- AXA Investment Managers (AXA IM) has launched the AXA WF Euro Inflation Plus fund that aims to outperform the Euro area inflation using flexible allocation between nominal and inflation linked bonds, and active breakeven management.
- The new fund is managed by Jonathan Baltora, Head Of Sovereign, Inflation And FX, and the wider Inflation Team at AXA IM.
AXA Investment Managers (AXA IM) announces the launch of the the AXA WF Euro Inflation Plus fund that aims to outperform the Euro area inflation. The fund manager will use a fexible allocation between nominal and inflation linked bonds and active breakeven management. The fund is actively managed and doesn’t have a traditional bond benchmark, instead its performance will be measured against the Harmonised Indices of Consumer Prices Excluding Tobacco as published by Eurostat.
The Sub-Fund of the Luxembourg-domiciled SICAV aims to deliver performance in both bull and bear markets. In the event of accelerated/increased inflation, the fund manager might opt for short maturities inflation linked bonds as well as long inflation breakevens strategies. In the event of a slowdown in inflation, the strategy could invest up to 100% of its assets in fixed rate bonds and could also go short on inflation breakevens.
The fund can invest in sovereign nominal bonds as well as corporate bonds (with a limit of 20% of the Net Asset Value (NAV)). It can also leverage opportunities in emerging markets provided that these are OECD members. The fund will only invest in Investment Grade fixed income assets. Exposure to those markets can be hedged or not against inflation by using zero coupon inflation swaps at the management team’s discretion
The investment strategy is based on three pillars:
A discretionary approach to inflation strategies, A flexible allocation between nominal and linkers, A broader asset allocation and income generation: exploiting opportunities in other investment grade fixed income markets.
The Fund has been categorised as an Article 8 product according to the EU Sustainable Finance Disclosure Regulation (SFDR) level 1. On top of AXA IM’s exclusion policies [1], the Fund will aim to outperform the ESG score [2] of a parallel comparison portfolio constituted of 80% Bloomberg Barclays World Govt Inflation-Linked All Maturities 1-5yr and 20% ICE BofA 1-5 Year Global Corporate Index.
Commenting on the launch, Jonathan Baltora, Head Of Sovereign, Inflation and FX and manager of the AXA WF Euro Inflation Plus fund said: “We believe there is a high probability that the Euro area inflation will remain well above the level of nominal interest rates. As such, it becomes more and more difficult for European investors to find assets that yield at least the inflation rate while remaining in the Investment Grade universe. In that context, a product that aims to outperform the Euro area inflation is a particularly attractive value proposition.”
“Addtionally, the fact that the Fund can short inflation breakevens and targets a higher ESG rating than investment universe are true innovations in inflation strategies currently being offered in the market”.
The fund is registered and available to professional and retail investors in Belgium.
About Jonathan Baltora
Jonathan is the Head of the Sovereign, Inflation & FX team in Paris and Senior Portfolio Manager within our Fixed Income platform.
He joined AXA IM in 2010 as a Portfolio Manager for European and Global Inflation-linked bonds portfolios. He has been managing the inflation portfolios since he joined. In his current role, he is responsible for coordinating the investment process for inflation strategies as well as managing inflation-linked bond portfolios.
Prior to joining AXA IM, Jonathan worked for four years at Groupama Asset Management where he began his career as a Portfolio Manager, responsible for managing inflation-linked and aggregate portfolios.
Jonathan holds a Master’s degree in Economics as well as a Magistère in Finance, both from the University Paris I Pantheon-Sorbonne.
Risks
Risk of capital loss: The fund invests in financial markets and uses techniques and instruments subject to variations that can lead to gains and losses.
Inflation-Linked bonds risk: Inflation-linked bonds are special types of indexed bonds that are tied to indices that are calculated based on the rates of inflation for prior periods. The value of inflation-linked bonds generally fluctuates in response to changes in real interest rates. The market for inflation-linked bonds may be less developed or liquid, and more volatile, than certain other securities markets.
Derivatives and leverage risk: These instruments are volatile and may be subject to various types of risks, including but not limited to market risk, liquidity risk, credit risk, counterparty risk, legal risk and operations risks.
Emerging markets: Some of the securities held in the concerned Sub-Fund may involve a greater degree of risk than generally associated with similar investments in major securities markets, due, in particular, to political and regulatory factors
ESG risks: The integration of ESG and sustainability criteria into the investment process may exclude securities of certain issuers for reasons other than investment and, therefore, certain market opportunities available to funds that do not use ESG or sustainability criteria may be unavailable to the SICAV, and its performance may sometimes be better or worse than that of comparable funds that do not use ESG or sustainability criteria.
144A securities risk: The 144A securities are traded between a limited number of QIBs [3], which may cause a higher price volatility and a lower asset liquidity of certain 144A securities.
