Cyan Reef is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. Cyan Reef is not compensated by the any third-party for the information published.

Allianz Global Water

Allianz Global Water

Instrument Profile

With less than 1% of the world water supply being drinking water, investing in clean water offers investors the opportunity to generate environmental, social and financial alpha at the same time. This active, ESG-aware fund focuses on companies that look to improve water supply, efficiency and quality, solving problems while supporting growth opportunities.

Opportunity

Impact

Allianz Global Water enables investors to take part in developing solutions for key environmental and social issues. Our investable universe is aligned with four of the UN Sustainable Development Goals (SDGs) and their underlying targets, facilitating the generation of environmental and social alpha.

High conviction – defensive growth

The strategy builds a high-conviction, sector and region agnostic portfolio of high quality stocks with exposure to the most stable and promising areas of the water industry. Through bottom-up stock selection, we identify companies with strong earnings prospects, attractive valuations, and low tail risks.

ESG integrated

We integrate environmental, social and corporate governance factors (ESG) into our decision-making process in order to mitigate tail risk and increase alpha potential. Weak scores are reviewed for materiality and effect on business operations. Companies with poor scores are targets for engagement.

Allianz Global Water strategy – offering environmental, social and financial alpha

The Allianz Global Water strategy invests in companies whose products and services improve water supply, water quality or water efficiency, helping to advance the sustainability of global water resources.

As the necessary investments in water infrastructure and technology are still yet to be made, the structural imbalance between water supply and demand continues to grow. Hence, water investment is now at the forefront of the global agenda, making it a particularly attractive investment theme.

Population growth and rising living standards, particularly in emerging markets, have resulted in increased demand for water. Food demand grows with population, and changes in diet have favoured protein rich foods with a higher water footprint.

Industrialisation and digitisation further intensify demand through the water cost of energy generation. Despite pressure, capital expenditure on the issue has been relatively low over the past decade. However, as social and environmental implications have reached a critical point, political support has increased. This, coupled with the development of new technologies such as smart water applications, has brought water investments into focus.

Information by the open sources of the instrument provider.

Investment Rationale

Environmental and social alpha

Allianz Global Water enables investors to take part in developing solutions for key environmental and social issues. Our investable universe is aligned with four of the UN Sustainable Development Goals (SDGs) and their underlying targets.

High conviction – defensive growth

The strategy builds a high-conviction, sector and region agnostic portfolio of high quality stocks with exposure to the most stable and promising areas of the water industry.

Through bottom-up stock selection, we identify companies with strong earnings prospects, attractive valuations, and low tail risks.

ESG aware

We integrate environmental, social and corporate governance factors (ESG) into our decision-making process in order to mitigate tail risk and increase alpha potential. Weak scores are reviewed for materiality and effect on business operations. Companies with poor scores are targets for engagement.

Water Crisis

  • 70% of available water is used for agriculture.
  • One hamburger takes 1,700 litres of water to produce.¹
  • Formally the world’s fourth largest lake, the Aral Sea, has been shrinking since the 1960s after the rivers that fed it were diverted by irrigation projects. By 1997, it had declined to 10% of its original size.
  • Utilities lose USD 9.6 billion p.a. on water leakage.²
  • Smart water networks can save utilities up to USD 12.5 billion p.a.

Opportunities

+ High return potential of stocks in the long run

+ Investments specifically in the water area

+ Broad diversification across numerous securities

+ Possible extra returns through single security analysis and active management

+ Potential currency gains with share classes not hedged against investor currency

Risks

– High volatility of stocks, losses possible. The volatility of fund unit prices may be strongly increased.

– Underperformance of the investment theme possible

– Limited participation in the yield potential of single securities

– Success of single security analysis and active management not guaranteed

– Potential currency losses with share classes not hedged against investor currency

Ways to Invest

Fund Objectives

The fund invests in the global equity markets with a strong focus on companies that are substantially engaged in the area of water resource management or improvement of the supply, efficiency or quality of water. The fund’s investment objective is to attain capital growth over the long term.

