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26 May 2010

Seung Minn achieves 1st decile performance on 3 year anniversary Stock picking is key to the manager’s outperformance against benchmark Seung Minn celebrates his third anniversary at the helm of the Allianz RCM US Equity Fund returning 24.7% against a benchmark of 11.9%*. The £72m OEIC Fund, which has recently been awarded an OBSR ‘A’ rating and a Trustnet Alpha rating has been top decile since its launch in April 2007*. Seung Minn, Fund manager of the Allianz RCM US Equity Fund comments: “The outlook for the US market is somewhat mixed. While recent manufacturing and retail sales reports point to a strengthening economic recovery, unemployment remains high and consumer confidence is low. Globally, the recovery is held back by concerns about monetary tightening in China and weakness in several European countries. Combining this backdrop with financial reform proposals, volatility has increased quite a bit in the US equity market. However, US companies continued to report strong earnings overall. “There were several positive takeaways from the first quarter’s earnings results. First, after cutting costs aggressively in 2009, many companies are showing positive operating leverage as volumes start to rise. Second, companies are returning capital back to shareholders through dividends and share repurchases. Lastly, management is talking more about business investment, which includes increasing CapEx and advertising spending as well as M&A activity. However, looking ahead, I believe it will become more and more challenging for the US companies to sustain the same level of top and bottom-line growth rates. “Looking back last 2 to 3 quarters, as a part of our normal bottom-up stock selection process, we have been taking profits aggressively from all winning and highly valued positions, and reallocating to more attractively valued positions. These stocks, in my view, happen to be more defensive, large cap stocks.” The Allianz RCM US Equity Fund uses a bottom-up stock picking approach which includes initial idea generation using screening, and fundamental research and equity valuation work. Stocks are screened according to their fit with a pre-determined investment criteria, which in turn, reflect the investment philosophy of investing in low-expectation, out-of-favour companies. *Source of performance figures Lipper mid to mid with net income reinvested to 30 April 2010. The Allianz RCM US Equity Fund is ranked 7/71 funds within the IMA North America sector. Seung Minn has managed the fund since 2007.

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