Allianz Global Investors has launched a second trade finance fund, the Allianz Working Capital Investment Grade Fund, following the success of its original fund launched three years ago.
The new fund offers investors exposure to ultra short-term trade finance receivables with investment grade credit risk. This makes it suitable for a broad range of investors who have restricted their use of high yield rated investments, but see the benefit in the defensive nature of short-dated, diversified, trade finance investments.
Trade finance bridges the financing gap between the delivery of a product and payment. This allows suppliers to reduce days sales outstanding (DSO) and buyers to maximise days payable outstanding (DPO).
The fund aims to offer attractive yield and diversification benefits. The short interest rate duration allows resets to rising rates while short spread durations and a lack of any reliance on capital markets helps reduce volatility in case the credit cycle deteriorates.
David Newman, head of global high yield at Allianz Global Investors, said: “We are excited to launch this investment grade version of the existing fund.
We believe the characteristics it offers are particularly relevant to investors today in an environment of heightened geopolitical tensions, volatile bond yields and rising inflation.
In this environment, trade finance can offer the flexibility and potential returns to help investors navigate the uncertain outlook.”