How to achieve both a stable income stream and capital growth amid 2020 uncertainties
published : 31 Mar 2020 at 17:00
A successful investor knows how to manage their investment portfolios, mitigate risks, and keep updating their investment according to the prevailing economic situation.
2019 saw volatile global markets and financial experts debating whether the end of the cycle was approaching. Fear of economic downturn and uncertainties lessened at the beginning of 2020. However, ongoing trade wars, the unsigned trade deal, and slower growth in global markets are pushing investors to be selective this year.
One of the more conservative approaches is the “Three-Sleeves” approach with a portfolio investing in various types of securities. This solution aims to reduce risks in a volatile situation and still generate income stream exactly like “Allianz Income and Growth Fund”.
The fund’s core holdings consist of 1/3 US high-yield bonds, 1/3 US convertible bonds, and 1/3 US equities/equity securities. The fund aims to capture multiple sources of potential income and includes participation in the upside potential of equities at a lower level of volatility than pure-equity investment.
High-yield bonds have always been considered one of the highest yielding fixed income alternatives globally. US high-yield bonds remain an attractive asset class, compared to the depressed yields around the globe.
Meanwhile, convertible bonds contain potential for upside participation and less downside risk. A convertible bond is a corporate bond with the advantage of being converted into common stock at the holders’ option. The feature thus allows investors to gain price appreciation with more limited downside risk.
Lastly, the “Allianz Income and Growth” fund invests in US equities or equity securities with better than expected earnings growth, even though the US economy is slowing. Moreover, beyond 2019, earnings growth is estimated to reaccelerate year-over-year.
As its name suggests, the fund aims to provide income and growth. A unique feature of “Allianz Income and Growth” is its monthly dividends. It gives a stable income stream regardless of NAV fluctuations. As for growth, the fund aims for long-term capital growth and provides asymmetric return profile.
With the strength of three asset classes’ portfolio, the fund can receive income from seven potential sources: high-yield bond coupons, convertible bond coupons, equity dividends, covered call option premiums, gains from the high-yield sleeve, gains from the convertible sleeve, and gains from the equity sleeve. This allows the fund to make the intended distributions, generate high monthly income, and enjoy potential capital appreciation while helping to moderate downside risk.
Talk to your Citigold Relationship Manager to see if Allianz Income and Growth is right for you.
To reap the full benefit of mutual fund investment requires an excellent advisory service that facilitates the complicated procedures and offers a wide range of financial products. Citigold by Citibank is considered among the most investment-worthy for mutual fund investors.
Moreover, Citibank is the only financial advisor in Thailand that provides both direct access to offshore mutual funds and bonds for retail investors. For global funds, Citigold allows investors to invest in foreign currency, reducing financial transaction processes and double fee payment. Also, Citigold offers over 200 funds according to clients’ risk and lifestyle preferences, from six Thai and 13 global, world-class asset management companies.
Furthermore, Citigold clients are able to directly select and buy foreign debentures from over 80 top companies, including Walt Disney, Apple, Coca-Cola, Alibaba, Google Alphabeth and Microsoft, with no intermediary and thus mitigating risks with multiple asset classes.
It is reassuring to note that every Citigold investment comes with advisory from Citi relationship managers trained at the Wharton Global Wealth Institute. Moreover, Citigold has a Total Wealth Advisor (TWA) platform to help each client achieve their financial goals systematically. For example, which mutual funds to pick and how much to invest each month in order to be able to send your children to study abroad when they turn 18.
In addition, clients are entitled to investment and lifestyle privileges in every corner of the world, thanks to Citibank’s global banking network.
Additional services include Citibank Global Wallet that makes travel abroad easier by exchanging money into foreign currency accounts and spending via debit cards without a 2.5% interchange fee. The card supports eight currencies (USD, EUR, HKD, SGD, AUD, CHF, JPY, and GBP) and transactions are convenient through the Citi Mobil Application, reducing financial transaction processes and exchange rate risk by choosing to exchange money at a good rate before travelling. For more information, please contact Citigold Hotline at 0-2081-0999.