AllianzGI and Socially Responsible Investments: Our Capabilities

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1 AllianzGI and Socially Responsible Investments: Our Capabilities Sustainable and responsible investing May 2017 For fund distributors and professional investors use only

2 Our SRI capabilites 2

3 Why integrate ESG1 research into investments? (1/2) Source: The Guardian Source: BBC Source: The Guardian Source: Financial Times 1 ESG = Environmental, Social and Governance - ESG is a neutral term that describes the ESG factors, issues and criteria that may be considered in the investment process. 3

4 Why integrate ESG research into your investments? (2/2) Environmental, social and governance (ESG) issues are material and their impact can be felt across all sectors and geographies. ESG issues may include Resource Scarcity The new UN projection on population World population projected to reach 9.6 billion by 2050 with most growth in developing regions, especially Africa Changing Stakeholder Expectations Demographic Change Scientists Fear Massive Sea Level Rise from "Unstoppable" Melt of West Antarctica Ice Sheet Climate Change Global warming is making hot days hotter, rainfall and flooding heavier, hurricanes stronger and droughts more severe. This intensification of weather and climate extremes will be the most visible impact of global warming in our everyday lives. It is also causing dangerous changes to the landscape of our world, adding stress to wildlife species and their habitat. ESG issues represent investment risks and can have a material impact on portfolios 4

5 What are the most relevant ESG dimensions and factors? Three dimensions multiple factors 1 E Environmental S Social G Governance Factors Carbon footprint Water usage Waste management Pollution Litigation Impact Ratio Factors Human rights Controversial products Employee turnover UN Global Compact signatory Facilities Factors Board independence Remuneration Independent directors Combined CEO/Chair role Risk management Business ethics Taking an SRI approach results in an improved risk / return profile Stocks of sustainable companies tend to outperform their less sustainable counterparts 1 Source: AllianzGI 5

6 ESG analysis identifies risks and serves as early warning signal Anticipation and assessment of material ESG risks: spot early, evaluate and monitor Example: ESG tail risk analysis** Intrinsic ESG Ratings Price Intrinsic ESG override MSCI ESG risk scores for >6,000 corporate issuers* Stock specific ESG risk signal ESG risk: Low Medium Critical Global Research Platform t Research Platform * Environmental Pillar Score, Social Pillar Score and Governance Pillar Score. Rating Scale 0-10 / 0-3 is considered high ESG-risk ** For illustration purposes only. Source: Allianz Global Investors, For illustrative purposes only. 6

7 Why consider Sustainable and Responsible Investing (SRI)? Seeking a more ethical investment portfolio can also lead to identification of companies with sustainable competitive advantages. Defining SRI Sustainable and responsible investing (SRI) is an investment discipline that considers environmental, social and corporate governance criteria (ESG) to generate long-term competitive financial returns and positive societal impact. Consideration of ESG factors allows for a better understanding of a company s intrinsic value Companies concerned about ESG factors tend to be more focused on the long term, are better at anticipating and mitigating risk, and may have superior management teams ESG criteria encourage assessment of risks linked to a company s business or practices ESG criteria indicate which companies will adapt in a changing context and help identify those that are forward-thinking ESG factors help identify companies that are leaders in their field ( Best in Class ) They also point to those companies that have delivered the best turnarounds in ESG ( Best Efforts ) Studies have shown positive correlations between relatively higher ESG scores and performance. 1 Taking an SRI approach results in an improved risk / return profile Source: Allianz Global Investors. 1 For example Alex Edmans showed in 2012 that the higher the employee satisfaction, the better the stock returns, in Edmans, Alex (2012), The Link Between Job Satisfaction and Firm Value, with Implications for Corporate Social Responsibility, Academy of Management Perspectives, 26: Derwall, Bauer, Guenster and Koedijk showed that the most environmentally responsible companies outperformed the least environmentally responsible firms. Guenster/Derwall/Bauer/Koedijk (2005), The Economic Value of Corporate Eco-Efficiency, Journal of European Financial Management, Volume 17, Issue 4, pages

8 Our long standing experience 8

9 AllianzGI has a long-standing ESG track record Understand. It is our conviction that ESG factors are important investment performance drivers, both from a return and risk perspective. Act. We are committed to integrating ESG factors into all investment decisions and across all asset classes. We pursue an active stewardship approach to improve business practices and performance of companies. Total ESG Assets under Management 24.7bn EUR* UNPRI signatory since 2007 Pioneer: ESG capabilities since 2000 ESG Active Stewardship beyond ESG 17 dedicated ESG team members** Portfolio managers and analysts integrating ESG Strong parent: Allianz SE ESG Leader ESG = Environmental, Social and Governance. SRI = Sustainable Responsible Investing. UNPRI = United Nations Principles for Responsible Investment. Source Allianz Global Investors, For illustrative purposes only. * Asset under Management per March ** ESG team and SRI portfolio managers 9

