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A Convertible Fund With Advantages Over Peers

Silver-rated AllianzGI Convertible's is strengthened by an experienced team, effective process, and attractive expense profile.


Zachary Patzik: AllianzGI Convertible's experienced team and effective approach have delivered strong results over the long haul. Attractive fees provide another advantage over many of its convertible Morningstar Category peers.

This growing and seasoned team is led by Douglas Forsyth and Justin Kass. The team's process is fundamentally driven and the fund is moderately concentrated with a balanced convertible focus. The strategy's sector allocation will differ from its Bank of America Merrill Lynch All U.S. Convertible Index benchmark's, but the team keeps its delta, a measure of equity sensitivity, within reach. The team maintains this delta metric in the balanced range by adjusting exposures to individual companies and managing the fund's delta at the sector level.

The team's approach has contributed to the fund's category leading return over the trailing 15-year period ending January 2019. Security selection has been key and tactical shifts have aided returns relative to peers. This was notable in 2018 when volatility picked up in the fourth quarter. The team shifted some exposure away from the equity-sensitive semiconductor subsector in Q3 in favor of more balanced technology names which helped dampen volatility. The fund returned 3% for the year while much of the category ended in negative territory.

All considered, this fund's experienced and stable team, effective process, and attractive expense profile support its Silver Morningstar Analyst Rating.

Zachary Patzik does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.