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HEAD-TO-HEAD: Allianz GI versus Fidelity

FSA compares two Asia high yield bond funds: The Allianz Dynamic Asian High Yield Bond Fund and the Fidelity Asian High Yield Fund.
by Francis Nikolai Acosta

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PERFORMANCE

The Allianz fund was doing well before 2018, but after that, it has lagged its peers.

Discreet annual calendar performance (%)

Fund / index YTD 2020 2019 2018 2017 2016
Allianz GI -1.63 6.35 -7.47 7.61 13.22
Fidelity 2.14 11.95 -4.67 6.95 13.56
APAC HY peer group* 1.56 10.22 -3.81 7.91 6.38
Source: FE Fundinfo. *Singapore mutual fund universe (including funds available to accredited investors)

“They were really riding on that illiquidity premium, but when they stopped investing in those names, the fund has underperformed, and part of that is due to poor credit selection.

“There has been a consistent theme of some holdings that have defaulted or have been downgraded, so that has been a pretty big drag on their performance,” Ge said.

“I think this points to their smaller investment team, which has four members. Looking at the Asia credits universe, especially within high yield, we think Allianz is a bit stretched and that kind of reflects into their credit selection,” he added.

Meanwhile, the Fidelity fund has consistently outperformed its peers long-term.

“The Fidelity fund’s investment process and credit selection framework has been tested and is also strong, and it has a much larger 10-member team,” Ge said.

Three-year annualised volatility

Fund / Index Volatility
Allianz GI 10.71%
Fidelity 9.72%
APAC HY peer group* 9.48%
Source: FE Fundinfo

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