10 AllianzGI is a pioneer in ESG investing First Allianz Norms/ Values based strategy launched First Allianz Impact strategies launched First Allianz ESG Integrated Strategies to be launched First Allianz Global SRI Equity strategy launched First Allianz SRI Fixed Income strategy launched First Multi Asset SRI strategy launched Source: Allianz Global Investors, For illustrative purposes only. 10

11 Why AllianzGI for ESG? Strong expertise No isolated ESG overlay Fundamental ESG research approach Dedicated ESG research team Active stewardship State-of-the-art proprietary digital platform Investment Chatter : Long experience and innovation in ESG investment solutions across multiple asset classes Analysts and portfolio managers are at the core of the process Proprietary ESG risk analysis through our unique intrinsic ESG approach Integrated into global research platform multiplying ESG expertise Global proxy voting coverage and corporate engagement programme Global crowd-sourcing and systematic recording of research and investment views Source: Allianz Global Investors, For illustrative purposes only. 11

12 Best in Class ESG research Experienced ESG Research Team ESG Ratings Model AllianzGI established its dedicated ESG team in sector specialists with regional expertise Proprietary ESG rating covering over 4,300 global stocks ESG ratings also on corporate bonds, sovereigns, supranationals and agencies OUTPUT In-Depth Company Analysis Thematic Research Analysis beyond model driven ratings Deepen knowledge of the business and monitor for controversies Identify long-term trends within or across sectors that provide ESG opportunities or may present ESG risks Integrated ESG Research ESG ratings available across the investment platform ESG Research team actively promoting and discussing ESG issues in regular investor and analyst meetings Taking an SRI approach results in an improved Identifying potential ESG risks and opportunities for our clients risk / return profile Source: AllianzGI, as at September

13 02 Our SRI fund offering 13

14 AllianzGI s SRI fund offering Over a decade of expertise in SRI investing Equity Multi Asset Fixed Income Equity Multi Asset Fixed Income Allianz Valeurs Durables Euroland Equity fund with best-in-class SRI approach Traditional all cap conviction strategy Allianz Euroland Equity SRI Euroland Equity fund with best-in-class SRI approach Traditional all cap conviction strategy Lux vehicle, same strategy as Valeurs Durables Allianz Global Sustainability Global Equity fund with best-in-class SRI approach A fully ESG integrated global portfolio Traditional all cap blend strategy Allianz Europe Equity Climate Transition Euro Equity ESG RANGE A shared long-term and fundamental investment approach Allianz Stiftungsfonds Nachhaltigkeit European Multi Asset fund that follows the Dynamic Multi Asset Plus investment approach with SRI criteria Strategic asset allocation: 20% European equities + 80% Euro bonds Management approach: Equities: Best Styles Bonds: Advanced Fixed Income Allianz Euro Credit SRI Euro Corporate IG Bond fund following a sustainable and responsible investment approach Allianz Euro Oblig Court Terme ISR Euro Ultra Short Term IG Bond fund Allianz Securicash SRI Euro Money Market fund Allianz Green Bond The strategy invests primarily in Green Bonds issued by corporates or to a lesser extent agencies and supranational entities. All strategies build on AllianzGI s proprietary ESG research with analysts around the world. The research process considers environmental and social aspects as well as corporate governance and business behaviour 14

15 35 AllianzGI s SRI fund offering strong AuM growth since Sep 16 Equity Fixed Income Money Markets Advisory Multi Asset / Balanced Asset Class AuM (EUR bn) Equity: 4.8 Fixed Income: 13.7 Money Market: 1.5 Advisory: 10.7 Balanced: 2.6 Total 33.4 Tailor-made solutions for institutional investors relating to SRI policies, ESG criteria, proxy voting, engagement, ESG reporting Source: AllianzGI, as at 30 September 2016, EUR, billions. 15

