AXA Investment Managers (AXA IM) has launched a UK-domiciled global short-duration bond fund focusing on the path to net zero, with Aon providing £127 million in seed capital.

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. The fund encapsulates the best ideas from AXA IM’s existing suite of 11 short-duration strategies to build a truly global portfolio.

Built on bottom-up fundamental analysis and top-down asset allocation, the new fund will have a dual objective of financial returns and decarbonisation. The fund will primarily invest in investment grade bonds with the ability to invest in high-yield and emerging market debt opportunistically.

Aon, the professional services and investment consulting firm, cited AXA IM’s extensive short-duration capability, responsible investment credentials and client focus as reasons behind seeding the fund. Nicolas Trindade, who currently manages c.£2 billion in global and sterling liquid short-dated fixed income strategies for AXA IM, will be lead portfolio manager of the new open-ended fund.

Commenting on the launch 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, said:

“We are delighted to have worked in partnership with Aon to create the AXA ACT Carbon Transition Global Short Duration Bond Fund. As a global leader in responsible investing, AXA IM is committed to accelerating the transition to a net zero world. As such, working with Aon to launch a carbon transition version of our highly successful 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, Senior Portfolio Manager at AXA IM, added:

“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. This 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.”

AXA IM was named Short-Dated Credit Manager of the Year at the Professional Pensions Investment Awards 2023. Nicolas was also awarded his first FE fundinfo Alpha Manager rating this year.

Related Article: New Corporate Governance Rules by AXA IM Target Climate Lobbying and Executive Pay

Capital at risk. The value of investments, and any income from them, may fall as well as rise and investors may get back less than they originally invested.

The SONIA Compounded Index may be used by investors to compare the Fund’s financial performance, which the ACD believes best reflects the outcome of the Fund’s short duration investment strategy when used to compare the performance of the Fund over a minimum period of three years.