Warning: members of the public are being contacted by people claiming to work for AXA Investment Managers UK Limited.  Find out more information and what to do by clicking here.

AXA Global Strategic Bond Fund

  • 17 February 2023 (5 min read)

Strong month as market rallies on improved outlook

  • Bond markets rallied in January with a continued trend towards disinflation and peak rates
  • Investors were also attracted by improved valuations, particularly in govies and IG credit
  • We increased duration exposure and continued a rotation towards better quality assets

What’s happening?

Good start to the new year with lower yields, tighter credit spreads and higher equities, driven by a strong relief rally given current attractive valuations, particularly in fixed income, together with an improved macroeconomic backdrop with lower inflation and expectations that we are approaching the peak in central bank interest rates.

US 10-year treasuries reversed December’s sell off and moved back below 3.5% during the month. European and UK yields moved in a similar direction, while credit spreads in both investment grade and high yield moved a long way below their recent highs in October 2022.

Key central banks continue to raise rates and signal that more is to come, but economic growth and confidence data is deteriorating. Most inflation data is off its recent peaks, which is benefitting bond yields and, in turn, is supporting most markets. Meanwhile, the global employment data is proving to be more resilient than many expect at this point in the economic cycle, which still leaves markets poised for further volatility.

Portfolio positioning and performance

Defensive (37%): we added 3 years of duration in both US and European bond markets, to end the month with 5.5 years of exposure. High cash levels at year-end came down as we bought government and investment grade bonds.

Intermediate (32%): we continue to find attractive opportunities in the investment grade space – predominantly in BBBs and the Financials sector, but over the last few months we have added to A-rated bonds that look attractive from both a yield and credit spread perspective.

Aggressive (31%): the new year started with strong returns in the high yield market, but also a reopening of the new issue market, which again gave confidence to investors – boosted by large demand. Our exposure to CCC companies, particularly in the US high yield market, performed particularly well. Towards the end of the month, we slightly dampened down credit exposure with a tactical hedge using CDS, as markets have moved quickly to price out the recessionary risks.


The outlook for global fixed income markets is attractive, with a starting point of high yields and reasonably attractive credit spreads. There seems to be a consensually constructive view, particularly focused around higher quality fixed income in terms of government bonds and investment grade credit, with a more mixed view further down the credit curve.  

While inflation remains elevated and central banks are still raising rates, there is much confidence that we are approaching the peak in global interest rates, which should provide support for fixed income.

Over the medium term there is potentially quite a bullish scenario in which investors, who for now seem to prefer taking short duration exposure in both credit and government bonds, reinvest as yields come lower either further out the yield curve or further down the credit curve, leading to quite attractive return potential.

While we remain constructive in the medium term, it is entirely possible we may see some bouts of 2022’s volatility return in the short term, even though yield and carry on fixed income assets is much more attractive than in previous years. That said, for now the year has started very strongly indeed.

No assurance can be given that the AXA Global Strategic Bond Fund will be successful. Investors can lose some or all of their capital invested. The AXA Global Strategic Bond Fund is subject to risks including counterparty risk, derivatives risk, geopolitical risk, interest rate risk, securitised assets or CDO assets risk, emerging market risk, liquidity risk, credit risk, risks linked to investments in sovereign debt, high yield bonds risk and contingent convertible bonds (“CoCos”) risk. Further explanation of the risks associated with an investment in this fund can be found in the prospectus.

Download the full monthly perspective
Download report (249.77 KB)
Fixed Income

Unconstrained Fixed Income

This provides the potential flexibility to capitalise on opportunities across the fixed income spectrum as and when they arise.

Find out more

visit our fund centre

Fixed Income
Global Strategic Bond strategy

The aim of the strategy is to generate income and any capital growth over the long term (being a period of five years or more).

View funds


    Not for Retail distribution: This document is intended exclusively for Professional, Institutional, Qualified or Wholesale Clients / Investors only, as defined by applicable local laws and regulation. Circulation must be restricted accordingly.

    This marketing communication does not constitute on the part of AXA Investment Managers a solicitation or investment, legal or tax advice. This material does not contain sufficient information to support an investment decision.

    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.

    Before making an investment, investors should read the relevant Prospectus and the Key Investor Information Document / scheme documents, which provide full product details including investment charges and risks. The information contained herein is not a substitute for those documents or for professional external advice.

    The products or strategies discussed in this document may not be registered nor available in your jurisdiction. Please check the countries of registration with the asset manager, or on the web site https://www.axa-im.com/en/registration-map, where a fund registration map is available.  Please note that the management company reserves the right, at any time, to no longer market the product(s) mentioned in this communication in the European Union country by notification to its authority of supervision in accordance with European passport rules. In particular units of the funds may not be offered, sold or delivered to U.S. Persons within the meaning of Regulation S of the U.S. Securities Act of 1933. The tax treatment relating to the holding, acquisition or disposal of shares or units in the fund depends on each investor’s tax status or treatment and may be subject to change. Any potential investor is strongly encouraged to seek advice from its own tax advisors. In the event of dissatisfaction with the products or services, you have the right to make a complaint either with the marketer or directly with the management company (more information on our complaints policy is available in English https://www.axa-im.com/important-information/comments-and-complaints). You also have the right to take legal or extra-judicial action at any time if you reside in one of the countries of the European Union. The European online dispute resolution platform allows you to enter a complaint form (https://ec.europa.eu/consumers/odr/main/index.cfm?event=main.home.chooseLanguage) and informs you, depending on your jurisdiction, about your means of redress (https://ec.europa.eu/consumers/odr/main/?event=main.adr.show2).

    Past performance is not a guide to current or future performance, and any performance or return data displayed does not take into account commissions and costs incurred when issuing or redeeming units. References to league tables and awards are not an indicator of future performance or places in league tables or awards and should not be construed as an endorsement of any AXA IM company or their products or services. Please refer to the websites of the sponsors/issuers for information regarding the criteria on which the awards/ratings are based. 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. Exchange-rate fluctuations may also affect the value of their investment.  Due to this and the initial charge that is usually made, an investment is not usually suitable as a short term holding.

    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.