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Just Add Water 

Just Add Water 

AllianzGI Global Water Fund 

 

Investing in companies that are developing technologies to improve the supply, efficiency and quality of water is a growth opportunity. Here's how to tap its potential.
Why water
Fresh water has no substitute—and only a fraction of today's supply is safe for consumption. Given a fast-growing world population, the massive urbanization of developing nations and poor infrastructure in developed countries, the need for water is set to grow exponentially. Because of this global supply/demand imbalance, water is increasingly being viewed as a core commodity that could be as profitable as oil.

A Flood of Opportunity
Water is currently a $500-billion market that could grow to as much as $1 trillion by 2020.¹
Investments are needed along the entire water chain; water-infrastructure projects alone are expected to see annual growth of 5%-8%.¹
Companies that focus on addressing the increasing demand for and limited supply of water could represent some of the world's key growth opportunities today—and in the coming years.

H2O: The Way to Grow
 
S&P Global Water chart
A hypothetical $1,000 investment in the S&P Global Water Index at inception
(11/16/2001) would have grown more than 290%—far outpacing broader stock-market indexes.
Source: Morningstar Direct. Data as of 9/30/13. Past performance is no guarantee of future results.

11/2001- 9/2013 Annualized Returns
S&P Global Water 12.23%
MSCI World Growth 5.63%
S&P 500 5.39%

The information above does not represent Allianz Fund performance. Please click here for information concerning the AllianzGI Global Water Fund's performance and investment process.
Why now
Global water demand will be pushed 40% beyond accessible, reliable supplies by 2030 unless significant headway is made toward resolving the global water crisis.²

Areas of Development:
We have identified three main areas where governments and private corporations will have to devote substantial resources to help solve the growing water challenge. Each one provides a range of attractive water-related investment opportunities.

Use the sliding displays below to explore each investment opportunity.

Expanding the water supply

  • WHY?


    1.1 billion people have inadequate access to water.³
  • SOLUTION

    Develop new water infrastructure to create a sustainable, reliable and cost-efficient supply system for developed and developing nations
  • OPPORTUNITY • Exploration costs, engineering and design
    • Well drilling
    • Runoff water-capturing facilities
    • Pumping stations and pipelines
    • Desalination equipment
    • Wastewater treatment plants for reuse or discharge
    • Construction materials
Increasing water-supply efficiency

  • WHY?


    32 billion cubic meters of treated water is leaked from water-supply systems every day4
  • SOLUTION

    Create effective solutions to reduce demand, lessen the need for capital-intensive solutions and promote sustainable use of available resources
  • OPPORTUNITY
    • Irrigation equipment to prevent evaporation of water in farming
    • Meters to stop waste
    • Drought-resistant crops or fertilizers
    • Automation controls
    • Leakage detection
Improving water quality

  • WHY?


    80% of China's rivers are too toxic for fish—let alone human consumption5
  • SOLUTION


    Increase regulations on drinking-water quality and establish minimum levels of treatment
  • OPPORTUNITY
    • Filtration
    • Monitoring and testing
    • Disinfection chemicals
    • Sanitary appliances
    • Wastewater technology
Why AllianzGI Global Water Fund
The team invests in companies facing the challenges of the increasing demand for—and limited supply of—clean water. You can't invest directly in water, so the portfolio managers invest in companies that are active in water management in sectors like industrials, utilities, construction, building materials, technology and chemicals. The portfolio managers typically aim to construct a concentrated portfolio of 25 to 50 stocks of high-quality companies with unique positions within the water-supply chain.

How this strategy can fit in a portfolio
Stable, predictable growth potential in a low-growth environment. Water demand is a long-term secular growth story, generally unaffected by economic conditions, political developments or changing consumer preferences.
A long-term, and potentially less-volatile play on growth in emerging-market economies. Water-infrastructure investment is a necessity for growth-related activities: generating electricity, growing agriculture, raising livestock, manufacturing and mining.
Access to active management. The fund's active-management approach can be forward-looking, and can take a strategic view of the issues facing and shaping the industry—providing opportunities that passive indexing may not. Of course, passive investing may involve lower fees and expenses, and it is possible for active portfolio managers to negatively affect portfolio performance with their stock selections.

Get Started
Investors looking to capitalize on the water challenge may want to consider AllianzGI Global Water Fund, which seeks long-term capital appreciation from equity securities of water-related companies worldwide that have unique positions in the water-supply chain.

Institutional Investors should contact their Client Service Team regarding opportunities in this strategy.
Individual investors can take advantage of the AllianzGI Global Water Fund.

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Investors should consider the investment objectives, risks, charges and expenses of any mutual fund carefully before investing. This and other information is contained in the fund’s prospectus and summary prospectus, which may be obtained by contacting your financial advisor. Click here for a complete list of the Allianz Funds prospectuses and summary prospectuses. Please read them carefully before you invest.


A Word About Risk: Investing in a limited number of issuers or sectors may increase risk and volatility. Investing in the water-related resource sector may be significantly affected by events relating to international political and economic developments, water conservation, the success of exploration projects, commodity prices and tax and other government regulations. Foreign markets may be more volatile, less liquid, less transparent and subject to less oversight, and values may fluctuate with currency exchange rates; these risks may be greater in emerging markets. Derivative prices depend on the performance of an underlying asset; derivatives carry market, credit and liquidity risk.

1 BofA Merrill Lynch
2 2030 Water Resources Group
3 World Health Organization
4 World Bank
5 UNDP Human Development Report; Beyond scarcity: Power, poverty and the global water crisis, Nov. 9, 2006
6 WaterFootprint Network
7 United Nations
8 World Economic Forum

Source for Morningstar information: Morningstar Inc. For funds with at least a three-year history, Morningstar calculates a risk-adjusted return measure that accounts for variation in a fund’s monthly performance (including the effects of all sales charges), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receives a rating of 5 stars; the next 22.5% 4 stars; the next 35% 3 stars; the next 22.5% 2 stars; and the bottom 10% 1 star. In the Natural Resources category, AllianzGI Global Water Fund Class I Shares received 5 stars/125 funds (3 years), 5 stars/107 funds (5 years). Class A Shares received 4 stars/125 funds (3 years), 4 stars/107 funds (5 years). Other share classes have different ratings. ©2013 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Unless otherwise noted, index returns reflect the reinvestment of income dividends and capital gains, if any, but do not reflect fees, brokerage commissions or other expenses of investing. It is not possible to invest directly in an index.

The Standard & Poor's Global Water Index is comprised of 50 of the largest publicly traded companies in water-related businesses that meet specific invest ability requirements. The Index is designed to provide liquid exposure to the leading publicly-listed companies in the global water industry, from both developed markets and emerging markets. The Standard & Poor’s 500 Composite Index (S&P 500) is an unmanaged index that is generally representative of the U.S. stock market. The MSCI World Index is a free float adjusted market capitalization index that is designed to measure global developed market equity. The MSCI World Growth Index measures the performance of those MSCI World companies with higher price-to-book ratios and higher forecasted growth values.

Allianz Global Investors Distributors LLC, 1633 Broadway, New York NY, 10019-7585, us.allianzgi.com, 1-800-926-4456.

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Did you know?

Farming accounts for 71% of global water consumption. Consider how much water it takes to produce one pound of:
Chicken = approx. 450 gallons
Beef = approx. 1,850 gallons
Coffee = approx. 2,250 gallons6
By 2050, the world’s population is expected to grow by three billion people90% of whom will live in developing nations that are already experiencing water stress.7
Producing one gallon of ethanol requires almost 3,000 gallons of water.8
Global demand in 2030 will exceed currently available water supplies by 40%


AWTAX


Morningstar Overall RatingSM

For Class A shares among 133 funds in the Natural Resources category as of 3/31/2014. Morningstar measures risk-adjusted returns. The overall rating is a weighted average based on the 3-, 5- and 10-year star ratings


AWTIX


Morningstar Overall RatingSM

For Class I shares among 133 funds in the Natural Resources category as of 3/31/2014. Morningstar measures risk-adjusted returns. The overall rating is a weighted average based on the 3-, 5- and 10-year star ratings
Mutual Funds 
AGI-2013-06-13-7086 

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