financial instrument. Past performance is no guarantee of future results.

Active is: Taking a long-term view

Consumers have been powering emerging-market (EM) economies …

MSCI Emerging-Market Index; cumulative performance* 365%

Emerging Market Economies

The stock-market dominance of industry sectors and regions changes over time

Through forward-looking analysis, active approaches seek to identify the businesses and sectors with the potential for future growth

At any point in time, a passive index may give the largest weightings to sectors that have already peaked

The biggest emerging-market index under-represents consumer demand

MSCI Emerging-Market Index components.**

consumer demand is under-represented

* MSCI, AllianzGI. Cumulative performance is shown from 1/3/2009–31/12/2017. Data as at 31/12/2017.

** MSCI. Data as at 31/12/2017. The above charts are illustrative in nature and should not be considered a recommendation to purchase or sell any specific AllianzGI product. Past performance is no guarantee of future results.

Active is: Having conviction

A brief history

Source: Defense Wins Championships, Longboard, June 2018. The above chart is illustrative in nature and should not be considered a recommendation to purchase or sell any specific AllianzGI product. Past performance is no guarantee of future results.

Active is: Understanding cyclical effects

As the chart shows, some industry sectors have done better in growth periods (so-called cyclical sectors)

Others have historically outperformed as the economy slows (non-cyclical sectors)

Active investment approaches can be particularly useful at inflection points in economic cycles – active managers can tilt a portfolio to capture cyclical effects

How sectors rotate across the cycle

Performance contribution of sectors in the MSCI World Index

How sectors rotate across the cycle

Chart shows how some sectors tend to contribute more performance in growth periods (eg, consumer goods, industrials) and others when the economy slows (eg, utilities, healthcare)

Source: Datastream; Allianz Global Investors Capital Markets & Thematic Research. Data as at November 2017. The above chart is illustrative in nature and should not be considered a recommendation to purchase or sell any specific AllianzGI product. Past performance is no guarantee of future results.

Active is: Responding to changing markets

Correlations are starting to return to normal, after nearly doubling post-crisis

When correlations are lower, stocks tend to rise or fall based on their company-specific characteristics – rather than following the pack

Active management skill can become increasingly valuable – both to identify stocks with potential, and to avoid weaker businesses

After nearly doubling post-crisis, stock correlations have recently declined

S&P 500 Index correlations

Stock correlations have recently declined

Source: FactSet, AllianzGI Economics & Strategy. Data as at 31/12/2017. The above chart is illustrative in nature and should not be considered a recommendation to purchase or sell any specific AllianzGI product. Past performance is no guarantee of future results.

There is no guarantee that actively managed investments will outperform the broader market.

Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be deemed an offer to sell or a solicitation of an offer to buy any security.

The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness of the data is not guaranteed and no liability is assumed for any direct or consequential losses arising from their use. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted. This material has not been reviewed by any regulatory authorities. In mainland China, it is used only as supporting material to the offshore investment products offered by commercial banks under the Qualified Domestic Institutional Investors scheme pursuant to applicable rules and regulations.

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