Axa Investment Managers has launched a fixed term European high yield bond fund.
Managed by senior portfolio manager Yves Berger, the Axa IM Maturity 2023 fund will focus on firms with “solid business fundamentals”.
Berger will invest in European high yield bonds at the beginning of the term with a view to holding them for the full term, unless the issuer’s credit fundamentals deteriorate. The idea is to keep transaction costs low by minimising turnover.
In 2023 all of the bonds held in the fund will either be repaid or sold, barring any defaults. Early redemptions from investors will incur a 2 per cent fee.
The latest launch follows the launches of the AXA IM Maturity 2020 and Maturity 2022 Funds in October 2015 and November 2016.
Berger says: “We’ve seen strong growth in the European high yield market since 2009 – it is now approximately a €350bn asset class and has an increasingly diversified issuer base. Our strategy with this fund is to invest in securities we believe we can hold for the full term of the fund and to diversify the portfolio as much as possible to minimise the risk of defaults.
He adds: “It is almost impossible to time the market so our approach of investing with a fixed maturity aims to help clients tackle the ongoing challenge of low yields and volatile markets. By staying invested for the full six-year life of the fund, investors can pay less attention to the interim price movements; the fund is designed to be held until the maturity date.”