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AXA IM launches AXA ACT Green Short Duration Bond fund for UK investors

  • 07 February 2022

  • AXA Investment Managers (AXA IM) currently manages €15.8bn of green bonds1
  • Sustainable wealth manager EQ Investors has committed early stage capital to the new fund

AXA Investment Managers (AXA IM) announces the launch of the AXA ACT Green Short Duration Bond fund, that aims to invest in short-dated green bonds which can offer the same returns as a comparable conventional bond plus the added benefit of enabling projects with environmental benefits.

The launch of the AXA ACT Green Short Duration Bond fund aligns the strategy with AXA IM’s short duration investment philosophy which has been tried and tested across its suite of short duration products. The product should appeal to investors looking to capture potential income in short-dated securities while minimising default risk. Short dated bonds not only reduce sensitivity to changes in interest rates, but also overall volatility.

In line with AXA IM’s dedicated green bond offering, this fund also aims to finance the transition to a low carbon economy by focusing exclusively on green bonds that have been validated by AXA IM’s proprietary green bond framework2 . EQ Investors, the bespoke sustainable investor for charities and high net worth individuals, has committed to investing capital in the fund.  

Commenting on the launch, Johann Plé, manager of the AXA ACT Green Short Duration Bond fund said: “As the demand for green bonds continues to grow, with the market now worth over $1 trillion3 , we believe that there is an opportunity to help responsible investors meet their differing needs through a variety of green bond products. Our short duration product meets the immediate need for a diversified, low volatilty fund with limited interest-rate risk that has all the benefits of green bond exposure. This will help investors to potentially reduce their exposure to climate risks and invest in companies that are working towards a greener society for all.”

Also commenting, Damien Lardoux, Head of Impact Investing at EQ Investors, said: “It’s great to work with AXA IM and support the launch of their new Green Short Duration Bond fund. The climate crisis affects us all, and this new fund deepens the green bond market and makes it easier for investors to finance projects that will fundamentally change our economy and environment.”

Using AXA IM’s proprietary green bond framework, the fund’s environmental impact will be centred on four main pillars which aim to reduce energy consumption, produce clean energy and preserve our ecosystem:

  • Green Buildings
  • Sustainable Ecosystem
  • Low Carbon Transport
  • Smart Energy Solutions

The fund will primarily support the following United Nations Sustainable Development Goals (“UN SDGs”): climate action (SDG13), sustainable cities and communities (SDG 11), industry innovation and infrastructure (SDG 9).

“The combination of our fixed income and RI experts enables us to make a holistic assessment of each issuer, from its ESG track record and quality, to its demonstrable environmental benefits of projects financed and to its use of bond proceeds. The team takes fundamental credit views, with in-depth credit market knowledge gained across different market cycles, based on strong relationships with key issuers developed over the years,” added Johann Plé.

The fund is part of AXA IM’s ACT fund range4  and applies AXA IM’s impact approach for listed assets, where the investment decisions are designed to have an intentional, positive, measurable and sustainable impact on society and/or the environment while simultaneously aiming to deliver financial returns. Five percent of the management fees paid by the fund will also be donated by AXA IM to several charities.

In addition, AXA IM is a significant supporter of the growing Green Investments market – with nearly €32.78 billion  invested in this asset class across different portfolios as at 30 June 2021.

The fund is already available to retail investors across several large UK platforms, and full platform coverage is expected imminently.

  • Figure as at the end of December 2021
  • https://www.axa-im.co.uk/sites/uk/files/2021-05/Green%20Bonds%20Framework-interactif.pdf
  • https://www.reuters.com/business/sustainable-business/global-green-bond-issuance-could-pass-1-trln-next-year-survey-says-2021-10-28/
  • The ACT range (internal classification): these assets invest with a purpose to support the transition to a more sustainable economy. Funds have been assigned thematics aligned to ESG and/or UN’s Sustainable Development Goals (SDGs) objectives. Active stewardship is a key focus for this range, with voting and engagement reporting available at fund level. This range encompasses sustainable and listed impact funds

Biography

Johann Plé

Johann is a Senior Portfolio Manager within the Fixed Income platform. He is responsible for the Euro Aggregate and Impact strategies. Johann joined AXA IM in January 2009 as a Junior Portfolio Manager where he was initially involved across our Multicurrency, Inflation and Aggregate expertise. Since January 2010, he has focused more exclusively on Euro Aggregate portfolios, managing the expertise’s flagship fund AXA WF Euro Bonds. Since 2018, he has in addition taken responsibility for several strategies with a strong focus on Responsible Investment and Impact investment. Prior to joining AXA IM, Johann worked between 2007 and 2008 at Crédit Agricole CIB (formerly known as Calyon) as an assistant trader on the Interest Rates and Derivatives Arbitrage Proprietary desk. Johann holds a master’s degree in Financial Markets from Neoma Business School.


About EQ Investors

EQ Investors (EQ) is an award-winning discretionary fund manager focused on sustainable and impact investing. We build partnerships with intermediaries in the UK and across the globe, offering active, passive, and bespoke investment solutions.

EQ is a Certified B Corporation, an internationally recognised standard for companies that believe in business as a force for good. Making a positive contribution to the wider community is a core part of our business philosophy. EQ has established The EQ Foundation as a registered charity with a focus on social mobility.

For more information about EQ Investors, visit EQ Investors or follow us on Facebook, Instagram, LinkedIn and Twitter.


Risks

Emerging Market Risks: emerging markets or less developed countries may face more political, economic or structural challenges than developed countries. As a result, investments in such countries may cause greater fluctuations in the Fund's value than investments in more developed countries.

Liquidity Risk: some investments may trade infrequently and in small volumes. As a result, the fund manager may not be able to sell at a preferred time or volume or at a price close to the last quoted valuation. The fund manager may be forced to sell a number of such investments as a result of a large redemption of shares in the Fund. Depending on market conditions, this could lead to a significant drop in the Fund's value and in extreme circumstances lead the Fund to be unable to meet its redemptions.

Further explanation of the risks associated with an investment in this Fund can be found in the prospectus.

    Disclaimer

    This press release should not be regarded as an offer, solicitation, invitation or recommendation to subscribe for any investment service or product and is provided for information purposes only. No financial decisions should be made on the basis of information provided.

    Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

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    Issued in the UK by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales No: 01431068. Registered Office: 22 Bishopsgate London EC2N 4BQ

    In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.

    Risk Warning

    The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested. 

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