AllianzGI Diversified Income & Convertible Fund Announces Revisions to the Fund’s Option Strategy
Allianz Global Investors U.S. LLC (“AllianzGI U.S.”), the investment manager of AllianzGI Diversified Income & Convertible
Fund (the “Fund”) (NYSE:ACV), announced today that the Fund’s Board of Trustees approved revisions to the Fund’s strategy of
writing (selling) covered call options on stocks held in its equity portfolio (the “Option Strategy”). The Fund’s objective is to
provide total return through a combination of current income and capital appreciation, while seeking to provide downside protection
against capital loss. Under normal market conditions, the Fund will seek to achieve its investment objective by investing in a
combination of convertible securities, debt and other income-producing instruments and common stocks and other equity
securities.
The Fund’s current Option Strategy is disclosed as follows:
The Fund expects to normally employ a strategy of writing (selling) covered call options on the stocks held
in its portfolio (the “Option Strategy”). It is expected that the Fund will ordinarily write call options on the individual stocks
held in its portfolio, and with respect to up to approximately 70% of the value of each position. The Fund initially intends to
write covered call options on approximately 50% of the Fund’s common stocks, but may write covered call options on approximately
30% to 80% of the Fund’s common stocks from time to time, depending on market conditions. The Fund’s use of the Option Strategy may
vary from time to time, depending on market conditions and other factors.
Effective immediately, the Fund’s Option Strategy and related disclosure is revised in its entirety as
follows:
The Fund expects to normally employ a strategy of writing (selling) covered call options on the stocks held
in its portfolio (the “Option Strategy”). The Fund will ordinarily write call options on the individual stocks held in its
portfolio, and with respect to up to approximately 70% of the value of each position. The Fund will normally write covered call
options on up to 80% of the Fund’s common stocks, with the percentage varying from time to time, depending on market conditions and
other factors. The Fund’s use of the Option Strategy may vary from time to time, depending on market conditions and other factors,
and the Fund may determine not to employ the Option Strategy at all during certain periods.
The change to the Option Strategy is intended to afford the Fund’s portfolio managers greater flexibility in managing the
strategy by decreasing the lower range of stocks in the Fund’s portfolio on which it will ordinarily write options from 30% to 0%,
and making clear that the Fund may determine not to employ the Option Strategy at all during certain periods.
Risks Associated with the Fund’s Option Strategy. The ability of the Fund to achieve current gains to support
Fund dividends is partially dependent on the successful implementation of its Option Strategy. There are several risks associated
with transactions in options on securities. For example, there are significant differences between the securities and options
markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its
objective. A decision as to whether, when and how to use options involves the exercise of skill and judgment, and even a
well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events. The Fund’s ability
to use options successfully will depend on the ability of AllianzGI U.S. to predict pertinent market movements, which cannot be
assured. As the writer of a covered call option, the Fund forgoes, during the option’s life, the opportunity to profit from
increases in the market value of the security covering the call option above the sum of the premium and the strike price of the
call, but has retained the risk of loss should the price of the underlying security decline. In other words, as the Fund writes
covered calls over more of its portfolio, the Fund’s ability to benefit from capital appreciation of its common stock holdings
becomes more limited. The Fund is a closed-end management investment company. There can be no assurance that the Fund will achieve
its stated objectives.
About Allianz Global Investors
Allianz Global Investors is a diversified active investment manager with a strong parent company and a culture of risk
management. With 25 offices worldwide, we provide global investment and research capabilities with consultative local delivery. We
have more than $583 billion in AUM for individuals, families and institutions worldwide and employ over 650 investment
professionals.
At Allianz Global Investors, we follow a two-word philosophy: Understand. Act. It describes how we look at the world and
how we behave. We aim to stand out as the investment partner our clients trust by listening closely to understand their challenges,
then acting decisively to provide them with solutions that meet their needs. (Data as of September 30, 2017)
Disclosures
AllianzGI U.S., an indirect, wholly-owned subsidiary of Allianz Asset Management of America L.P. serves as the Fund's investment
manager and is a member of Munich-based Allianz Group.
The Fund’s daily New York Stock Exchange closing market prices and net asset values per share as well as other information,
including portfolio statistics and performance is available at https://us.allianzgi.com/en-us/products-solutions/closed-end-funds or by calling the Fund’s shareholder
servicing agent at 800-254-5197.
Statements made in this release that look forward in time involve risks and uncertainties and are forward looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Such risks and uncertainties include, without
limitation, the adverse effect from a decline in the securities markets or a decline in a Fund’s performance, a general downturn in
the economy, competition from other companies, changes in government policy or regulation, inability to attract or retain key
employees, inability to implement its operating strategy and/or acquisition strategy, and unforeseen costs and effects related to
legal proceedings or investigations of governmental and self-regulatory organizations.
For Allianz Global Investors U.S. LLC
Financial Advisors, 800-926-4456
or
Shareholders, 800-254-5197
or
Media Relations:
Kelly Smith, 212-739-3505
Kelly.Smith@allianzgi.com
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