16 Our SRI products at a glance 16

17 Allianz Global Sustainability Overview Schofield, Paul Experience since 1986 Manages the fund since 09/2011 A fully ESG integrated global portfolio Investment approach Investing in companies on the global stock market with best-in-class sustainable business practices and best-in-class financial fundamentals. The Global Sustainability strategy aims to generate long-term competitive financial returns and a positive impact on society. Top 10 Holdings Portfolio characteristics MICROSOFT CORP 6.65 ROCHE HOLDING AG-GENUSSCHEIN 3.85 ALLIANZ SE-REG 3.25 SAP SE 3.10 CITIGROUP INC 2.83 UNILEVER PLC 2.74 VISA INC-CLASS A SHARES 2.68 NESTLE SA-REG 2.66 SAMSUNG ELECTR-GDR 2.45 DAIKIN INDUSTRIES LTD 2.35 Total Target tracking error: 0,04 Target outperformance: 2% p.a. Target number of stocks: Active sector exposure: +/- 10% Active country exposure: +/- 25% ESG-Ratings: Alpha sources: Registered for Sale in Min 75 % investment in best-in-class ESG rated stocks. Worst-in-class ESG rated stocks excluded. Stock selection Austria, France, other markets upon request. Source: Allianz Global Investors Data as per Past performance is not a reliable indicator of future results. This is for guidance only and not indicative of future and is not a recommendation or solicitation to buy or sell any particular security. This is no guarantee of target performance. 17

18 Allianz Global Sustainability Performance Key features Performance over 5 years (base value 100) in (%) 1 ESG issues are material across all sectors Integrating ESG factors in the investment process produces: Reputational protection An improved risk/return profile Ability to fulfil fiduciary responsibility A positive impact on society The AllianzGI Global Sustainability Fund Concentrated global portfolio with ESG at the heart of the investment process. Invests in quality companies that manage E, S & G risks on a best in class basis. Long-term track record of outperformance against global indices Measurable, positive impact on society Performance History (%) 1 Allianz Global Sustainability DOW JONES Sustainability World Index (Total Return) 1 Month Month YTD Year Years p.a Years p.a Since Inception p.a Facts and figures ISIN LU (A EUR) Bloomberg-Ticker DREGLSU LX Reuters-Ticker - Benchmark DOW JONES Sustainability World Index (Total Return) Launch Date 02/01/2003 Net Assets EUR million Distribution payout on 15/12/2016 EUR TER (%) Data as at 31/03/ Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable indicator of future results. Any front-end loads (for this fund currently 5.00 %) reduce the capital employed and the performance. The fund unit price may be subject to a strongly increased volatility. 2 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last fiscal year (abridged fiscal year). 18

19 Allianz Valeurs Durables Overview CletMessadi, Christine Experience since 1994 Manages the fund since 06/2002 Traditional all cap conviction strategy Investment approach High conviction and SRI approach to European equity investing To provide medium and long-term performance by investing in equities which meet the following criteria of sustainable development: social policy, respect of human rights, corporate governance, environmental policy and ethics. These criteria are applied in addition to the classic financial analysis to provide a portfolio offering superior financial and ESG qualities. Top 10 Holdings Portfolio characteristics TOTAL SA 4.29 BNP PARIBAS 3.74 SANOFI 3.53 SAP SE 3.20 ING GROEP NV NL LVMH MOET HENNESSY LOUIS VUI 2.87 SOCIETE GENERALE SA 2.85 AXA SA 2.70 KONINKLIJKE PHILIPS NV 2.31 INTESA SANPAOLO 2.30 Total Target tracking error: Up to 5% p.a. Average rating: 2.75 (MSCI EMU 2.35) Target number of stocks: Average turnover ratio: Investment universe: Registered for Sale in 20% over 5 years 60% of European equities are ineligible based on SRI ratings Belgium, France, other markets upon request. Source: Allianz Global Investors Data as per Past performance is not a reliable indicator of future results. This is for guidance only and not indicative of future and is not a recommendation or solicitation to buy or sell any particular security. 19

20 Allianz Valeurs Durables Performance Key features Performance over 5 years (base value 100) in (%) 1 We feel that a socially responsible investment (SRI) approach helps ensure sustained performance over the long term and, in the shorter term, reduces the risks incurred from traditional equity management. Established in 2002, Allianz Valeurs Durables is one of Europe s largest SRI funds with almost EUR 600m in assets under management. The investment process is based on financial and extra-financial criteria. The portfolio thus seeks to offer the best possible combination of SRI and financial qualities. Allianz Global Investors is one of the leading SRI fund managers in Europe. Performance History (%) 1 Allianz Valeurs Durables MSCI EMU Total Return (Net) 1 Month Month YTD Year Years p.a Years p.a Since Inception p.a Facts and figures ISIN FR (IC-EUR) Bloomberg ticker AGFOPII FP Reuter Tickers ALLIANZGI01 Benchmark MSCI EMU TR (Net) Launch Date 12/06/2002 Net Assets (All shares) EUR million TER (%) Data as at 31/03/ Referred periods : 1 month starts as of 28/02/2017, 3 months since 30/12/2016, YTD starts as of 30/12/2016, 12 rolling months starts as of 31/03/2016, 3 rolling years starts as of 31/03/2014, 5 rolling years starts as of 30/03/2012, since inception starts as of 12/06/2002. Performance calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to BVI method (German Investment and Asset Management Association). Past performance is not a reliable indicator of future results. Generally speaking, neither actual nor simulated past performance are a reliable indicator of future results. Any front-end loads (for this fund currently 5.00 %) reduce the capital employed and the performance. The fund unit price may be subject to increased volatility. The fund unit price may be subject to a strongly increased volatility. 2 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last financial year. 20

