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AXA WF Emerging Markets Short Duration Bonds

ISIN LU0800597873

Last NAV 113.4700 USD as of 08/04/20

Why this fund

Access the growth potential of emerging markets through diversified exposure to short term sovereign and corporate credit, with a focus on stable income generation and low volatility. The Fund focuses on securities with short duration – three years or less – issued in the emerging market universe. The strategic portfolio allocation aims to achieve performance by investing mainly into hard currencies but has the leeway to tactically allocate to local currencies.

Reasons to invest:

  1. An attractive risk-adjusted return profile thanks to an active conviction-based approach that focuses on total return whilst paying close attention to the liquidity and volatility of the underlying assets
  2. A focus on securities with duration of three years or less, aiming for stable income generation and low volatility
  3. Should benefit from a high carry due to emerging market currencies with the added feature of exposure to the diversity of the emerging market credit universe.


The AXA WF Emerging Market Short Duration Bonds has $1.35bn of assets under management*; the Fund is managed by a highly-experienced team of investment professionals.

AXA Investment Managers offers a wealth of experience built over various market and economic cycles, with more than 15 years' experience managing emerging market fixed income and over 10 years' managing short duration bond strategies.

Other short duration strategies AXA IM offer include AXA Sterling Credit Short Duration Bond Fund and the AXA US Short Duration High Yield Fund.

Key figures

  • $1.2 billion

    Over $1.2 billion assets under management

  • 100 - 120 issuers

    Typically 100 - 120 issuers split across sectors and countries

  • 2012

    Fund managed by Sailesh Lad since 2012

Fund facts:

  • Launch Date: 30/04/2010
  • Sector: US high yield
  • Fund Manager: Carl Whitbeck
  • Pay Dates: Last day of Feb, 31 Aug

Overview

Investment objectives

The Sub-Fund's investment objective is to seek performance, in USD, by investing mainly in short duration debt securities issued in the emerging debt universe over a medium term period.

Risk

Synthetic Risk & Reward Information scale

1 2 SRRI Value 3 4 5 6 7

The risk category is calculated using historical performance data and may not be a reliable indicator of the Sub-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

Counterparty Risk: Risk of bankruptcy, insolvency, or payment or delivery failure of any of the Sub-Fund's counterparties, leading to a payment or delivery default. Geopolitical Risk: investments in securities issued or listed in different countries may imply the application of different standards and regulations. Investments may be affected by movements of foreign exchange rates, changes in laws or restrictions applicable to such investments, changes in exchange control regulations or price volatility. Liquidity Risk: risk of low liquidity level in certain market conditions that might lead the Sub-Fund to face difficulties valuing, purchasing or selling all/part of its assets and resulting in potential impact on its net asset value. Credit Risk: Risk that issuers of debt securities held in the Sub-Fund may default on their obligations or have their credit rating downgraded, resulting in a decrease in the Net Asset Value. Impact of any techniques such as derivatives: Certain management strategies involve specific risks, such as liquidity risk, credit risk, counterparty risk, legal risk, valuation risk, operational risk and risks related to the underlying assets.The use of such strategies may also involve leverage, which may increase the effect of market movements on the Sub-Fund and may result in significant risk of losses.

Investment horizon

This Sub-Fund may not be suitable for investors who plan to withdraw their contribution within 3 years.

