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Allianz Global Artificial Intelligence
May 2017
The dawn of a new era
The first fu
nd to give
investors in
access to
Europe
all sectors
in the AI se
gment 6
Summary
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Artificial intelligence (AI) is currently in a phase of rapid development.
AI is not just robotics; it covers every aspect of our lives.
Forecasts suggest that by 2025 the segment will be around 57 times bigger than it was in 2016. 1
Allianz Global Artificial Intelligence provides an opportunity to share in the potential of the booming market for artificial intelligence. Going beyond the broad-based technology index, investors can benefit from the earnings prospects of the businesses in the
segment that fund management considers most sustainable. 2
It‘s the year 2025
You use a driverless car to get to the office in the morning. Congestion is no longer a problem because, thanks to a digital
traffic management system linked directly to your car, detours
can be created for busy stretches when required, which means
no delays. Accidents are a thing of the past because there are no
more drivers at the wheel making unexpected manoeuvres, such
as changing lanes. Your car even finds a parking space for you,
which is, of course, optimised as far as possible to minimise the
walk, and parking itself is an automated standard procedure. You
no longer have to worry about the wheel rims.
It is winter and you are looking forward to getting back to your
nice warm home in the evening. Instead of leaving the heating
on all day and creating unnecessary expense, you can turn on
the heating just before you leave the office.
You do a quick bit of shopping on your way back home because
your friends have said they are coming round at short notice.
You do not have a shopping list with you, but your fridge sends
you a list of items that you can combine with your favourite recipes on your mobile phone so that you know straight away what
else you need to buy to ensure that the evening goes well.
Admittedly, no one can say with certainty right now whether the
future will be like that as early as 2025 or whether it will take a bit
longer. However, what can be said with certainty is that researchers, scientists and businesses around the world are currently
doing everything they can to bring to fruition technologies which
evolve independently, record data and learn from that data. In so
doing, many businesses will have a considerable impact on the
future, and their products will be used by us and future generations. Others will be less successful, but will nevertheless contribute to the learning process. Breakthroughs and progress in development are currently at unprecedented levels, and every day new
inventions come along that can make our lives easier or are already doing so.
The world is currently at a historic turning point. What if you
were to invest in it early on?3
The future is already here3
The development of artificial intelligence (AI) is undergoing a
rapid transition thanks to the Cloud, smartphones and the tremendous increase in computing and storage capacity. Due to
the enormous potential, the market for AI has boomed in recent
years, and there are huge prospects for growth in the future too.
According to estimates, the volume will rise from USD 643.7
million in 2016 to USD 36.8 billion in 2025, which is a 57-fold
Allianz Global Artificial Intelligence
Allianz Global Artificial Intelligence - the future has been here for a while
1
Artificial intelligence has
been constantly evolving
since the 1950s
In the early days, researchers began
developing computers, and hence artificial intelligence. The world’s first functioning computer was built by Konrad
Zuse in 1941. Since then, AI has been
constantly evolving, most notably resulting in the internet, which on the one
hand made the technology suitable for
everyday use, and on the other suddenly provided an abundance of information that formed the basis for subsequent development.
2
There has been a veritable
boom in development
since 2010
With the development of the Cloud,
the extensive use of smartphones
and the huge volume of data now
available (the volume of data has
grown by more than 50%4 a year
since 2010), the opportunities for
developing AI suddenly expanded
too. Greater computing power
brought about an evolutionary transition that catapulted AI into every
aspect of life.
increase.1 There are many ways in which this growth might happen. For example, the use of artificial intelligence in health care
can help to diagnose cancer at an early stage and with a higher
degree of accuracy. That improves many people’s chances of
being cured, and therefore has a direct impact on the economy.
Children and young people already communicate using their
smartphones as a matter of course. Adults use tailor-made
newsletters to do their shopping, and the use of robots for gardening and household tasks is also on the rise. Navigation devices
are now more or less taken for granted, and they pro-actively display alternative routes when traffic gets congested.
The transition to a new AI era is already underway.
3
Artificial intelligence capabilities could exceed those of
the human brain within the
next 30 years
The amount of data created in the
past two years is greater than the
total amount created in the previous
history of humankind.5 Evaluation
and analysis will increasingly be carried out by machines which are fast
and can learn and continue to develop independently. And they will do a
lot of this at very high speed. Consequently, AI could soon outperform
the capacity of the human brain.
