Axa launches short duration bond fund

Added 4th July 2016

Axa Investment Managers has launched an inflation-focused, short duration bond fund

Axa launches short duration bond fund

Managed by Jonathan Baltora, the Axa WF Global Inflation Short Duration Bonds Fund will follow a similar approach to the firm’s flagship global inflation bonds fund, but with a focus on instruments with a duration between zero and five years.

The fund is a Luxembourg-domiciled Sicav registered for distribution in Austria, Belgium, Denmark, France, Finland, Germany Italy, the Netherlands, Norway, Spain, Sweden and the UK, and Axa IM said it expects it to be available shortly in Switzerland.

The F share class has an annual management charge (AMC) of 0.3% which translates to an ongoing fund charge (OCF) of 0.47%, Axa said. 

Higher correlation

According to Axa, the fund’s shorter duration focus will provide for a higher correlation to realised inflation within a low interest rate environment. The firm said, it is also expected to demonstrate lower volatility than the wider market as a result of this shift in focus.

Baltora, who is supported by Marion Le Mordhedec, manager of the Axa WF Universal Inflation Bonds, said: “Long term inflation expectations tend to be anchored by central banks therefore short term fluctuations can create buying opportunities.

"Similarly the long end of the market could be considered a more crowded space due to demand created by pension funds looking for long dated linkers in order to match liabilities, again creating buying opportunities for short duration inflation linked bonds.”

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Geoff Candy

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Geoff Candy joined Portfolio Adviser as News Editor in May 2014. He has been a financial journalist and broadcaster since 2005 and, in that time has worked in both South Africa and the Netherlands, covering everything from high street retailers and construction companies to mining and insurance.

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