• It aims to deliver excess returns across various market cycles through a well-balanced mix of five investment styles: Value, Momentum, Revisions, Growth, and Quality.
• Although the fund references the MSCI World Total Return Net Index, stock selection extends to a broader universe of 5,000 to 6,000 stocks, including small-caps.
• The strategy maintains sector and geographic neutrality, focusing instead on the five proven investment styles to deliver long-term outperformance.
• The fund has consistently outperformed peers and its benchmark, all while maintaining effective downside risk management.
What is “Best Styles”?
Figure 1: Definitions of the five successful investment styles
Source: Allianz Global Investors
Figure 2: Best Styles Global maintains stable target allocation to factors over time
Source: Allianz Global Investors. Data as of 31 December 2024.
A benchmark aware, style-focused portfolio
The Allianz Best Styles Global Equity fund is benchmark-aware and references the MSCI World Total Return Net Index, which captures approximately 1,500 large- and mid-cap companies across developed markets. However, to achieve the optimal investment style mix, the fund manager selects stocks with exposure to the five investment styles from a much broader investment universe of approximately 5,000 to 6,000 global stocks, including small caps. As a result, the fund may include off-benchmark holdings and typically maintains a lower weighted average market capitalisation than the benchmark.
That said, the fund is still subject to the constraints outlined in Table 1. The +/- 1% active stock weighting is to ensure that excess returns do not come from a few large bets, but from many small bets to achieve a higher degree of performance stability.
Meanwhile, the +/-3% active sector and regional weightings are meant ensure that sector and geographic allocations are not the main source of excess return. The fund manager considers sector, country, and macro risks to be non-rewarding over the long term and seeks to neutralise them.
Instead, the fund focuses on capturing the risk premiums associated with investment styles such as Value and Momentum, independent of country or sector influences. This approach can be especially beneficial in today’s volatile market environment where unpredictable policy announcements from the Trump administration can cause significant swings in portfolios with concentrated sector or geographic bets.
Table 1: Allianz Best Styles Global Equity portfolio characteristics
|
Number of stocks |
250-350 |
|
Tracking error |
~1-3% p.a. |
|
Beta |
~1 |
|
Target outperformance |
~1-2% p.a. over rolling three-year periods |
|
Active stock weightings |
+/- 1% |
|
Active sector weightings |
+/- 3% |
|
Active regional weightings |
+/- 3% |
|
Off-benchmark stocks |
Usually around 15-35%. No explicit limit but the weight is implicitly limited by the other portfolio constraints |
|
Source: Allianz Global Investors |
|
Table 2: Top 10 holdings versus MSCI World Net Total Return Index
|
Allianz Best Styles Global Equity |
MSCI World Net Total Return Index |
||
|
Name |
Weight |
Name |
Weight |
|
Nvidia |
6.02% |
Nvidia |
5.12% |
|
Microsoft |
4.69% |
Microsoft |
4.66% |
|
Apple |
4.65% |
Apple |
4.09% |
|
Amazon |
2.48% |
Amazon |
2.78% |
|
Meta Platforms |
2.08% |
Alphabet |
2.53% |
|
Alphabet |
1.44% |
Meta Platforms |
2.15% |
|
Johnson & Johnson |
1.44% |
Broadcom |
1.63% |
|
Novartis |
1.35% |
Tesla |
1.22% |
|
Philip Morris International |
1.33% |
JPMorgan Chase & Co |
1.08% |
|
Amphenol |
1.25% |
Berkshire Hathaway |
0.86% |
|
Source: Allianz Global Investors, IDS GmbH - Analysis and Reporting Services. Allocations are scaled to 100% for equities and exclude any cash holdings. Data as of 30 June 2025 |
|||
Figure 3: Geographical breakdown of fund
Figure 4: Sector breakdown of fund
Consistent outperformance over the years
Figure 5: The fund has outperformed in the long run
Figure 6: The fund has outperformed in four out of the past five years
Figure 7: The fund’s smaller drawdown suggests better risk management
Final thoughts
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