21 Allianz Euroland Equity SRI Overview CletMessadi, Christine Experience since 1994 Manages the fund since 10/2010 Traditional all cap conviction strategy Investment approach To provide medium and long-term performance by investing in equities which meet the following criteria of sustainable development: social policy, respect of human rights, corporate governance, environmental policy and ethics. These criteria are applied in addition to the classic financial analysis to provide a portfolio offering superior financial and ESG qualities. Top 10 Holdings Portfolio characteristics TOTAL SA 4.31 BNP PARIBAS 3.67 SANOFI 3.53 SAP SE 3.21 ING GROEP NV NL LVMH MOET HENNESSY LOUIS VUI 2.86 SOCIETE GENERALE SA 2.79 AXA SA 2.70 KONINKLIJKE PHILIPS NV 2.34 INTESA SANPAOLO 2.29 Total Target tracking error: Target number of stocks: Benchmark: Registered for Sale in No formal target MSCI EMU TR (Net) Switzerland, Austria, France, other markets upon request. Source: Allianz Global Investors Data as per Past performance is not a reliable indicator of future results. This is for guidance only and not indicative of future and is not a recommendation or solicitation to buy or sell any particular security. 21

22 Allianz Euroland Equity SRI Performance Key features Performance over 5 years (base value 100) in (%) 1 Clear leadership in SRI Recognized product with a proven record. Excellent long-term management expertise Management based on research and analysis of company fundamentals. Stock-picking based on financial and ESG criteria to obtain a better assessment of a company's intrinsic value and the risks related to its activity. A concentrated, low-turnover portfolio (20 % p.a. on average). Performance History (%) 1 Allianz Euroland Equity SRI Ex-post Index 1 Month Month YTD Year Years p.a Years p.a Since Inception p.a Facts and figures ISIN LU (W-EUR) Bloomberg ticker AEURLNE LX Reuter Tickers ALLIANZGI01 Benchmark MSCI EMU TR (Net) Launch Date 26/10/2010 Net Assets EUR million TER (%) Data as at 31/03/ Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable indicator of future results. Any front-end loads reduce the capital employed and the performance stated. All performance data in respect of Allianz Euroland Equity SRI W - EUR prior to the launch date, 26/10/2010, are based on another investment fund, namely ALLIANZ VALEURS DURABLES, a French-domiciled fund, which is not registered for sale in Germany. Allianz Euroland Equity SRI is managed by the same team using the same strategy. This does not imply that Allianz Euroland Equity SRI will enjoy similar performance in the future. The fund unit price may be subject to a strongly increased volatility. 2 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last fiscal year (abridged fiscal year). 22

23 Allianz EURO CREDIT SRI Overview Dejonghe, Hervé Experience since 2001 Manages the fund since 08/2011 Corporate bond fund following a sustainable and responsible investment approach Investment approach The Allianz Euro Credit SRI strategy aims to outperform the Barclays Capital Euro Corporate benchmark whilst taking advantage of opportunities offered on the investment grade corporate credit market with an SRI best-in-class approach. The Allianz Euro Credit SRI Team is comprised of the Investment Grade Team and the AllianzGI ESG Research Team. Top 10 Holdings Portfolio characteristics RABOBK MAR FIX 2.250% ATF NETHERLANDS BV.FIX 2.125% KBC GROUP NV EMTN FIX 0.750% ENI SPA EMTN FIX 0.625% VODAFONE GROUP PLC EMTN FIX 0.375% AMERICAN HONDA FINANCE FIX 1.300% CFCM NORD EUORPE EMTN FIX 2.125% IE2 HOLDCO EMTN FIX 2.875% DIASM EMTN FIX 0.875% SOCIETE GENERALE ESNP VAR Total 7.60 Active country exposure: Target outperformance: Companies ranking: Currency hedging: ESG-Ratings: Max. 10% EM Outperform the benchmark Between AAA and BBB- (Standard & Poor's) and Aaa and Baa3 (Moody's) at the time of investment Systematic hedging of currency risk for securities denominated in foreign currencies Around % of stocks from AllianzGI s European fixed income and monetary universe are eligible for ESG plan and human rights Source: Allianz Global Investors Data as per Past performance is not a reliable indicator of future results. This is for guidance only and not indicative of future and is not a recommendation or solicitation to buy or sell any particular security. This is no guarantee of target performance. 23