More efficient processes and innovation - an engine for
growth
Artificial intelligence makes it possible to design leaner, and hence
more efficient, processes and to collect and evaluate information
more readily. At the same time, it is an engine for innovation. All
of this has long been the basis for growth, which is why some
researchers believe AI has the potential to double economic
growth by 20351, and investors can start building on this potential
right now.2
What is artificial intelligence? A simple model 4
Sector 1 Development of
senses
AI can develop and use senses. This
includes such things as facial recognition at airports, tone, word and language
recognition for songs, for example, and
the processing of images, conversation
and information exchange (Siri) via a
smartphone or the use of this information for driverless cars.
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Sector 2 Information
processing
AI can record detailed information,
analyse it and present it in an intelligible form. This is already being
used, for example, to analyse large
volumes of Excel data and output it
as easily understood text (e.g. sports
results), for customer dialogue on
websites and for health care diagnosis.
Sector 3 Intelligent
automation
AI does not have to remain in the
background; it can also be used proactively on machines, for example, in
high-precision work, operations, driverless vehicles, domestic robots, etc.
Allianz Global Artificial Intelligence
Allianz Global Artificial Intelligence - invest in the future today
1
The first fund to make the
broad potential of Artificial
Intelligence available to
investors6
Allianz Global Artificial Intelligence is
the first fund to give investors in Europe
access to all sectors in the AI segment.
It gives investors a flexible way of participating in developments in this area.
New trends are included in the portfolio at an early stage as a result of the
fund management team’s research and
expertise.2
2
Global research and technology specialists join forces to
identify the most attractive
businesses
More than 500 of Allianz Global Investors’ investment experts at the world’s
most important trading centres monitor
the markets, the businesses and how
they are evolving. They establish the
decision-making basis for the specialists
in the specific tech team, who in turn
have their own practical experience in
the IT sector as well as financial expertise, and hence have a sound basis on
which to select the most promising
businesses for Allianz Global Artificial
Intelligence.2
3
Promising companies and
strong demand - a good
starting position for
investors3
The market for businesses in the
artificial intelligence sector is growing
every day, and many products are
now ready for the market, while
others are in development and will be
launched in the near future. At the
same time, demand for products from
the artificial intelligence sector is very
high. With Allianz Global Artificial
Intelligence, you can capitalise on the
players with products that have a
future.
Allianz Global Artificial Intelligence - Investment in the
broad market for artificial intelligence2
cloud software practice management solutions for healthcare
practitioners. The fund also acquired Lendingtree7,8 from the fiIt is rapidly becoming clear that all aspects of our lives are affected nancial sector. Lendingtree is an innovative online loan broker and
offers additional online services.
by AI, and if we were confined to a particular sub-sector, such as
robotics, we would be unnecessarily limiting the opportunities.
9
Allianz Global Artificial Intelligence was set up for this reason. The The current portfolio - Overview
Figures in percent as at 30 April 2017
fund invests in all aspects of the very broad spectrum of artificial
intelligence. In doing so, we respect the need to stay in touch with Country allocation9
reality, and the investment specialists take great care to ensure
Japan
France
0,58
that the companies in which the fund invests follow sustainable
5,85
business models. Allianz Global Artificial Intelligence is the first
fund to make the broad scope of the artificial intelligence sector
available to investors.6
Rely on comprehensive research to exploit additional chances – an overview of the initial portfolio
Where the selection of stocks is concerned, investors benefit from
global research which examines the strategy and general
sustainability of the businesses. The next step is for members of
the specific tech team to assess which businesses and concepts
are of particular interest. Allianz Global Investors sees itself as a
long-term partner of promising businesses that have innovative
and sustainable business ideas.
The fund management already combined different sectors for the
fund’s initial portfolio. It acquired not only IT stocks, but also consumer goods producers and industrials. Tesla7,8, for example,
made up c. 6% of the portfolio at the end of April; this was the
fund’s largest holding. Criteo7,8, an online marketing specialist,
was another major investment. In the healthcare sector, the fund
management selected athenahealth7,8, a company which offers
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US
93,57
Sector allocation9
Health Care Financials
Industrials 1,94
1,71
Consumer 3,37
Discretionary
11,56
IT
81,43
Allianz Global Artificial Intelligence
Allianz Global Artificial Intelligence AT (H2-EUR)-EUR
Management Company
Allianz Global Investors GmbH, Frankfurt
Fund Manager
Allianz Global Investors U.S. LLC. - San
Francisco
ISIN
LU1548497772
Launch Date
31/3/2017
Fund Currency
EUR
Sales Load
10
5.0 %
Distribution
accumulating
All In Fee p.a.11
2.050 %
Total Expense Ratio (TER)
Not available until after the end of the first
financial year
Fiscal year end
30/9
Redemption
daily
Opportunities
+
+
+
+
+
12
High return potential of stocks in the long run
Investments specifically in the artificial intelligence area
Currency gains possible
Broad diversification across numerous securities
Possible extra returns through single security analysis and
active management
Risks
- High volatility of stocks, losses possible. The volatility of fund
unit prices may be strongly increased.
