AXA Sterling Buy and Maintain Credit Fund

ISIN GB00B7VXY261

Last NAV 1.3940 GBP as of 18/10/19

Why this fund

A fund that is specifically designed for today’s challenging market conditions, aiming to provide the best of both active and passive approaches at low cost.
Today’s environment of declining corporate bond market liquidity and rising transaction costs has made it increasingly challenging to generate alpha from active management. However, the drawbacks of the traditional low-cost alternative of passive management have been well-documented. Low turnover Buy and Maintain strategies have thus become increasingly attractive for their potential to mitigate the inefficiencies of passive approaches while harvesting yield.

Reasons to invest:

  1. Diversified exposure to a global opportunity set with sterling interest rate exposure1. The Fund offers access to a global opportunity set via the sterling  investment grade credit market identified through proprietary credit research. At the sector and regional level, there is an emphasis on long-term themes which the manager believes will deliver over the course of a full market cycle.
  2. Conservative positioning designed to mitigate downside risk. The Fund aims to address the risks inherent in the return asymmetry of bond investing through diversified exposure across issuers, sectors and countries. The Fund allocates assets across four broadly equally-weighted sectors (cyclicals, defensives, financials and securitised instruments), and to a minimum of 200 issuers. This robust framework is  explicitly designed to mitigate against systemic and issuer-specific risk.
  3. Lower turnover means lower cost and less performance leakage. We aim to minimise turnover by carefully selecting quality bonds to be held to maturity, while using natural cash flows (from income and maturing bonds) to actively refresh the portfolio’s positions.

 

Key figures

  • 200

    minimum no. of issuers in our diversified portfolio

  • 23

    years’ experience managing Buy and Maintain

  • 0 %

    targeted active turnover

Fund Manager:

Lionel Pernias, Head of Buy and Maintain London

Lionel joined AXA IM in 2006 and heads the London-based Buy and Maintain Credit team, with overall responsibility for the performance of all London-managed Buy and Maintain Credit portfolios. Lionel was a key member of the project team which developed and launched the strategy in 2012. He manages both Global and Sterling Credit, including the flagships AXA Sterling Buy and Maintain Credit Fund (lead manager) and AXA WF Global Buy and Maintain Credit Bonds (co-manager).

1 The Fund’s duration is maintained within +/- 0.5 years of the broad Sterling Credit market as defined by the BofA Merrill Lynch Sterling Non-Gilt Index

Source: AXA IM as at 30/06/2017

The capital of the Fund is not guaranteed. The Fund is invested in financial markets and uses techniques and instruments which are subject to some level of variation which may result in gains or losses.

Counterparty Risk: failure by any counterparty to a transaction (e.g. derivatives) with the Fund to meet its obligations may adversely affect the value of the Fund. The Fund may receive assets from the counterparty to protect against any such adverse effect but there is a risk that the value of such assets at the time of the failure would be insufficient to cover the loss to the Fund.

Credit Risk: the risk that an issuer of bonds will default on its obligations to pay income or repay capital, resulting in a decrease in Fund value. The value of a bond (and, subsequently, the Fund) is also affected by changes in market perceptions of the risk of future default. Investment grade issuers are regarded as less likely to default than issuers of high yield bonds.

Derivatives: derivatives can be more volatile than the underlying asset and may result in greater fluctuations to the Fund's value. In the case of derivatives not traded on an exchange they may be subject to additional counterparty and liquidity risk.

Interest Rate Risk: fluctuations in interest rates will change the value of bonds, impacting the value of the Fund. Generally, when interest rates rise, the value of the bonds fall and vice versa. The valuation of bonds will also change according to market perceptions of future movements in interest rates.

Liquidity Risk: some investments may trade infrequently and in small volumes. As a result the Fund manager may not be able to sell at a preferred time or volume or at a price close to the last quoted valuation. The Fund manager may be forced to sell a number of such investments as a result of a large redemption of shares in the Fund. Depending on market conditions, this could lead to a significant drop in the Fund's value and in extreme circumstances lead the Fund to be unable to meet its redemptions.

