The fund, which is managed by the group’s head of European high yield, Andrew Wilmont, invests primarily in short-dated euro and sterling denominated high yield corporate bonds.
The average duration of bonds within the fund has been set at less than two years, and the annual returns target is 5-6% net of fees in current market conditions.
By investing in short duration bonds, Axa hopes to avoid exposure to the impact of rising interest rates.
Axa said: “High yield is by nature a short duration asset class, which provides increased protection against interest rate risks, so by focusing specifically on the shorter duration segment of the market, this effect will be further enhanced.”
Wilmont said: “Short duration high yield bonds are a powerful tool for portfolio diversification due to their low correlation with other asset classes, including other fixed income asset classes.
“This fund will tap into the €171.5bn [$240bn] European high yield market, where we are seeing some excellent opportunities."
The Luxembourg-domiciled fund is Ucits compliant and has a minimum investment level of €5,000. Axa IM says it is considering registration of the fund in several countries across Europe. The firm has over €10bn in short duration assets under management globally.