Main documents

KIID 01/04/2020

Fund manager comment : 31/03/20

Key points Markets continued to be negatively impacted by the spread of the global coronavirus pandemic. The AXA WF Emerging Markets Short Duration Bond Fund (`The Fund') returned -12.38%. The Fund adjusted its holdings via both the primary and secondary markets. Asset class inflows reversed sharply during March and now stand at -$28.9 billion year-to-date. Market snapshot Markets continued to be negatively impacted by the spread of the global coronavirus pandemic and the social and economic impact it will have as large-scale lockdowns were announced in countries across the world. US 10-year treasuries fell significantly below 1%, hitting new lows, while stock markets continued to sell off in dramatic fashion. Developed central banks and governments reacted accordingly by slashing interest rates, increasing quantitative easing (QE) and announcing large fiscal stimulus packages to shore up markets. The benchmark JP Morgan Hard Currency Sovereign Index posted a return of -13.85%, while the JP Morgan Hard Currency Corporate Index returned -11.52%. Asset class inflows reversed sharply during March and now stand at -$28.9 billion year-to-date. The US Federal Reserve cut rates by 150 basis points (bps) in two separate cuts and, after announcing $700 billion of QE in co-ordinated central bank action across the globe, announced unlimited QE and aid for companies and municipalities as markets continued to sell off. The US government also agreed a $2 trillion stimulus package. Oil prices dropped throughout the month to currently stand a little over $20 per barrel, and at 17-year lows, after the breakup of the OPEC+ alliance, which triggered an all-out price war. The European Central Bank (ECB) announced a _700 billion emergency coronavirus package among other measures to combat the virus that has struck mainland Europe. In CEEMEA, rating agencies and central banks were active like everywhere else, with central banks cutting rates in Serbia, Ukraine, Egypt, Turkey, Poland, South Africa, Romania and the Czech Republic more than reversing the hike in February. Rating agencies were active downgrading various countries, with key highlights that included Moody's downgrading South Africa and keeping it on negative outlook. S&P downgraded various oil producing nations such as Kuwait, Oman, Nigeria, Angola while affirming Russia, Saudi Arabia, Qatar, Kazakhstan and Azerbaijan. Latin America wasn't immune to the potential fallout from the virus, with select governments announcing fiscal packages and central banks acting accordingly by cutting rates to bolster their economies. Chile made its largest rate cut since 2009, by 75bps. Brazil, Peru, Mexico and Colombia all cut rates. S&P downgraded Mexico to BBB and put Colombia's rating on negative. Fitch revised Chile's outlook to negative. As the virus increased its presence in Asia, India announced a 21-day lockdown in an attempt to stop the spread of the virus. The Indian central bank cut rates 75bps and cut the cash reserve ratio by 100bps. There were a host of other emergency rate cuts enacted by central banks across the region, including China, Malaysia, Indonesia, Philippines, Pakistan, Singapore, South Korea, Sri Lanka and Thailand. Fund activity The Fund participated in the primary market and switched its existing holdings in Israel as well as adding to its corporate holdings in Turkey, Russia and Brazil. We maintained our investments in hard currency bonds and are unlikely to add any FX risk. Fund performance The Fund returned -12.38% in March, with all parts of the portfolio contributing to this negative performance as a result of the large market moves across all asset classes. Outlook The coronavirus pandemic is clearly centre stage to everybody as we grapple with the consequences and measures to help alleviate the expected social and economic impact of the virus. Markets are adjusting to headlines very swiftly as central banks and governments across the globe have altered their policies accordingly as a result. We remain cognisant of macro headlines and the implications of the virus, alongside the heightened geopolitical issues related to the oil price war. We aim to remain disciplined in the names in which we invest. We believe that differentiation and credit fundamentals remain crucial to stock selection but need to be conscious of liquidity in these volatile markets. Risk factors The Fund is subject to risks associated with all fixed income securities, including but not limited to interest rate risk and credit risk. The Fund may be exposed to specific risks, such as derivatives risk and leverage, risk of global investments, risk linked to high yield debt securities and risk linked to investments in emerging markets. Investors should refer to the Fund Prospectus for a detailed description of risk considerations.

Performance

Any performance shown is net of the ongoing charge for the share class selected with income reinvested . 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
- - -

NAV

First NAV date 28/12/12

Administration

Distribution country

Distribution countries
Austria
Belgium
Denmark
Finland
France
Germany
Hong Kong
Italy
Korea, Republic of
Luxembourg
Netherlands
Norway
Singapore
Spain
Sweden
Switzerland
United Kingdom

Fees

Ongoing Charges 0.89%

Fund facts

Currency USD
Start date 06/09/12
Asset class FIXED INCOME
RI fund False
Legal authority Commission de Surveillance du Secteur Financier

Portfolio management

Fund Manager Sailesh LAD
Co-manager Mikhail VOLODCHENKO
Investment team MT Active Emerging Markets

Structure

Investment area Global Emerging Markets
Legal form SICAV

Subscription and redemption

The subscription, conversion or redemption orders must be received by the Registrar and Transfer Agent on any Valuation Day no later than 3 p.m. Luxembourg time. Orders will be processed at the Net Asset Value applicable to the following Valuation Day. The investor's attention is drawn to the existence of potential additional processing time due to the possible involvement of intermediaries such as Financial Advisers or distributors.The Net Asset Value of this Sub-Fund is calculated on a daily basis.

Literature