24 Allianz EURO CREDIT SRI Performance Key features Performance over 5 years (base value 100) in (%) 1 Sustainable development of our portfolios A long-term conviction process with extra-financial ESG criteria and the respect of human rights providing a more exhaustive evaluation of issuers long term risk. Both bond picking and tactical credit exposure are key to our investment process Within bond picking we equally emphasise fundamental financial analysis and ESG (Environmental, Social and Governance) analysis. ESG analysis: a two-step process The ESG analysis combines a quantitative approach based on data provided by two external rating agencies and a qualitative step being performed internally by the ESG specialists, who belong to the leading SRI managers in Europe. Performance History (%) 1 Allianz EURO CREDIT SRI Barclays Capital Euro Corporate 1 Month Month YTD Year Years p.a Years p.a Since Inception p.a Facts and figures ISIN Bloomberg ticker Reuter Tickers Benchmark LU (I EUR) ALESRII LX ALLIANZGI01 Barclays Capital Euro- Aggregate Corporate Index Launch Date 13/01/2015 Net Assets EUR million TER (%) Data as at 31/03/ Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable indicator of future results. Any front-end loads reduce the capital employed and the performance stated. All performance data in respect of Allianz Euro Credit SRI - I EUR prior to the launch date, , are based on another investment fund, namely ALLIANZ EURO CREDIT SRI, a French-domiciled fund, which is not registered for sale in Germany. Allianz Euro Credit SRI is managed by the same team using the same strategy. This does not imply that Allianz Euro Credit SRI will enjoy similar performance in the future. 2 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last financial year. 24

25 Allianz Stiftungsfonds Nachhaltigkeit Overview Bernhard, Jan Experience since 2004 Manages the fund since 09/2014 Active SRI - related Multi Asset fund for conservative investors Investment approach The fund aims to generate an adequate current income and protect the fund s value. At the same time, it aims at long-term capital gains. The fund invests variable portions of its assets in equities and interestbearing securities which meet certain sustainability criteria. The lion s share of the fund s assets will be invested on the bond market. Top 10 Holdings Portfolio characteristics ALLIANZ EURO CREDIT SRI-W FRANCE (GOVT OF) FIX 3.250% FRANCE (GOVT OF) FIX 4.250% FRANCE (GOVT OF) FIX 4.250% FRANCE (GOVT OF) FIX 3.500% FRANCE (GOVT OF) FIX 2.250% ALLIANZ GREEN BOND-W EUR LU BUNDESOBLIGATION 173 FIX 0.000% KFW FIX 2.500% FRANCE (GOVT OF) FIX 1.750% Total Equities incl. REITS: Max. 30% High-yielding securities: Max. 10% Investments outside europe: Investments in emerging markets: Return Profile: Sources of Alpha: Max. 30% Max. 20% Asymmetric Stock selection; active asset class allocation Source: Allianz Global Investors Data as per Past performance is not a reliable indicator of future results. This is for guidance only and not indicative of future and is not a recommendation or solicitation to buy or sell any particular security. 25

26 Allianz Stiftungsfonds Nachhaltigkeit Performance Key features Performance over 5 years (base value 100) in (%) 1 Broad diversification across bonds and equities; A sustainability analysis is conducted for all equity and bond issuers. Particular attention is given to environmental, social and corporate governance criteria; Integrated sustainability strategy (best-in-class approach) and exclusion criteria; Active asset class steering and active selection within the asset classes in order to generate added value (management approach: equities: Best Styles; bonds: Advanced Fixed Income); Risk steering: active risk management to mitigate downside risks Performance History (%) 1 Allianz Stiftungsfonds Nachhaltigkeit 1 Month Month 0.95 YTD Year Years p.a Years p.a Since Inception p.a Facts and figures ISIN LU (P EUR) Bloomberg ticker COMTAAS LX Reuter Tickers ALLIANZGI01 Benchmark No Benchmark Launch Date 20/06/2007 Net Assets EUR million TER (%) Data as at 31/03/ Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Benchmark (90% REX + 10% DAX) valid till Past performance is not a reliable indicator of future results. Any front-end loads reduce the capital employed and the performance. 2 TER (Total Expense Ratio): total expenses (excl. transaction costs) incurred by the fund during the past financial year. As the Fund invested on its fiscal year end day more than 20 % of its assets in such other UCITS or UCI (target funds) which publish ongoing charges, the ongoing charges of those target funds are taken into account when calculating the Ongoing Charges of the Fund on its fiscal year end. However, if target funds do not publish their own ongoing charges, it is not possible to take into account these charges when calculating Ongoing Charges. Source: Allianz Global Investors. 26