Sovereign debt risk: Certain countries are especially large debtors to commercial banks and foreign governments. Investment in such debt obligations, i.e. sovereign debt, issued or guaranteed by such governments or governmental entities involves a higher degree of risk.
Sustainability risks: Given the Sub-Fund’s Investment Strategy and risk profile, the likely impact of the sustainability risks on the Sub-Fund’s returns is expected to be medium.
[1] AXA IM’s exclusion policies: countries sanctioned by international organizations, climate risk, soft commodities, controversial weapons, Ecosystem Protection Deforestation tobacco, white phosphorus weapons, UNGC breaches and poor ESG quality
[2] Details of the methodology and its limits are available in the prospectus.
[3] QIB = Qualified Institutional Buyers
Disclaimer
This promotional communication is intended for both Retail and Professional, Institutional, Qualified or Wholesale Clients / Investors as defined by the MiFID (2014/65/EU).
This communication does not constitute on the part of AXA Investment Managers or its affiliates a solicitation or investment, legal or tax advice. This material does not contain sufficient information to support an investment decision.
It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date.
All information in this communication is established on data made public by official providers of economic and market statistics. AXA Investment Managers disclaims any and all liability relating to a decision based on or for reliance on this communication. All exhibits included in this communication, unless stated otherwise, are as of the publication date of this communication.
Furthermore, due to the subjective nature of these opinions and analysis, these data, projections, forecasts, anticipations, hypothesis, etc. are not necessary used or followed by AXA IM’s portfolio management teams or its affiliates, who may act based on their own opinions. Any reproduction of this information, in whole or in part is, unless otherwise authorised by AXA IM, prohibited.
Before making an investment, investors should read the relevant Prospectus and the KIID, which provide full product details including investment charges and risks. The information contained herein is not a substitute for those communications or for professional external advice. These documents are available free of charge from AXA IM Benelux, Place du Trône 1 - 1000 Brussels, and via the website www.axa-im.be.
The products or strategies discussed in this communication may not be registered nor available in your jurisdiction. Please check the countries of registration with the asset manager, or on the web site https://www.axa-im.com/en/registration-map, where a fund registration map is available. Please note that the management company reserves the right, at any time, to no longer market the product(s) mentioned in this communication in a European Union country by notification to its authority of supervision in accordance with European passport rules.
In particular units of the funds may not be offered, sold or delivered to U.S. Persons within the meaning of Regulation S of the U.S. Securities Act of 1933. The tax treatment relating to the holding, acquisition or disposal of shares or units in the fund depends on each investor’s tax status or treatment and may be subject to change. Any potential investor is strongly encouraged to seek advice from its own tax advisors.
In the event of dissatisfaction with the products or services, you have the right to make a complaint either with the marketer or directly with the management company (more information on our complaints policy https://private-investors.axa-im.be/fr/plainte). You also have the right to take legal or extra-judicial action at any time if you reside in one of the countries of the European Union. The European online dispute resolution platform allows you to enter a complaint form (https://ec.europa.eu/consumers/odr/main/?event=main.home2.show) and informs you, depending on your jurisdiction, about your means of redress (https://ec.europa.eu/consumers/odr/main/?event=main.adr.show2).
AXA World Funds Euro Inflation Plus is a sub-fund of AXA World Funds. AXA World Funds ‘s registered office is 49, avenue J.F Kennedy L-1885 Luxembourg. The Company is registered under the number B. 63.116 at the “Registre de Commerce et des Sociétés” The Company is a Luxembourg SICAV UCITS IV approved by the CSSF and managed by AXA Funds Management, a société anonyme organized under the laws of Luxembourg with the Luxembourg Register Number B 32 223RC, and whose registered office is located at 49, Avenue J.F. Kennedy L-1885 Luxembourg.
AXA World Funds Euro Inflation Plus is a collective asset-management vehicle under the European UCITS directive and is authorized for commercialization in Belgium. It is managed by AXA Investment Managers Paris, a company incorporated under the laws of France, having its registered office located at Tour Majunga, 6 place de la Pyramide, 92800 Puteaux, registered with the Nanterre Trade and Companies Register under number 353 534 506.
Any reproduction, in whole or in part, of this communication is strictly forbidden without the express prior consent of AXA IM. AXA Investment Managers Paris shall not be held liable for any decision taken on the basis of this information.
Issued by AXA Investment Managers Paris, a company incorporated under the laws of France, having its registered office located at Tour Majunga, 6 place de la Pyramide, 92800 Puteaux, registered with the Nanterre Trade and Companies Register under number 353 534 506, and a Portfolio Management Company, holder of AMF approval no. GP 92-08, issued on 7 April 1992.
Distributed in Belgium and Luxembourg by AXA IM Benelux, a company incorporated under Belgian law with its registered office at Place du Trône, 1, B-1000 Brussels, registered in the Brussels Trade Register under number 604.173.
© AXA Investment Managers 2021. All rights reserved.