PIMCO GIS Income Fund

Seeking high current income

MSCI ESG Rating: NIL

Suitable for: Growth | Aggressive

The Income Fund is a portfolio that is actively managed and utilises a broad range of fixed income securities that seek to produce an attractive level of income while maintaining a relatively low risk profile, with a secondary goal of capital appreciation. 

From now to March 2025, the Fed is likely to further cut rates in 0.25% moves at each Federal Open Market Committee (FOMC) meeting in November, December, January and March. The Fed Funds rate is expected to fall to 3.75-4.00% at end-March 2025. The belly of the curve (4-7 years) currently offers good risk-reward at present, which this fund is well-positioned for.

Why we like the fund

Potentially attractive yield – The Fund has a yield-to-maturity of 6.86%^1,3 and this provides additional buffer against any further increases in rates or spreads. 

Diversified approach – The Fund is highly diversified with 6,800+ holdings, investing across the entire fixed income market. As we approach the later stage of the economic cycle, holding a higher quality and diversified portfolio is crucial to protect against a market selloff. 

Capital preservation – Consistent income can help build returns over time, with capital gain potential when markets recover. The Fund is built for resilience under many scenarios for rates & spreads.

PIMCO GIS Balanced Income and Growth Fund

All weather, balanced strategy seeking income and growth

MSCI ESG Rating: NIL

Suitable for: Growth | Aggressive

Uncertainties remain high going into 4Q 2024, with geopolitical issues and a contentious US presidential election on the horizon. This uncertainty provides both risk and opportunity, thus investors should maintain a diversified approach to ride through the volatility while remaining invested.

Income investing can be a suitable investment strategy for investors who want to be defensive as income instruments tend to be less volatile, while the passive income generated provides some returns for investors.

Why we like the fund

Diversified exposure for new investors – The Fund is a high quality 60% Equity, 40% Fixed Income strategy, designed to be a core holding for investors across market environments and cycles. The balanced approach also reduces market timing risk.

Generates passive income – The Fund seeks an attractive, consistent distribution yield and long-term NAV stability.

Systematic approach to growing wealth – The Fund adopts a disciplined, systematic approach to equity investing, instead of active stock picking which can be prone to emotional biases. The Fund’s core equity strategy not constrained or biased to any particular style, enabling long term growth.

M&G (Lux) Optimal Income Fund

Capture higher yields to beat inflation

MSCI ESG Rating: A

Suitable for: Balanced | Growth | Aggressive

2024 so far has been characterized by slowing inflation and better-than-expected economic growth. As a result, bond yields rose. Going into Q4 2024, we are now at the beginning of a rate cut cycle, reflecting an environment supportive of positive economic growth and relatively low defaults.

In this environment, investors can benefit by having exposure to a basket of high yield and investment-grade bonds to diversify and increase portfolio resilience.

Why we like the fund

Potential for high income – The Fund offers a monthly distribution share class, with a historical dividend payout of 6.0% per annum of net asset value per share.

Globally diversified – The Fund targets the most attractive opportunities across sectors, issuers and markets such as US, Europe, UK.

Flexible allocation within fixed income assets – The Fund offers a good entry point into fixed income, driven by interest rate volatility and falling inflation. The Fund also provides optimal flexibility to allocate across government, investment grade corporate and high yield corporate bonds.

LionGlobal Short Duration Bond Fund

Building defensive yields

MSCI ESG Rating: A

Suitable for: Balanced | Growth | Aggressive

Interest rates are anticipated to decrease for the rest of 2024 in most developed markets. Specifically, we expect yields on shorter duration U.S. Treasury bonds to decline in a gradual manner throughout the fourth quarter of 2024.

As time passes, the expected rate cuts will increasingly impact the value of shorter-term bond yields. In order for longer-term bond yields to decrease, real yields would need to go down, and we anticipate only a slight decrease in real yields. The fiscal position of the United States, as well as the supply of bonds, will continue to be potential risks to consider.

Therefore, short duration bonds can benefit from this shift in interest rates.

Why we like the fund

Diversified investment grade bonds – The Fund holds a diversified basket of various investment grade bonds to support yields and lower risks.

More defensive in nature – Short dated bonds are less sensitive to interest rate movements, and thus fall less in price should interest rates rise.

Potential for higher yield than cash – Short duration bonds often offer higher yields compared to cash or money market funds. While the yields may not be as high as longer-term bonds, they can still provide a competitive return on investment. This makes short duration bonds an attractive option for investors seeking a balance between income and lower risk.

