Allianz Income and Growth Fund: Yield and Risks in 2025

Anyone scrolling through r/singaporefi has seen the posts: is monthly dividend income really that simple? The Allianz Income and Growth Fund is one of the most discussed funds in Singapore retirement circles, promising regular monthly payouts while holding a mix of US and Canadian equities and bonds — but the real question is whether those distributions can hold up over time, and at what cost to your capital.

Current NAV (AM USD): $8.5862 (May 24, 2025) ·
Dividend yield (12-month): ~5.8% (USD share class) ·
Fund inception: February 4, 2013 ·
Fund size: ~$4.5 billion USD ·
Expense ratio (AM USD): 1.10% annually

Here are the key specifications for the AM USD share class.

What is the Allianz Income and Growth Fund?

How the fund invests

• Equity instruments from US and Canadian issuers
• High-yield corporate bonds (below investment grade)
• Convertible bonds that can be converted into equity
• A mix designed to generate both capital growth and regular income (AllianzGI Luxembourg factsheet)

The fund’s investment objective is to attain capital growth and regular income over the long term, according to the AllianzGI Luxembourg factsheet. It focuses on US and Canadian markets, investing in a combination of equities, high-yield bonds, and convertible bonds. The high-yield component means the fund holds debt from companies with lower credit ratings, which offers higher income potential but comes with greater default risk.

The Singapore product highlights state the fund is not capital guaranteed (Allianz Global Investors Singapore PHS). This means investors can lose principal, especially during market downturns.

Who manages the fund

• Managed by Allianz Global Investors GmbH, part of the Allianz Group
• One of the world’s largest asset managers with over €500 billion in assets under management
• Fund is domiciled in Luxembourg and recognised for sale in Singapore and Hong Kong

The fund is a sub-fund of Allianz Global Investors, a global asset manager with decades of experience in fixed income and equity markets. The Luxembourg domicile means the fund is regulated by the CSSF (Commission de Surveillance du Secteur Financier), which provides a standard level of investor protection for a UCITS fund.

The pattern: this fund prioritizes income over capital preservation, a tradeoff that shapes its role in a portfolio.

What is the dividend yield of the Allianz Income and Growth Fund?

Dividend yield history for the AM USD share class

• Morningstar Asia reports a dividend yield of 7.68% as of 31 Oct 2025 (Morningstar Asia)
• Endowus Singapore shows a distribution figure of 7.44% and a yield figure of 4.81% for the same fund listing (Endowus Singapore)
• A historical yield of 5–6% is commonly cited for the AM USD share class over the longer term

The dividend yield varies depending on the data source and the time period measured. The 7.68% figure from Morningstar Asia reflects a recent trailing 12-month period, while the 4.81% from Endowus Singapore may reflect a different calculation methodology. The gap between these figures is a reminder that yield is not a fixed number — it moves with the fund’s NAV and distribution policy.

How the fund pays dividends

• Dividends are paid monthly for share classes with “M” or “Mg” in their name (AllianzGI Singapore PHS)
• Distributions can come from both income and capital
• The Hong Kong product page warns that distributions paid out of capital may reduce the Fund’s NAV and capital available for future growth (AllianzGI Hong Kong)

The AllianzGI Singapore PHS confirms that the distribution date shall generally be on the 15th of each month for monthly distributing share classes. The fact that dividends can be paid from capital is a critical detail: a high yield that includes a return of capital is not the same as a yield generated purely from investment income.

What this means: yield figures alone don’t tell the full story—investors must consider the source of the payout.

What are the risks of the Allianz Income and Growth Fund?

Credit risk from high-yield bonds

• High-yield bonds involve greater risk of default than investment-grade bonds
• The Hong Kong product page warns that equities, high-yield bonds, and convertible bonds may be subject to volatility and loss risks (AllianzGI Hong Kong)
• During economic downturns, default rates on high-yield debt can spike sharply

The fund’s core holding is high-yield corporate bonds — debt issued by companies with below-investment-grade credit ratings. These bonds offer higher interest payments to compensate for the elevated risk that the issuer might default. In a recession, default rates can climb, and the fund’s NAV can take a direct hit.

Interest rate risk

• Rising interest rates cause bond prices to fall, which reduces the fund’s NAV
• The fund’s high-yield bonds have longer durations, making them more sensitive to rate changes
• The 2022-2023 period showed how rate hikes pressured high-yield bond funds (AllianzGI Hong Kong)

When central banks raise interest rates, existing bonds with lower coupon rates become less attractive, and their prices fall. The fund’s high-yield portfolio is not immune to this dynamic. The 2022-2023 rate hiking cycle by the Federal Reserve demonstrated how quickly bond prices can adjust.

Currency risk (for non-USD investors)

• Non-USD investors face currency exchange rate volatility between SGD and USD
• The Singapore-recognised share class AMi (H2-SGD) is hedged to SGD (AllianzGI Singapore)
• Hedging reduces but does not eliminate currency risk, and adds cost

For Singapore investors, the choice between the unhedged AM USD class and the SGD-hedged H2-SGD class matters. The hedged class aims to reduce the impact of SGD/USD fluctuations, but the hedging itself carries costs that eat into returns. Over the long term, currency movements can add or subtract several percentage points from annual returns.

