Why AXA IM US Short Duration High Yield?
We believe our Short Duration High Yield strategy has produced stable, consistent, and positive total returns for over 20 years.
- Invests in securities with expected take-outs of <3 years
- Focused on better quality, improving high yield credits
- Compounds coupon income available to high yield investors while avoiding principal losses
- Targets to generate attractive liquidity profile through natural turnover and coupon interest
Why invest in short duration high yield bonds?
- Focus on capturing coupon income, which historically has driven returns in the high yield market
- Natural turnover allows reinvestment into current market environment to capture prevailing opportunities
- Less sensitivity to interest rate movements against broad US high yield market
- Short duration makes up the most liquid portion of the high yield market
US Short Duration HY vs US IG
Our strategy has consistently outperformed the US Corporate IG Index while maintaining lower volatility.4
Short Duration Bonds
Offer a first step onto the credit ladder with less uncertaintyLearn more
CREDIT RISK - If an issuer of bonds defaults on its obligations to pay income or repay capital, it may result in a decrease in portfolio value. The value of a bond (and subsequently, the portfolio) is also affected by changes in credit rating downgrades and/ or market perceptions of the risk of future default. Investment grade issuers are regarded as less likely to default than issuers of high yield bonds. High-yield, lower-rated, securities involve greater risk than higher-rated securities. Portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not.
RISK OF CAPITAL LOSS – Any investment in our high yield strategies are not guaranteed and returns can be negative. The performance of a portfolio may not be consistent with the objectives of investors and their investment may not be fully returned.
INTEREST RATE RISK - Fluctuations in interest r.ates will change the value of bonds, impacting the value of the investment portfolio Often, when interest rates rise, the value of the bonds fall and vice versa. The valuation of bonds will also change according to market perceptions of future movements in interest rates.
LIQUIDITY RISK - Some investments may trade infrequently and in small volumes and the risk of low liquidity level in certain market conditions might lead to difficulties in valuing, purchasing or selling bonds.
HIGH YIELD BOND RISK - The portfolio will be exposed to a risk related to investments in high yield financial instruments. These instruments present higher default risks than those of the investment grade category. In case of default, the value of these instruments may decrease significantly, which would affect the value of the portfolio. Lower-rated securities generally tend to reflect short-term corporate and market developments to a greater extent than higher-rated securities which respond primarily to fluctuations in the general level of interest rates.
RE-INVESTMENT RISK - Reinvestment risk describes the risk that, as interest rates or market environment changes, the future coupons and principal from any bond may have to be reinvested in a less favorable rate environment. This is more likely to occur during periods of declining interest rates when issuers can issue bonds with lower levels of coupon. Re-investment risk may be greater with callable bonds.
Non-USD investors in offshore vehicles advised or sub-advised, in whole or in part, by the Adviser employing the investment strategy described herein may be subject to currency exchange risk.