Allianz Income and Growth

Position for income and potential growth

MSCI ESG Rating: A

Suitable for: Growth | Aggressive

The Fund aims to provide high monthly income, potential capital appreciation, and lower volatility than pure equity funds, making it suitable for investors seeking a "participate-and-protect" return profile.

The start of the US’ rate cutting cycle amid a resilient US economy should be positive developments for stocks.

Stable credit fundamentals, lower interest rates and low refinancing needs suggest low default rates, which is beneficial for bond investors.

Why we like the fund

A diversified 3-sleeve approach – The fund adopts a “three-sleeves” approach, with the core holdings invested primarily in a portfolio consisting of 1/3 US high-yield bonds, 1/3 US convertible bonds and 1/3 US equities/equity securities.

Position for income and potential growth – The three-sleeves approach has historically provided investors with good upside participation potential and lower downside risk compared to pure equity.

Targeted monthly dividend – The fund aims to provide a stable income stream regardless of NAV fluctuations.

Allianz Income and Growth

Position in companies with solid financial and ESG performance

MSCI ESG Rating: AA

Suitable for: Growth | Aggressive

Global sustainability challenges are introducing new risks for investors, and modern investors may seek to re-evaluate traditional approaches to investment. As Environmental, Social and Governance (ESG) grows in significance, fund flows into sustainable investing has seen sustained increase year-on-year. The impressive advancement has been mainly driven by institutional investors, and we have also seen increasing interest from retail investors.

Companies prioritising ESG factors are becoming increasingly attractive to investors as they may potentially generate superior long-term financial performance.

We believe that integrating ESG factors in the investment decision making process will help investors mitigate certain risks and improve the quality of their portfolios.

Why we like the fund

Best-in-class approach to sustainable and responsible investing (SRI) – The fund focuses on high conviction Sustainable Responsible Investment (SRI) investments and integrates ESG assessment of prospective investments, focusing on companies with solid aspects of ESG and financial characteristics.

Resilience in diversification – The fund has exposure to a global portfolio of quality stocks with sustainable growth at reasonable valuations.

Generating competitive and sustainable income – The fund focuses on high quality companies generating returns sustainably above the cost of capital, with a clear growth trajectory, on reasonable valuations.

AB Low Volatility Equity Portfolio

Seeks to deliver high quality and stability at an attractive price

Morningstar Rating: AA

Suitable for: Growth | Aggressive

Equity portfolios designed to smooth volatility are especially appealing in the current market environment and companies that offer a combination of quality and stability at attractive prices are investments that ride through near-term uncertainty.

In the long-term, companies with these features are best positioned to deliver strong returns through changing environments and emerge as winners later.

With uncertainties around the outcome of the US elections and geopolitical tensions in Eastern Europe and the Middle East, investors can position more defensively by holding more high-quality stocks in your portfolio.

Why we like the fund

Healthy returns with low volatility – The investment team selects a portfolio of global equities that appear to be of high quality, have low volatility and reasonable valuations, and offer attractive shareholder returns.

Experienced and well-resourced Investment team – The team has decades of combined experience. As bottom-up stock pickers we focus on fundamental research and analysis, drawing on firmwide expertise of AB’s investment specialists to identify the best businesses across the world.

Potential to grow your capital – The Portfolio aims to increase the value of your investment over time through capital growth.

FSSA Dividend Advantage Fund

Capturing the Asian growth story

MSCI ESG Rating: A

Suitable for: Balanced | Growth | Aggressive

China's recent stimulus measures, including rate cuts and support for property and equities markets, have boosted risk assets and sparked optimism among investors. The coordinated approach taken by policymakers is seen as a positive surprise. Further fiscal easing and support for the property market have been promised, with plans to inject funds into state banks and issue special sovereign bonds. While these actions are steps in the right direction, more needs to be done to address economic challenges such as the real estate sector, declining confidence, and deflationary trends. Despite this, a rebound in Hong Kong and China stocks is expected due to attractive valuations and excessive pessimism that was previously priced in.

Why we like the fund

Diversified exposure in the Asian region – The fund offers broad exposure towards China, India and ASEAN equities, allowing investors to benefit from the growth trends in the region.

Preference for quality companies – The fund adopts a bottom-up selection methodology to identify high quality companies with sustainable and predictable growth to invest for the long term.

Proven track record – In a low real interest rate environment, this fund appeals to investors who are looking for yield; it pays a quarterly dividend of approximately 4% p.a.