Capital loss risk

• The fund is not capital guaranteed — investors can lose principal (AllianzGI Singapore PHS)
• The fund uses leverage to enhance returns, which amplifies both gains and losses
• Distributions paid out of capital reduce NAV and future growth potential (AllianzGI Hong Kong)

The fund’s use of leverage means that both gains and losses are magnified. In a rising market, this can boost returns. In a downturn, it accelerates losses. Combined with the possibility that dividends are partially a return of capital, investors could experience a scenario where they receive steady payouts while the underlying value of their investment erodes.

The implication: risk management is essential—this fund is not a set-and-forget income solution.

Is the Allianz Income and Growth Fund a good fit for retirement?

Income generation in retirement

• Monthly dividends can supplement retirement income from CPF Life or other sources
• Yield of 5-7% is significantly higher than Singapore savings accounts or CPF Ordinary Account
• But the fund’s value can decline significantly in a market downturn (AllianzGI Singapore PHS)

For retirees seeking regular cash flow, the monthly dividend schedule is appealing. The AllianzGI Singapore page confirms that the Singapore-recognised share class distributes monthly. However, a retiree drawing down income from this fund during a market downturn faces a double hit: the NAV drops, and the dividend may be cut if the fund’s income falls.

Volatility and drawdown risk

• High-yield bonds and equities can both fall sharply in a crisis
• During the COVID-19 crash in 2020, high-yield bond spreads widened dramatically
• Retirees with short time horizons (under 5 years) face sequence-of-returns risk

Sequence-of-returns risk is the danger that early withdrawals during a market downturn lock in losses. For a retiree who needs to sell units to fund living expenses, a 20% drop in NAV means selling more units to get the same cash amount, leaving fewer units to recover when the market rebounds.

Suitability for Singapore investors (CPF, SRS)

• The fund is available through CPF Investment Scheme (CPFIS) for eligible members
• Investors using SRS (Supplementary Retirement Scheme) should consider tax implications
• Currency risk between SGD and USD adds another layer of complexity for Singapore investors

The FSM Global factsheet shows the fund’s CPF risk classification, confirming it can be used within the CPF Investment Scheme. But using CPF savings to invest in a high-yield bond fund means trading the risk-free 4.08% CPF Special Account return for a variable return that could be lower or negative in any given year.

The pattern: suitability hinges on time horizon and risk capacity—not just yield.

How does the Allianz Income and Growth Fund compare to other growth and income funds?

Comparison against a global multi-asset fund

• The Allianz fund focuses on US/Canada, while a global multi-asset fund diversifies across regions
• Its high-yield bond allocation gives it a higher yield than most balanced funds
• But regional concentration adds risk that a global fund would avoid

A typical global multi-asset fund might hold a mix of global equities, investment-grade bonds, and some alternative assets. The Allianz fund’s yield is generally higher, but that yield comes from accepting lower credit quality and regional concentration. The trade-off is simple: higher yield now versus broader diversification for the long run.

Comparison against a Singapore-based REIT fund

• Singapore REITs offer yields in the 4-6% range with local currency exposure
• REITs are generally less correlated with US interest rates than high-yield bonds
• But REITs carry their own risks: property market cycles, rental income volatility, and gearing levels

For a Singapore investor choosing between the Allianz Income and Growth Fund and a local REIT fund, the Allianz fund offers higher yield potential but with US dollar exposure and credit risk. A REIT fund provides SGD-denominated income and a different risk profile tied to property markets rather than corporate credit. Neither is categorically better — the right choice depends on what else is in the investor’s portfolio.

The takeaway: comparative analysis should guide allocation decisions, not yield alone.

Seven key specs, one pattern: the fund is designed for yield, not for capital preservation. Every metric points to income generation as the primary objective.

The implication: the expense ratio of 1.10% for the AM USD class is above average for a bond fund but not unusual for an actively managed multi-asset fund. The Hong Kong AllianzGI Hong Kong page lists a total expense ratio of 1.55% and management fee of 1.5% for the USD distributing class, which is at the higher end of the range.

The Allianz Income and Growth Fund delivers what it promises: a monthly dividend from a mix of US and Canadian equities, high-yield bonds, and convertibles. That yield — ranging from roughly 4% to 7.7% depending on period and share class — is genuine and has been sustained since the fund’s launch in 2013. But the yield is not free money. It comes with credit risk, interest rate sensitivity, currency exposure, and the possibility that part of the dividend is simply your own capital being returned to you.

For the Singapore investor considering this fund for retirement income, the decision hinges on one question: can you stomach the volatility? If your portfolio is large enough that a 20% drawdown doesn’t change your lifestyle, and your time horizon is 10 years or more, the monthly income can be a useful supplement. But if you’re close to retirement and relying on this fund for essential expenses, the risk of capital loss at the wrong moment is too high. For the retiring Singapore investor, the choice is clear: use this fund as a complement to CPF Life and a diversified bond ladder, not as a replacement for either.