27 Allianz Green Bond Overview Dejonghe, Hervé Experience since 2001 Manages the fund since 2011 The fund invests primarily in "green bonds" of international public or private issuers. Investment approach "Green bonds" are interest-bearing securities that are issued in order to finance environmental projects. The fund also invests in bonds whose issuers show a strong environmental performance in the opinion of fund management. Up to 5 % of fund assets may be invested in non-investment grade bonds provided that they are rated at least BB- (Standard & Poor's categorization) upon acquisition. The fund s investment objective is to generate capital growth over the long term. Top 10 Holdings Portfolio characteristics FRANCE (GOVT OF) FIX 1.750% EDF EMTN FIX 1.000% UNIBAIL-RODAMCO SE EMTN FIX 2.500% BNP PARIBAS EMTN FIX 0.500% BANK OF AMERICA CORP MTN FIX 2.151% SEB GMTN FIX 0.300% HERA SPA EMTN FIX 2.375% TENNET HOLDING BV EMTN FIX 1.250% IDF EMTN FIX 0.500% SUMIBK GMTN FIX 2.450% Total Bond issues: Investments in high-yield market: Countries: Foreign currency exposure: Investment Grade fund in several currencies in developed economies max. 5% 60% in OECD countries and the main emerging markets Exceeding 10% of fund assets needs to be hedged against euros Source: Allianz Global Investors Data as per Past performance is not a reliable indicator of future results. This is for guidance only and not indicative of future and is not a recommendation or solicitation to buy or sell any particular security. 27

28 Allianz Green Bond Performance Key features Performance since inception (base value 100) in (%) 1 Quickly growing and diversifying market First Green Bonds issued in 2007 (European Investment Bank), now a market worth around EUR 90 bn. New issues expected in the context of the COP21. Recent boom in issuance from corporates offers more attractive return opportunities. Large issuance in the main core currencies. Sustainability and transparency Green Bonds (GBs) trade in line with standard bonds from the same issuer and also offer the same risk. However, the use of proceeds is much more transparent. The environmental value is reported clearly. Comprehensive internal expertise Managed by one of Europe s leading SRI fund managers. Backed by a team of investment professionals covering the full scope of ESG research. One dedicated Green Bond specialist. Bottom-up driven investment process combined with a tactical overlay. Performance History (%) 1 Allianz Green Bond Benchmark 1 Month Months YTD Since Inception p.a Facts and figures ISIN Bloomberg-Ticker Reuters-Ticker Benchmark Launch Date 17/11/2015 Net Assets EUR million TER (%) LU (I EUR) ALGRBDI LX ALLIANZGI01 60% THE BOFA MERRILL LYNCH GREEN BOND INDEX EUR HEDGED, 40% MERRILL LYNCH EMU CORPORATE INDEX (ER00) UNHEDGED REBASED LAST BUSINESS DAY OF MONTH IN EUR Data as at 31/03/ Calculated at the net asset value, excl. front-end load, distributions reinvested. Calculation according to method as defined by BVI, the German Fund Companies Association. Past performance is not a reliable indicator of future results. Any front-end loads reduce the capital employed and the performance. 2 Benchmark history: until 30/11/ % BofA Merrill Lynch Euro Corporate Index + 60% BofA Merrill Lynch Green Bond Index (hedged into EUR). 3 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last financial year. The reported TER of 0.61 % p.a. relates to an abridged financial year. Since the TER is shown on an annualised basis, it may differ from the costs of 0.61 % p.a. that are actually expected. 28

