AXA WF Emerging Markets Short Duration Bonds
Last NAV 125.6500 USD as of 17/10/19
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:
- 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
- A focus on securities with duration of three years or less, aiming for stable income generation and low volatility
- 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.
- Launch Date: 30/04/2010
- Sector: US high yield
- Fund Manager: Carl Whitbeck
- Pay Dates: Last day of Feb, 31 Aug
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.
Synthetic Risk & Reward Information scale
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?
Fund manager comment : 30/09/19
Key points • As communicated to the markets, developed central banks continued easing their policies • The AXA WF Emerging Markets Short Duration Bond Fund (‘The Fund’) returned +0.75%. • The Fund adjusted holdings via both the primary and secondary markets. • Asset class inflows picked up again, and the 2019 year-to-date figure stands at $56 billion. Market snapshot As communicated to the markets, developed central banks continued easing their policies with the US Federal Reserve (Fed), cutting rates by 25 basis points (bps) and the European Central Bank (ECB) cutting rates further into negative territory by 10bps as well as re-starting its quantitative easing (QE) programme. US President Donald Trump said he would postpone the additional 5% increase in trade tariffs on Chinese imports due to start on 1 October as a gesture of goodwill. China is set to hold further talks with the US at the start of October. Drone attacks on Saudi Oil installations saw Saudi oil supply being cut by half, causing a short surge in oil prices. The benchmark JP Morgan Hard Currency Sovereign Index posted a return of -0.46%, while the JP Morgan Hard Currency Corporate Index returned +0.63%. Asset class inflows picked up during the month, and the 2019 year-to-date figure stands at $56 billion. In CEEMEA, Turkey continued easing monetary policy by cutting interest rates by 325bps. Both Ukraine and Russia cut rates as markets expected with room for further cuts. South Africa left rates unchanged and Kazakhstan surprised markets hiking rates to fight the recent surge in inflation. S&P upgraded Ukraine to B with a stable outlook after the Fitch upgrade and Fitch upgraded Serbia to BB+ but downgraded Saudi Arabia to A. Argentina took centre stage in Latin America again with the central bank re-introducing capital controls. Opposition presidential candidate Alberto Fernandez said that Argentina was in a “virtual, hidden default” and that if was to win the presidential elections in October that the country would honour its debts. Fitch upgraded Argentina to CC from RD. Chile, Brazil and Mexico all cut rates as expected, with the door left open for more cuts. Peru left rates unchanged but said rate cuts were possible further down the road. Fitch upgraded Peru’s ratings to BBB+. In Asia, China announced RRR cuts to help support the economy and said they would take additional measures to ease the trade war impact as data softens. Fitch downgraded Hong Kong to AA with a negative outlook after over three months of demonstrations on the streets of Hong Kong. Fund activity The Fund was active in September where we reduced some low beta sovereign holdings, participated in a new issue in Nigeria as well switched further up the curve in Egypt and Ecuador. We maintained our investments in hard currency bonds and are unlikely to add any FX risk. Fund performance The Fund returned +0.75% in September, with all parts of the portfolio contributing to performance. Outlook There has been a marked increase in the expectation of the policy actions by developed central banks leading to what can be best described as a hunt for yield. However, expectations of a resolution to current trade tensions still look a long distance away are starting to weigh on emerging markets coupled with idiosyncratic stories. We remain cognisant of macro headlines and try to remain disciplined in the names in which we invest. We believe that differentiation and credit fundamentals remain crucial to stock selection. 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.
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.
|Performance indicator||Start date||End date|
|Performance table||Net performance||Performance indicator||Start date||End date|
|Risk table||Fund volatility||Benchmark volatility||Tracking error||Information ratio||Sharpe ratio||Beta||Alpha|
|First NAV date||28/12/12|
|Asset class||FIXED INCOME|
|Legal authority||Commission de Surveillance du Secteur Financier|
|Fund Manager||Sailesh LAD|
|Investment team||Emerging Markets|
|Investment area||Global Emerging Markets|
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.