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17 October 2011

Allianz Global Investors Fund manager, Thorsten Winkelmann, marks the first anniversary of his stewardship of the Allianz RCM Continental Europe Fund by comfortably outperforming the benchmark with the Fund falling just 4.2% compared to a 13.1% fall in the benchmark*. This outperformance reinforces his continued belief in focussing on stockpicking. Winkelmann took over management of the fund in October 2010 and has since seen the Fund consistently outperform the index throughout a sustained period of market volatility. This performance reinforces the team�s belief in its strict bottom-up investment process, said to be based on conviction, not convention and assisted by the research of management company, RCM. The Fund, which aims to provide investors with long term capital growth by investing in a diversified portfolio of investments in Continental European companies, predominantly focuses on larger capital stocks and it is this strategy of stock-picking that has generated growth opportunities amidst the significant market turmoil of the past 12 months. Commenting on the continued investment case for Europe on the anniversary of his takeover, Thorsten Winkelmann: �Equities should be one of the most prominent asset classes to consider given the fact we are living in a low growth environment with the looming prospect of rising inflation and interest rates � but the challenge is finding the right stocks. Because economic growth rates are not as high as in the past decade a lot of companies across the region will find it harder to grow. This means that now is the time for emphasis to be placed on having the right stock picking approach. It�s also important not to get misled by short term sentiment and volatility. The focus needs to be on the underlying businesses of the companies and any longer term trends. It is more important to look at those with structural growth potential rather than stocks that are heavily dependent on the state of the economy. �We look for companies that are one of the market leaders in a specific niche and with defendable positions. Companies enjoying strong growth will always face new competitors so it�s important the barriers to entry are high and that they have pricing power.� Why invest in European equities? �Europe is home to globally active companies that not only make money in their home markets but across the world. In fact there are plenty of leading edge technology companies that are profiting from global growth. Valuations are at an historic low compared to other international stock markets. We�ve been having some intense debates over issues such as the stability of the euro, and how they will influence sentiment. That�s why it doesn�t make sense to invest with an investment horizon of a few months; it ideally needs to be three to five years. �Regardless of how I feel about the macro picture, just looking at how our philosophy for stock picking is working means that I don�t fear the outlook. I concentrate totally on the strength and abilities of companies to cope with such situations. When markets are volatile and sentiment is at its worst, people should concentrate on what is likely to be the real economic impact on some of the companies over the mid to longer term. Our focus is to concentrate on those companies that are able to grow their earnings and cash flows.� *Source: Lipper, 30/09/2010 to 30/09/2011, Benchmark, FTSEurofirst300 ex UK TR

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