29 Allianz Europe Equity Climate Transition Overview Clet-Messadi Christine Experience since 1994 Reuss, Isabel Active investing in climate transition Abadie, Anne-Claire Experience since 1994 Experience since 2011 Investment approach The mutual fund's objective is to deliver a performance superior to the European equity markets over the recommended investment period, by investing on corporates shares that satisfy planet respect criteria, an environment friendly economic development. Our proposal for investing actively in a low carbon economy. 59% of Allianz Europe Equity Climate Transition is invested in stocks that offer products and services which enable the transition to a low carbon economy. Top 10 Holdings ROCHE HOLDING AG-GENUSSCHEIN 4.30 SAP SE 3.84 TOTAL SA 3.83 IBERDROLA SA 3.43 SIEMENS AG-REG 3.29 BNP PARIBAS 3.15 VALEO SA 3.11 SCHNEIDER ELECTRIC SE 3.10 ING GROEP NV NL INVINEON TECHNOLOGIES AG 2.95 Total Portfolio: Adressing carbon risks: Financing the transition to a low carbon economy: Portfolio characteristics Active management stocks 1st objective: Protect the value of our investments Comprehend the portfolio exposure to carbon risk. 2nd Objective: Encourage the transition to a low carbon economy Integrate "climate" impact of investments in the real economy: Assess the climate performance of companies, Reward and encourage positive dynamics, Finance the solutions offered by companies. Source: Allianz Global Investors Data as per Past performance is not a reliable indicator of future results. This is for guidance only and not indicative of future and is not a recommendation or solicitation to buy or sell any particular security. 29

30 Allianz Europe Equity Climate Transition Performance Key features Best Performer Companies that emit the least carbon compared to their peers in light of specific indicators relevant to their industries. Highlight best practices in each sector. Performance over 5 years (base value 100) in (%) 1 Best Effort Companies showing significant efforts to reduce their greenhouse gas emissions. Reward the players who show positive dynamics in their climate performance. Best Solution Companies whose activities, products or services help reduce GHG emissions by others. Favor the players offering solutions for a low carbon economy. Performance History (%) 1 Allianz Europe Equity Climate Transition 1 Month Months 6.28 YTD year years p.a years p.a Since Inception p.a Facts and figures ISIN FR (IC-Share) Benchmark MSCI Europe Total Return (Net) Management company Allianz Global Investors GmbH Launch Date 24/11/2015 Net Assets as of 31/08/2015 EUR million Fund currency EUR Registered for sales FR TER (%) Data as at 31/03/ calculation basis: net asset value (excl. front-end load); distributions reinvested. Calculation according to the BVI method. Any front-end load will reduce the capital invested and weigh on the performance set out above. 2 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last financial year. 30

31 Appendix 31

32 Global AllianzGI ESG functions Global Executive Committee Members Global Head of ESG ESG Policy, Strategy and Market Positioning, ESG Investment Offering and Product Design Global Head of ESG Research Proprietary ESG Research, Engagement, Proxy Voting Global Head of ESG Steffen Hoerter (23/15)* Global Head of ESG Research Eugenia Jackson (13/1)* ESG Integration Manager Nina Hodzic (12/1)* Senior ESG Analyst Marissa Blankenship (18/5)* ESG Analyst Robbie Miles (7/2)* ESG Analyst Marie-Sybille Connan (24/8)* ESG Analyst Mathilde Moulin (13/9)* ESG Analyst Henrike Kulmann (9/5)* N.N (tbd.)* * Investment Industry Relevant Experience / Years with AllianzGI Source: Allianz Global Investors, as of January For illustrative purposes only. 32

33 ESG Research team: Core activities ESG Research Intrinsic ESG Research and Ratings Proprietary SRI Ratings and Analysis Thematic ESG research Portfolio ESG analysis Ethical/ norms-based exclusion lists Stewardship: Proxy Voting Corporate Governance Guidelines & Proxy Voting Policy Analysis of shareholder meeting proposals and consultation with fundamental analysis and portfolio managers Pre-AGM discussions with companies Attendance at shareholder meetings, as necessary Public Policy Response to public policy consultations by regulators and policy-makers Participation in policy initiatives at market/regional and industry levels directly and via trade associations Influence market and industry practices through research publications and thought leadership pieces Promote AllianzGI views through public speaking engagements Stewardship: Engagement Pro-active engagement on corporate governance, environmental, social and business conduct issues Reactive engagement, including issuer consultations Supporting engagements by AllianzGI investment professionals Thematic engagement projects Collaborative engagements Source: Allianz Global Investors, For illustrative purposes only. 33

34 Stewardship: Engagement and Proxy Voting Active involvement from portfolio managers and sector analysts Provide feedback, raise issues and monitor progress Helps assess company leadership and culture and build trust Have a say in some aspects of how the company is run Improves governance standards across all portfolios Improves practices and companies risk profile Protects clients interests and holds boards and management accountable Enriches investment analysis and decision making Active investment strategies benefit from active stewardship Source: Allianz Global Investors, For illustrative purposes only. 34

