Investment consulting firm Aon has invested £127m in a newly-launched global short-duration bond fund focusing on the path to net zero by AXA Investment Managers (AXA IM).
The AXA ACT Carbon Transition Global Short Duration Bond Fund is an actively managed short-duration fund benefitting from global diversification and dynamic asset allocation across the full short-dated fixed income spectrum, AXA IM stated.
The fund encapsulates the best ideas from AXA IM’s existing suite of 11 short-duration strategies to build a truly global portfolio, it added.
Built on bottom-up fundamental analysis and top-down asset allocation, the new fund will have a dual objective of financial returns and decarbonisation. It will primarily invest in investment grade bonds with the ability to invest in high-yield and emerging market debt opportunistically, the asset manager noted.
Aon cited AXA IM’s extensive short-duration capability, responsible investment credentials and client focus as reasons behind seeding the fund.
Philippa Allen, portfolio manager at Aon, said: “We believe AXA IM is a skilled short-dated credit manager and are pleased to have worked with them and seeded this carbon transition fund. The allocation to this strategy within several of our solutions continues Aon’s commitment to aligning its UK fiduciary portfolios to net zero.”
Vivek Roy, senior consultant relations manager at AXA IM, added that working with Aon to launch a carbon transition version of its global short-duration bond strategy “has been a natural extension of our capabilities and solution-building approach to work with investment consultants and all asset owners”.
Nicolas Trindade, who currently manages approximately £2bn in global and sterling liquid short-dated fixed income strategies for AXA IM, will be lead portfolio manager of the new open-ended fund.
He said: “With global yield curves still inverted, we believe this is a great opportunity to launch a fund able to select the most compelling net zero opportunities in an asset class offering both high yields and the potential for an attractive total return.”
Trindade added that the new fund will continue to focus on providing investors with “strong downside mitigation and ‘natural’ portfolio liquidity, while ensuring that the names we invest in are committed to the net zero transition”.
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