Type: SICAV
Geography: Broad Developed Markets
Sector: Diversified
Index Tracked: MSCI ACWI NR EUR

Ongoing Charges: 2.10%
Initial fee: £500
Investment Style: Mid-Cap Growth
Fund Size (AUM): EUR 387.08M

Data by the open sources of the instrument provider. Last update: Jan. 2021

MSCI Sustainability Score

A

Source: MSCI Inc.
Last update: Dec. 2020

Morningstar Sustainability Score

3/5

Source: Morningstar, Inc.
Last update: Dec. 2020

Rolling performance, as of Dec. 2020 (annualized):

1 Year: 5.15%

3 Years: 7.29%

5 Years: 6.07%

Data by the open sources of the instrument provider. Last update: Dec. 2020

Top 10 Holdings

Company

American Water Works Co Inc

Xylem Inc

Index Corp

Danaher Corp

Halma PLC

Tetra Tech Inc

Geberit AG-REG

Veolia Environment

Thermo Fisher Scientific Inc

Ecolab Inc

Weighting

7.57%

5.53%

5.51%

5.42%

4.90%

4.36%

4.19%

3.24%

3.14%

2.83%

Top portfolio holdings as of Dec. 2020 | Source: instrument provider.

Interested in this instrument?

Interested in this instrument?

Join the community

Subscribe to receive the latest analytics and materials on impact investing.

The information made available to you does not constitute the giving of investment advice or an offer to sell or the solicitation of an offer to buy any security of any enterprise in any jurisdiction. The securities listed above are not registered and will not be registered for sale in the United Sates and cannot be purchased by U.S. investors as the securities can only be purchased in jurisdictions where they have been registered for sale or where an exemption from registration applies. The offer, sale or delivery of the securities within the United States or to, or for the account or benefit of, U.S. Persons is not permitted except pursuant to an exemption from registration under U.S. securities laws, which may not be available; and the availability of the information through the website does not alter or change the persons eligible to purchase the security.

All information on this page is subject to Cyan Reef Terms & Conditions. The branding materials of the financial instruments displayed on this web-page are property of the respective instrument providers. Although the information provided was collected with due care, Cyan Reef does not and may not under any circumstances be responsible for the accuracy of the information provided hereby.

All content on cyanreef.com is for your general information and use only and is not intended to address your particular requirements. In particular, the content does not constitute any form of advice, recommendation, representation, endorsement or arrangement by Cyan Reef and is not intended to be relied upon by users in making (or refraining from making) any specific investment or other decisions.

The information made available to you does not constitute the giving of investment advice or an offer to sell or the solicitation of an offer to buy any security of any enterprise in any jurisdiction. The securities listed above are not registered and will not be registered for sale in the United Sates and cannot be purchased by U.S. investors as the securities can only be purchased in jurisdictions where they have been registered for sale or where an exemption from registration applies. The offer, sale or delivery of the securities within the United States or to, or for the account or benefit of, U.S. Persons is not permitted except pursuant to an exemption from registration under U.S. securities laws, which may not be available; and the availability of the information through the website does not alter or change the persons eligible to purchase the security.

All information on this page is subject to Cyan Reef Terms & Conditions. The branding materials of the financial instruments displayed on this web-page are property of the respective instrument providers. Although the information provided was collected with due care, Cyan Reef does not and may not under any circumstances be responsible for the accuracy of the information provided hereby.

All content on cyanreef.com is for your general information and use only and is not intended to address your particular requirements. In particular, the content does not constitute any form of advice, recommendation, representation, endorsement or arrangement by Cyan Reef and is not intended to be relied upon by users in making (or refraining from making) any specific investment or other decisions.

DIVE DEEPER INTO IMPACT INVESTING​

Dive Deeper into impact investing