Axa Investment Managers has launched an actively managed Ucits IV fund investing in US investment grade bonds with an average duration of about two years.
The Luxembourg-domiciled Axa WF US Credit Short Duration IG aims to give investors access to the US economy, capturing additional yield over cash while mitigating volatility owing to a relatively lower sensitivity to spreads and interest rates.
Axa says by focusing on bonds that are close to maturity, the fund seeks to lower the volatility of returns and reduce the potential negative impact of interest rate rises, thereby providing stable income and better risk adjusted returns.
David Fourgoux, manager of the fund, says compared to traditional longer duration bond strategies, the AXA WF US Credit Short Duration IG offers a lower sensitivity to interest rate risk.
At the same time, Fourgoux says, it captures credit spread return through detailed fundamental analysis aimed at accurately assessing the ability of companies to repay and/or refinance the shorter bond maturities in their capital structure.
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