Axa launches short-dated bond fund

Axa launches short-dated bond fund

Axa Investment Management has launched a short-dated bond fund that it believes will be popular with those worried by interest rate rises.

The Global Short Duration Bond fund is a UK-domiciled Oeic, which invests across the whole short-dated fixed income spectrum including inflation-linked, investment grade, high yield and hard currency emerging market bonds.

The bonds it invests in have a maximum of five years maturity.

The company said that the fund aims “to preserve capital through low duration, optimal portfolio diversification and active management while ensuring an attractive liquidity profile and targeting superior risk-adjusted returns”.

Nicolas Trindade, manager of the Axa Global Short Duration strategy, said: "I believe this strategy represents a compelling opportunity for investors worried about rising yields and volatility in these uncertain times.  

“The launch of this is a further extension of Axa IM’s short duration range, which began 15 years ago. We have local market experts – and local short duration bond funds - in each of the asset classes in which this strategy invests.

"Their best ideas are combined within a truly globally constructed portfolio, with the ability to dynamically asset allocate across the full fixed income short duration spectrum.”

Patrick Connolly, communication manager of advisers Chase De Vere, said that, although interest rates are likely to rise from here “nobody knows when and how fast”.

He said: “While short duration funds provide a high degree of capital protection they also limit the prospects of income or capital growth.

“We do have concerns about the potential risks of some fixed interest assets and so typically use flexible strategic bond funds run by experienced managers and teams, which can hopefully benefit from any opportunities while effectively managing potential risks."