- Underperformance of the investment theme possible
- Currency losses possible
- Limited participation in the yield potential of single securities - Success of single security analysis and active management
not guaranteed
1
Source: Accenture and Frontier Economics, March 2017. 2 A performance of the strategy is not guaranteed and losses remain possible. 3 The statements contained herein may include
statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and
uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. We assume no obligation to update any
forward-looking statement. 4 Source: Accenture, Why Artificial Intelligence is the Future of Growth, 2016 5 Wirtschaftswoche Blog, Korker‘s Look @ IT, April 2015 6 Source: LuminAM,
competitors report, February 2017 7 This is no recommendation or solicitation to buy or sell any particular security. 8 A security mentioned as example above will not necessarily be
comprised in the portfolio by the time this document is disclosed or at any other subsequent date. 9 This is for guidance only and not indicative of future allocation. 10 If the acquisition of
Fund units is subject to a sales charge, up to 100% of such sales charge may be collected by the distributor; the exact amount shall be mentioned by the distributor as part of the investment advisory process. This also applies to any payment by the Management Company of an ongoing distri-bution fee from the all-in fee to the distributor. 11 The all-in fee comprises
the charges so far included in the management, administration and sales fees. Any payment of a trail fee by the management company to the distribution partner will be made from the
all-in fee. 12 TER (Total Expense Ratio): Total cost (except transaction costs) charged to the fund during the last financial year.
Investing involves risk. The value of an investment and the income from it may fall as well as rise and investors might not get back the full
amount invested.
Allianz Global Artificial Intelligence is a sub-fund of Allianz Global Investors Fund SICAV, an open-ended investment company with variable share capital organised under the laws of
Luxembourg. The value of the shares which belong to the Share Classes of the Sub-Fund that are denominated in the base currency may be subject to an increased volatility. The
volatility of other Share Classes may be different and possibly higher. Past performance is not a reliable indicator of future results. If the currency in which the past performance is
displayed differs from the currency of the country in which the investor resides, then the investor should be aware that due to the exchange rate fluctuations the performance shown
may be higher or lower if converted into the investor’s local currency. This is for information only and not to be construed as a solicitation or an invitation to make an offer, to conclude a
contract, or to buy or sell any securities. The products or securities described herein may not be available for sale in all jurisdictions or to certain categories of investors. This is for
distribution only as permitted by applicable law and in particular not available to residents and/or nationals of the USA. The investment opportunities described herein do not take into
account the specific investment objectives, financial situation, knowledge, experience or specific needs of any particular person and are not guaranteed. The views and opinions
expressed herein, which are subject to change without notice, are those of the issuer companies at the time of publication. The data used is derived from various sources, and
assumed to be correct and reliable, but it has not been independently verified; its accuracy or completeness is not guaranteed and no liability is assumed for any direct or
consequential losses arising from its use, unless caused by gross negligence or wilful misconduct. The conditions of any underlying offer or contract that may have been, or will be,
made or concluded, shall prevail. For a free copy of the sales prospectus, incorporation documents, daily fund prices, key investor information, latest annual and semi-annual financial
reports, contact the management company Allianz Global Investors GmbH in the fund's country of domicile, Luxembourg, or the issuer at the address indicated below or www.allianzgiregulatory.eu. Please read these documents, which are solely binding, carefully before investing. This is a marketing communication issued by Allianz Global Investors GmbH,
www.allianzgi.com, an investment company with limited liability, incorporated in Germany, with its registered office at Bockenheimer Landstrasse 42-44, 60323 Frankfurt/M, registered
with the local court Frankfurt/M under HRB 9340, authorised by Bundesanstalt für Finanzdienstleistungsaufsicht (www.bafin.de). The duplication, publication, or
transmission of the contents, irrespective of the form, is not permitted. This statement does not comply with all legal requirements aimed at ensuring that investment
recommendations and investment strategy recommendations are not biased and is not subject to any trade restrictions ahead of the publication of such recommendations.
Allianz Global Investors, April 2017
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