Want 5% income and long-term growth? This fund aims to deliver both.

• Allianz Global High Payout, which has paid out more than 5% over the past 12 months, is designed to provide regular monthly income while investing in global equities.

• Unlike traditional income funds that often trade off growth for yield, this fund invests in world-class companies with strong growth potential and converts both dividends and capital gains into a consistent, high payout.

• Designed to be market- and sector-neutral, the fund focuses on stock selection rather than aggressive market or sector bets.

• The fund has outperformed both the MSCI World Index and its peer average over a five-year period, while also providing better downside protection during the 2022 market downturn.

• Within an income-focused portfolio, the fund can complement traditional income assets such as bonds or REITs, helping to support overall yield while enhancing long-term return potential.

For many investors, the challenge with income-focused portfolios is simple: how do you get steady cash flow without sacrificing growth? Traditional dividend funds often force a trade-off, prioritising high payouts by investing in slow-growing, “boring” companies, which can limit capital appreciation over time.

Allianz Global High Payout takes a different approach. The fund, which has paid out more than 5% over the past 12 months (based on total dividends distributed), is designed to provide regular monthly income while investing in global equities. In this article, we take a closer look at how the fund aims to deliver both sustainable income and long-term capital growth.

Income without giving up growth

The Allianz Global High Payout Fund combines value, momentum, revision, and quality factors to identify companies with resilient business models, strong earnings potential, and attractive valuations. Rather than focusing solely on high-dividend stocks – which are defined by historical and expected dividend payments, along with total shareholder compensation including possible share buybacks – the fund also invests in world-class companies with strong growth potential.

It then converts dividends and capital gains into a consistent, high payout, allowing investors to enjoy regular income without capping upside or giving up exposure to growth sectors. While the fund previously used covered calls to enhance income, this exposure was steadily reduced from 2018 and capped at just 5%, before all options usage was officially discontinued in 2021. This shift reflects a clear intent to prioritise long-term capital growth alongside sustainable income.

This approach contrasts sharply with some peers in the global equity income space. Peer funds like the Allspring Global Enhanced Equity Income generates income using a strategy called “option writing” (selling covered calls) on market indices. Essentially, the fund earns steady income when market indices are flat or choppy. Conversely, if the indices surge, the options may lose value, which can drag down the fund’s total returns.

Similarly, other high-payout peers like the BlackRock Systematic Global Equity Income use a systematic approach to select stocks while selling index options to generate extra income. The Schroder ISF Global Dividend Maximiser, meanwhile, sells call options on individual stocks to generate income, which can limit the fund’s upside potential.

Table 1: Your cheat sheet to income funds

Fund Name	How it pays you	How it behaves	Yield
Allianz Global High Payout	Dividends and selling a slice of profit from growth stocks to fund your monthly payout	Prioritises long-term capital growth. Closely follows the market, with potential for outperformance	5.5%
Allspring Global Enhanced Equity	Dividends and income from call options on indices	If the entire market goes higher, the options will lose money, dragging down returns	5.5%
BlackRock Systematic Global Equity High Income	Dividends and income from call options on indices	If the entire market goes higher, the options will lose money, dragging down returns	7.4%
Schroder ISF Global Dividend Maximiser	Buys stocks and collects income from options on individual companies to squeeze out maximum yield	Upside is capped; prioritises high payouts over long-term growth	6.8%
Yield is based on total dividends paid out in the last 12 months

Follows the benchmark while still offering chance to outperform

Benchmarked to the MSCI World Index, which represents top companies across developed markets, the Allianz Global High Payout typically holds 150 to 350 stocks. Its largest holdings include mega tech names like Nvidia, Apple, and Microsoft, which contribute both stability and long-term growth potential (Table 2).

Table 2: Top 10 holdings

Company Name	Sector	Weight
NVIDIA	IT	6.3%
Apple	IT	5.7%
Microsoft	IT	5.0%
Alphabet (Class C)	Communication Services	3.0%
JPMorgan Chase	Financials	2.1%
Amazon	Consumer Discretionary	1.6%
Mastercard	Financials	1.6%
Johnson & Johnson	Healthcare	1.6%
Meta Platforms	Communication Services	1.5%
Lam Research	IT	1.3%
Source: Allianz Global Investors Data as of 31 December 2025

Another defining feature of the strategy is its focus on risk control. With a tracking error typically ranging between 2-4%, the fund remains market- and sector-neutral while still providing the opportunity to outperform. This shows that the manager is not trying to predict market or sector moves, but instead focuses on the stocks within the market.

Geographically, the fund stays largely aligned with the MSCI World Index, with a deviation of less than 4%. About 71% of the portfolio is allocated to the US, with the remaining 29% spread across other developed markets such as Japan and Europe (Figure 1).

The strong exposure to US equities reflects the unique strengths of the US market. America is home to many of the world’s most innovative and resilient companies, supported by deep capital markets, strong corporate governance, and a culture of shareholder value creation. Its leadership in areas such as technology, healthcare, and other forward-looking sectors continues to underpin long-term earnings growth. For income investors, this matters because sustainable payouts ultimately come from durable businesses with strong profitability and cash flows.