35 Stewardship: Proxy Voting Activities 2016 overview At AllianzGI, we take our fiduciary obligation to be an active shareholder very seriously. We therefore exercise our voting rights: Global meetings: AllianzGI voted on 5,794 meetings of which 49% were voted against management with at least one vote Shareholder proposals: AllianzGI voted on 1,548 shareholders proposals of which we supported 53% in total 716 "Against" votes as share of category total 49% 5,794 meetings 51% In favor of management Against management with at least one vote 39% 61% Directors Related % 44% 32% 24% 34% 56% 68% 76% Other Environment & Social Routine Business "For" votes as share of category total Corporate Governance 97 32% 68% Compensation AllianzGI voted on 5,794 total meetings of which AllianzGI voted against management with at least one vote at 2,838. Allianz voted on 1,548 shareholder proposals Source: Allianz Global Investors, For illustrative purposes only. 35

36 Stewardship: Engagement Activities 2016 overview Consistent with our investment philosophy and approach, we routinely engage in dialogue with investee companies and seek to proactively present a viewpoint and seek change where necessary: Global engagements: AllianzGI engaged across the globe to seek positive change on 108 occasions covering 148 topics in total Engagement activity per topic: AllianzGI engaged with companies on 148 issues of which 62% were ESG-related. Corporate Governance topics make up 49% of all activities 26% 32% 7% 8% 6% 6% 108 engagements 7% 23% United Kingdom Germany Spain Switzerland United States Other 49% 8% 9% 14% 5% Transparency & Disclosure Business Conduct & Culture Strategy & Business Model Other Environmental Social Corporate Governance AllianzGI had 108 total engagement activities across 11 different industries in which 148 topics were covered. The category Other captures: Capital management, Risk management, Audit & accounting, Financial performance. Source: Allianz Global Investors, For illustrative purposes only. 36

37 Disclaimer Investing involves risk. The value of an investment and the income from it may fall as well as rise and investors might not get back the full amount invested. The volatility of fund unit prices may be increased or even strongly increased. Investment in fixed-income securities may entail various risks for investors including, but not limited to, credit status risk, interest-rate risk, liquidity risks and the risk of limited flexibility. Changes in the business environment and market conditions may affect these risks, with a negative impact on the value of the investments. In periods of rising nominal interest rates, the value of fixed-income securities (including short positions on fixed-income securities) is generally expected to fall. Conversely, in periods of falling nominal interest rates, the value of fixed-income securities is generally expected to rise. Liquidity risks may result in account pay-outs or paybacks being delayed or prevented. Allianz Green Bond is a sub-fund of Allianz Global Investors Fund SICAV, an open-ended investment company with variable share capital organised under the laws of Luxembourg. Past performance is not a reliable indicator of future results. If the currency in which the past performance is displayed differs from the currency of the country in which the investor resides, then the investor should be aware that due to the exchange rate fluctuations the performance shown may be higher or lower if converted into the investor s local currency. This is for information only and not to be construed as a solicitation or an invitation to make an offer, to conclude a contract, or to buy or sell any securities. The products or securities described herein may not be available for sale in all jurisdictions or to certain categories of investors. This is for distribution only as permitted by applicable law and in particular not available to residents and/or nationals of the USA. The investment opportunities described herein do not take into account the specific investment objectives, financial situation, knowledge, experience or specific needs of any particular person and are not guaranteed. The views and opinions expressed herein, which are subject to change without notice, are those of the issuer companies at the time of publication. The data used is derived from various sources, and assumed to be correct and reliable, but it has not been independently verified; its accuracy or completeness is not guaranteed and no liability is assumed for any direct or consequential losses arising from its use, unless caused by gross negligence or wilful misconduct. The conditions of any underlying offer or contract that may have been, or will be, made or concluded, shall prevail. For a free copy of the sales prospectus, incorporation documents, daily fund prices, key investor information, latest annual and semi-annual financial reports, contact the management company Allianz Global Investors GmbH in the fund s domicile, Luxembourg, or the issuer at the address indicated below or Please read these documents, which are solely binding, carefully before investing. This is a marketing communication issued by Allianz Global Investors GmbH, an investment company with limited liability, incorporated in Germany, with its registered office at Bockenheimer Landstrasse 42-44, Frankfurt/M, registered with the local court Frankfurt/M under HRB 9340, authorised by Bundesanstalt für Finanzdienstleistungsaufsicht ( The duplication, publication, or transmission of the contents, irrespective of the form, is not permitted. Internet: AllianzGIClientReporting@allianzgi.com Source: Allianz Global Investors; data as at

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