AXA Investment Managers has launched the AXA IM Maturity 2023 fund which consists of a fixed term bond strategy primarily invested in European corporate high yield debt securities.
The fund is managed by Yves Berger, senior portfolio manager at AXA IM.
AXA IM’s European high yield team will build a diversified portfolio of European high yield bonds at the beginning of the term, investing in names that have solid business fundamentals in line with their views.
The fund manager intends to hold the securities for the full term but will sell an issuer’s position if the issuer’s credit fundamentals deteriorate.
At the end of the term in 2023, the fund will self-liquidate. All bonds will either be repaid or sold, in the absence of any defaults.
The AXA IM Maturity 2023 fund is available to retail and institutional investors in Belgium, France and Spain. It is available to institutional investors only in Italy and the UK.
AXA IM managed global high yield assets of €27.7bn as at 30 September 2016. The 5-strong European high yield team had over €4.1bn of assets under management as at end of December 2016.
Commenting on the launch, Berger said: “We’ve seen strong growth in the European high yield market since 2009 – it is now approximately a €350bn asset class and has an increasingly diversified issuer base. Our strategy with this fund is to invest in securities we believe we can hold for the full term of the fund and to diversify the portfolio as much as possible to minimise the risk of defaults.
“It is almost impossible to time the market so our approach of investing with a fixed maturity aims to help clients tackle the ongoing challenge of low yields and volatile markets. By staying invested for the full six year life of the fund, investors can pay less attention to the interim price movements; the Fund is designed to be held until the maturity date. Early redemptions will be subject to a 2% fee.”
Chris Iggo, CIO Fixed Income at AXA IM, commented: “European high yield remains one of the few places where investors can still find attractive yields. As interest rates in Europe look likely to remain low, investors seeking a higher total return and willing to take on more risk could consider turning to this asset class as part of diversifying their sources of income.”