At the same time, diversification beyond a single market remains important. Exposure to Japan and Europe allows the fund to participate in different economic cycles, policy environments, and corporate reform stories, helping to smooth returns and reduce concentration risk.

Figure 1: Exposure to US and other DMs

Sector exposure is also closely aligned with the MSCI World Index, with allocations deviating by less than 4%. As shown in Figure 2, around 30% of the fund is allocated to Information Technology, approximately 3% above the benchmark. The fund maintains a meaningful 11% allocation to Healthcare, roughly 2% above the benchmark. Healthcare offers defensive characteristics alongside long-term structural growth, supported by ageing populations and rising healthcare demand.

In contrast, exposure to Financials is slightly lower at 15%, around 2% below the benchmark. This reflects a more cautious stance towards this dividend-paying sector, which can be more sensitive to economic cycles and interest rate swings.

Figure 2: Large allocations to IT, Healthcare, Financials

Track record of outperforming benchmark and peers

Performance ultimately tells you whether an investment philosophy works. Looking at the past five years, after the fund officially stopped using options in 2021, gives a clear picture of how its approach plays out. Over this period, the fund has outperformed both its benchmark and its peers. It delivered an annualised total return of 13.4%, comfortably ahead of the MSCI World Index at 11.7% and well above the peer average of 9.2%. Even across a three-year period, performance has been broadly in line with the benchmark and the Allspring Global Equity Enhanced Income Fund, while still outperforming all other peers.

Table 3: The fund boasts a strong long-term track record

Fund Name	1Y	3Y	5Y
Allianz Global High Payout AM USD	17.7%	18.7%	14.1%
MSCI World Index	12.8%	18.6%	12.4%
Allspring Global Equity Enhanced Income A Dis USD	20.3%	18.7%	11.9%
BlackRock Systematic Global Equity High Income A6 USD	5.7%	13.3%	8.3%
Schroder ISF Global Dividend Maximiser A Dis USD	17.4%	10.5%	9.0%
Fund Peer Average	14.5%	14.2%	9.7%
Returns more than one year have been annualised. In SGD terms. Source: Bloomberg Finance L.P., iFAST Compilation Data as of 31 January 2026

The real differentiator, however, shows up when markets turn volatile. In 2022, one of the toughest years for global equities in recent history, Allianz Global High Payout delivered a return of -11.9%. While negative, this represented meaningfully better downside protection than the benchmark and most peers, trailing only the Schroder ISF Global Dividend Maximiser Fund.

Table 4: Calendar year returns

Fund Name	2021	2022	2023	2024	2025
Allianz Global High Payout AM USD	26.1%	-11.9%	20.9%	19.6%	18.9%
MSCI World Index	24.8%	-18.2%	22.6%	23.6%	14.5%
Allspring Global Equity Enhanced Income A Dis USD	22.3%	-17.5%	15.8%	22.9%	21.2%
BlackRock Systematic Global Equity High Income A6 USD	19.3%	-15.4%	14.0%	21.0%	6.0%
Schroder ISF Global Dividend Maximiser A Dis USD	19.2%	-7.6%	13.3%	5.3%	17.5%
Fund Peer Average	20.3%	-13.5%	14.3%	16.4%	14.9%
Source: Bloomberg Finance L.P., iFAST Compilation. In SGD terms. Data as of 31 December 2025

At the same time, Allianz Global High Payout has consistently generated monthly income at an annualised yield significantly higher than the MSCI World Index, making it a compelling solution for investors seeking regular cash flow (Figure 3).

The fund manager has the flexibility to turn both dividends and capital gains into income, allowing payouts to be smoothed across different market conditions. While the income level is ultimately at the manager’s discretion, this flexibility gives the fund resilience.

Historically, the fund has often paid out more than 5%, though this is not a hard target. Instead, the objective is to deliver a yield that is consistently higher than the benchmark. This disciplined approach means the fund is not forced to over-distribute during weak markets or hold back when opportunities arise. This leads to a more sustainable income stream, while still protecting long-term capital.

Figure 3: Higher than market income payouts

The bottom line: A strong option for an income-focused portfolio

Taken together, these results highlight what Allianz Global High Payout does well. Over the long run, the fund has captured a meaningful share of equity upside. During neutral and bullish market conditions, it remains competitive with benchmark and peers. Crucially, when markets enter a downturn, the fund has shown to lose less, offering valuable downside protection for income-focused investors.

It is also important to be clear that the fund is market- and sector-neutral by design, with performance driven primarily by maximising exposure to stocks with attractive investment styles characteristics rather than big bets on regions or industries. This disciplined, bottom-up approach helps keep risk controlled and results more predictable across market cycles.

We believe the fund is well-suited for investors seeking regular income while still capturing long-term equity growth. Within an income-focused portfolio, it can complement traditional income assets such as bonds or REITs, helping to support overall yield while enhancing long-term return potential.

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This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.