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Allianz Annual Report 2013

Annual Report 2013    Allianz Group 55 C Group Management Report Your Allianz 49 Business Operations and Markets 56 Strategy and Steering 59 Progress in Sustainable Development Asset management market For the asset management industry as a whole, 2013 was a favorable year, although it was a further year of uncertainty in capital markets with volatility remaining at elevated levels. The announcement of the Federal Reserve in May that it would start to take a reduction of its assetpurchasesintoconsiderationledtoanincreaseininterest rates. The yield on 10-year U.S. government bonds increased from 1.6 % at the end of May 2013 to around 3 % at the end of the year. As a result of the interest rate increase, valuations for fixed income assets declined, while equities recorded a strong performance. On a global basis, equities rose by 29 % last year. Market flows into equity and fixed income strategies were par- ticularly strong in the first half of 2013. During the second half of the year, flows into traditional fixed income strategies were to a certain extent impacted by the rise in interest rates. Flows into both shorter- term and floating-rate strategies continued to be strong, while cer- tain investors found the higher yields presented new opportunities in longer-term strategies. Flows into equity assets, however, mostly continued throughout the year, reaching levels not observed in the recent past. Allianz’s Asset Management operations recorded strong inflows in areas such as non-traditional fixed income and multi-asset. The overall flow development, however, was impacted by the general market trend of outflows in the traditional bond space. Throughout 2013 both PIMCO and ­AllianzGI reflected market developments in their portfolio allocations and continued to deliver outstanding client service. From a strategic perspective, PIMCO as well as ­AllianzGI went ahead with the implementation of their longer- term development plans. In 2013, ­AllianzGI engaged in further com- plexity reduction by combining entities, while at the same time fur- ther expanding its product offerings, e.g. in the infrastructure debt space. PIMCO continues to focus on delivering returns and managing risk on behalf of clients across a growing range of investment solu- tions, and took additional steps with regard to their longer-term development plan to broaden its product offerings into such areas as the alternatives platform, income solutions, equities and ETFs.

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