Further explanation of the risks associated with an investment in this Fund can be found in the prospectus

Overview

Investment objectives

The aim of the Fund is to provide an income and capital return (net of fees) in line with the market for sterling denominated, investment grade bonds issued by companies over the long-term while maintaining a low turnover of bonds held by the Fund. The market is represented by the ICE BofAML Sterling Non-Gilt index for long-term performance purposes.

Risk

Synthetic Risk & Reward Information scale

1 2 3 SRRI Value 4 5 6 7

The risk category is calculated using historical performance data and may not be a reliable indicator of the Fund's future risk profile. The risk category shown is not guaranteed and may shift over time. The lowest category does not mean risk free.

Why is this Fund in this category?

The capital of the Sub-Fund is not guaranteed. The Sub-Fund is invested in financial markets and uses techniques and instruments which are subject to some levels of variation, which may result in gains or losses.

Additional risks

Credit Risk: the risk that an issuer of bonds will default on its obligations to pay income or repay capital, resulting in a decrease in Fund value. The value of a bond (and, subsequently, the Fund) is also affected by changes in market perceptions of the risk of future default. Investment grade issuers are regarded as less likely to default than issuers of high yield bonds. Liquidity Risk: some investments may trade infrequently and in small volumes. As a result the Fund manager may not be able to sell at a preferred time or volume or at a price close to the last quoted valuation. The Fund manager may be forced to sell a number of such investments as a result of a large redemption of shares in the Fund. Depending on market conditions, this could lead to a significant drop in the Fund's value and in extreme circumstances lead the Fund to be unable to meet its redemptions. Counterparty Risk: failure by any counterparty to a transaction (e.g. derivatives) with the Fund to meet its obligations may adversely affect the value of the Fund. The Fund may receive assets from the counterparty to protect against any such adverse effect but there is a risk that the value of such assets at the time of the failure would be insufficient to cover the loss to the Fund.

Investment horizon

This Fund may not be suitable for investors who plan to withdraw their contribution within five years.

Performance

Any performance shown is gross of the ongoing charge for the share class selected. The deduction of fees reduces the level of returns.Past performance is not a guide to future performance. The value of investments can fall as well as rise and you may get back less than invested. The fund can use derivatives for investment purposes.  These instruments may cause periods of high volatility in the price of the shares of the fund.

Benchmark

Performance indicator Start date End date
- - -

Performance table

End date

Performance table Net performance Performance indicator  Start date End date
- - - - -
1M - - - -
QTD - - - -
3M - - - -
6M - - - -
YTD - - - -
1Y - - - -
2Y - - - -
3Y - - - -
4Y - - - -
5Y - - - -
8Y - - - -
10Y - - - -
Since launch - - - -
Y-1 - - - -
Y-2 - - - -
Y-3 - - - -
Y-4 - - - -
Y-5 - - - -

Risk table

End date

Risk table Fund volatility Benchmark volatility Tracking error Information ratio Sharpe ratio Beta Alpha
1M - - - - - - -
QTD - - - - - - -
3M - - - - - - -
6M - - - - - - -
YTD - - - - - - -
1Y - - - - - - -
3Y - - - - - - -
5Y - - - - - - -
8Y - - - - - - -
10Y - - - - - - -
Since launch - - - - - - -

Price table

Start date

End date

Price Date Portfolio AUM
- - -

Administration

Fees

Ongoing Charges 0.15%

Fund facts

Currency GBP
Start date 17/09/12
Asset class FIXED INCOME
RI fund False
Legal authority Financial Conduct Authority

Portfolio management

Fund Manager Lionel PERNIAS
Co-manager Fabien COLLADO
Investment team MT Buy & Maintain London

Structure

Investment area UK
Legal form OEIC

Subscription and redemption

Your orders to buy, sell or transfer shares in the Fund, must be received by the Administrator by 12 noon on any working day to receive that day's Fund price. Also this Fund has another Valuation Point on the last business day of each month and therefore an additional dealing cut off at 4.30pm on that day only. Please note that if your order is placed by an intermediary or Financial Adviser, they may require extra processing time.The Net Asset Value of this Fund is calculated on a daily basis. Minimum investment level: £2,000,000 Minimum subsequent investment: £100,000

Literature

Documents