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AllianzGI Convertible fund (ANZAX)

How This Bond Fund Has Beaten the Stock Market Over 25 Years
By Lewis Braham
Barron's
June 24, 2020 6:00 am ET

Not many money managers can say they have beaten the stock market—and
done so with less volatility—over the past 25 years. Doug Forsyth and
Justin Kass can.

They manage the $1.5 billion AllianzGI Convertible fund (ticker:
ANZAX), which invests in convertible bonds. These hybrid
securities—which can be converted into equity when the companies’
common stock shares trade above a predetermined target, or
“conversion” price—offer the downside principal protection of bonds
and some of the upside of stocks.

“An ideal convertible should have 60% to 80% of the upside of the
underlying equity and 50% or less of its downside,” Kass says. “In a
perfect world, our entire portfolio would have these total-return
characteristics.” The world hasn’t been perfect, but the fund has
performed well nonetheless. AllianzGI Convertible has delivered a
10.3% annualized return since its 1993 inception, versus the S&P 500
index’s 9.6%, and it did this with 7% less volatility. It charges a
5.5% load, which many brokers, such as Fidelity and TD Ameritrade,
waive, and has a 0.96% expense ratio.

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Over the period Jan 1994 - May 2020, with candidate
funds VFINX VUSTX VFITX ANNPX, ANNPX (AllianzGI Convertible Institutional)
gets a weight of 19% in the optimal portfolio according to Portfolio Visualizer. Any thoughts on ANZAX?

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