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AXA Sterling Credit Short Duration Bond

Elite Rated by FundCalibre

This fund aims to deliver a consistent income for investors by generating a higher yield than cash, while limiting the impact of changes in longer-term interest rates. It does this by investing in high quality corporate bonds with expected maturities of less than five years.

Company Description

AXA Investment Management is the asset management arm of the eponymous French insurance giant. It is one of the largest investment companies in Europe and acquired Framlington Investment Managers in 2005. Framlington Equities provides a dynamic, autonomous investment culture within the larger AXA group.

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Fund Manager

The portfolio has been managed since launch by Nicolas Trindade, who joined AXA in 2006 and is deputy manager on several flagship bond funds. He is well supported by a large team of global analysts, together with macroeconomic strategists and risk management specialists.

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I want companies to pay their coupons and buy back at face value of the bond, so boring companies are the perfect fit for us.

Nicolas Trindade - Fund Manager

The Investment Process

Nicolas seeks to invest in bonds due to mature within five years and issued by companies unlikely to default during that period. These bonds are then typically held to maturity to reduce trading costs. The portfolio is well diversified and structured, so that approximately 20% of the holdings mature each year.

Risk

In order to limit exposure to the risks of changing interest rates, the fund invests in high quality bonds with only a short time to maturity. This cautious approach is consistent with the investment objective of the fund and the strategy of the manager.

Our Opinion

The fund benefits from a strong team, a simple strategy and great resources. By targeting an oft- overlooked part of the bond market, Nicolas is able to exploit a persistent valuation anomaly to generate lower risk income for investors. This fund should perform better than its peers when interest rates rise.

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©2014 FundCalibre Limited. All Rights Reserved. The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not ,guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund or of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating.