AXA IM and XP Investments partner to bring digital economy and automation strategies to the Brazilian market
In an environment characterized by heightened market volatility and a sharp rise in employees working from home, AXA Investment Managers (“AXA IM”), a leader in active, long-term investing and XP Investments (“XP”), a top-tier financial services platform, announce they are partnering to offer Brazilian-based investors access to innovative, global equity and fixed income strategies via new local products focused on the digital economy, automation and the US high yield markets.
XP recently launched three local feeder funds for qualified individuals and institutional investors, which invest directly into three AXA IM strategies: US High Yield Bonds, Digital Economy, and Robotech.
The partnership comes during an era of significant market disruption caused by the COVID-19 pandemic and the ensuing accelerated evolution of technology and digitalization. This is characterized by a growing number of global companies with employees working from home, the prevalence of e-commerce and companies that continue to generate revenues from their customers in lockdown via social media, video-streaming and video-gaming. To help meet these challenges, XP and AXA IM are providing thematic equity investment opportunities that were historically difficult to access for Brazilian-based investors seeking exposure to these types of companies that are typically based outside of Brazil. Launching these three strategies in the local market will make them readily available in Brazilian Reais, eliminating concerns about any potential fluctuations with the U.S. dollar.
“The pandemic has had a profound impact on the digital economy, with so many employees working from home. The digital economy, a fast-growing trend last year, has now become a reality and is here to stay. Our partnership with XP comes at the right moment to provide Brazilian investors with greater opportunities to diversify their portfolios abroad and have access to companies whose businesses are not in lockdown but are in fact growing,” said Rafael Tovar, Director, US Offshore Distribution, AXA Investment Managers.
In an effort to provide its clients attractive investment options and diversification, XP is seeking partnerships with the best global asset managers, spanning numerous products and asset classes. As a result, XP chose AXA IM due to its successful and long-term expertise in high yield strategies, in addition to its leadership in investing in several overarching themes where technology and the evolving consumer are reshaping industries and sectors such as automation/robotics and e-commerce.
"There are many attractive opportunities in the international markets and Brazilian investors deserve better access to top-tier global managers as well as strategies that can help them improve the risk/return ratios in their portfolios,” explains Fabiano Cintra, Funds Specialist at XP Investments. “We are very pleased to partner on this client-focused initiative with AXA IM, one of the leading managers in the world with recognized expertise in active investment management.”
The strength of XP as a fast-growing financial powerhouse, combined with the innovative, global investment management capabilities and expertise of AXA IM, provides Brazilian investors global access to some of these dynamic and growing sectors, which are of particular relevance during the current market environment. Technology has facilitated a world in lockdown to continue to operate thanks to connectivity tools for home office and tele-medicine, as well as the capabilities of e-commerce, social media, digital advertising and video streaming to allow people to continue consuming content. The behind-the-scenes technological infrastructure to support these solutions has become critical. This includes the cloud, network broadband capacity, cybersecurity, payment technologies and the physical infrastructure to support the delivery of products and services, such as warehouse automation, semiconductors and robotics. As a result, equity strategies focused on technology disruption will be able to capture these long-term themes.
AXA IM is a leading, global multi-asset manager with approximately U.S. $899 billion under management (approximately 5 trillion Brazilian Reais) as of the end of December 2019. AXA IM is part of AXA Group, a world leader in financial protection and wealth management.
XP is a leading, technology-driven financial services platform and a trusted provider of financial products and services in Brazil with approximately 409 billion Brazilian Reais assets under custody as of the end of December 2019.