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AXA Sterling Credit Short Duration Bond Fund

ISIN GB00BP8Y0645

Last NAV 1.1070 GBP as of 21/02/20

Why this fund

Providing your clients with the lower volatility benefits of a short duration strategy and, in turn, the prospect of superior, risk-adjusted returns.

The AXA Sterling Credit Short Duration Bond Fund forms part of the successful suite of AXA Investment Managers short-duration bond strategies.
The Fund aims to provide investors with consistent, incremental investment returns while, at the same time, minimising overall interest rate risk.

Reasons to invest?

An actively-managed and highly diversified portfolio which aims to deliver consistent returns by:

  1. Focusing on income generation and capital preservation
  2. Maintaining a low volatility profile in order to mitigate downside risk but enabling the Fund to capture upside returns
  3. Minimising the volatility and the interest rate risk by investing in securities with maturities (or call dates) of less than five years
  4. Diversifying the portfolio with over 100 holdings across diverse sector, issuer, rating and maturity levels.

AXA Investment Managers offers a wealth of experience built over various market and economic cycles, with more than 10 years' managing dedicated, short duration bond strategies.
Other short duration strategies AXA IM offer include AXA WF Emerging Markets Short Duration Bonds  and the AXA US Short Duration High Yield Fund.

Key figures

  • 1.5%

    Annualised volatility

  • 100 issuers

    Split across sectors and countries

  • 20%

    On average of the Fund matures annually

Fund Facts:

  • Launch date: 12/11/2010
  • Sector: Sterling Corporate Bond
  • Lead Portfolio Manager: Nicolas Trindade
  • Deputy Fund Manager: Nick Hayes
  • Pay dates: Last day of Feb, 31 May, 31 Aug & 30 Nov
Ratings as at 31 July 2017

Overview

Investment objectives

The aim of the Fund is to provide income combined with any capital growth.

Risk

Synthetic Risk & Reward Information scale

1 SRRI Value 2 3 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 low levels of variation under normal market conditions but, which may still result in 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 three years.

Main documents

KIID 17/02/2020

Fund manager comment : 31/01/20

Key points for January 2020 The short-dated and broad sterling credit markets posted positive total returns this month as credit spreads tightened and gilt yields fell. The AXA Sterling Credit Short Duration Bond Fund (‘the Fund’) benefited from this environment, posting a positive total return of +0.40% (net of fees) in January. Market snapshot Credit spreads tightened in the first half of the month as geopolitical concerns in the Middle East were outweighed by the ‘Phase One’ trade deal between the US and China, increased monetary stimulus in China, and upbeat corporate earnings. However, the rise of the coronavirus in China, and fears over it spreading globally, led credit spreads to widen in the second half of the month. The US Federal Reserve held interest rates unchanged at its first meeting of the year, while the European Central Bank announced that its accommodative policy would also remain unchanged. Gilt yields fell in January on the back of the risk-off environment and increased expectations of a potential interest rate cut at the Bank of England (BoE) January meeting. However, in Mark Carney’s final policy meeting as governor, the BoE maintained interest rates at 0.75%. Fund performance The Fund’s performance benefited from lower gilt yields, tighter credit spreads and its attractive carry (income). Financial names underperformed non-financial names due to the broader risk-off environment. The Fund posted a positive total return of +0.40% (net of fees) in January, leading to +0.40% and +3.31% for 2020 year-to-date and one-year returns respectively. Fund activity We were active in January, managing flows while keeping the Fund in line with our active strategies, with a bias towards low-beta names and defensive sectors. Sterling investment grade primary issuance was £9.4 billion in January, the busiest start to a year since 2009. As such, we participated in several new issues including these from Dutch bank ABN AMRO and China Development Bank, the latter being a new addition to the Fund. During the month, we also topped up our exposure to UK pub Mitchells & Butlers. Outlook We expect growth to remain lacklustre in 2020 as the fallout from the coronavirus, the upcoming US election, the next phase of US-China trade negotiations and the future UK-EU trade relationship should lead to further uncertainty and weigh on business investment and consumer confidence. As such, we maintain a defensive bias within the Fund to allow us to benefit from potential pockets of weaknesses ahead, due to expensive valuations in the sterling credit market and given the lack of monetary policy options left to central banks to accelerate growth.

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

Reference index Start date End date
- - -

Performance table

End date

Performance table Net performance Reference index 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
- - -

NAV

First NAV date 12/11/10

Administration

Distribution country

Distribution countries
United Kingdom

Fees

Ongoing Charges 0.37%

Fund facts

Currency GBP
Start date 12/11/10
Asset class FIXED INCOME
RI fund False
Legal authority Financial Conduct Authority

Portfolio management

Fund Manager Nicolas TRINDADE
Co-manager Phil ROANTREE
Investment team MT Active UK Investment Grade FI & Flexible Global Strategies 

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 initial investment: £1,000,000 Minimum subsequent investment: £5,000

Literature

Documents