Investment Strategies

Fixed Income

We cover a broad spectrum of fixed income strategies to help investors build diverse portfolios that can be more resilient to economic and market shifts.

Our approach

Fixed income can help preserve capital, generate regular income from coupon payments on fixed rate bonds, and help to offset market fluctuations over time. It can also provide diversification in a portfolio that includes other asset classes, including generally riskier ones, like equities.

Actively managed strategies

Building a diversified portfolio of single fixed income securities can be time consuming and costly for an individual investor. That's why we offer strategies in fixed income that we actively manage. 

Weather economic ups and downs

We've managed fixed income portfolios through economic ups and downs for decades. Our global team of local experts draw on our robust research capabilities and have extensive experience in monitoring risk. 

Multi-tiered risk approach

We understand credit, interest rate, inflation, liquidity, and market risks, and we manage against them. 

Backed by research

We use global macroeconomic insights, bottom-up company credit analysis, and an assessment of ESG factors1 to navigate the increasingly complex fixed income market. 

  • The ESG data used in the investment process are based on ESG methodologies which rely in part on third party data, and in some cases are internally developed. They are subjective and may change over time. Despite several initiatives, the lack of harmonised definitions can make ESG criteria heterogeneous. As such, the different investment strategies that use ESG criteria and ESG reporting are difficult to compare with each other. Strategies that incorporate ESG criteria and those that incorporate sustainable development criteria may use ESG data that appear similar but which should be distinguished because their calculation method may be different.

Global scale and experience

We have 120+ experts across three continents and 25+ years’ experience in fixed income investing2 .

  • Via AXA IM as of November 2021

Full spectrum investing

We offer a comprehensive range of strategies spanning the whole spectrum of the fixed income universe across developed and emerging markets, government and corporate debt, and investment grade and high yield markets. 

We actively manage investments for our clients every day, with the aim of delivering positive total return or outperforming market benchmarks.

Setting a benchmark can help individual investors understand the specific types of investments a strategy will make and provide a means of measuring its performance versus the wider market.  

While benchmarks can provide a good indicator of the sectors, regions, or credit ratings included in the portfolio, an active approach doesn't simply replicate the benchmark in the portfolio. Instead, it uses the managers' knowledge and skill to build a selective portfolio of the most attractive opportunities within the benchmark, with the aim of adding value on top of the benchmark’s performance – referred to as an 'active return'.  

Our strategies aim to outperform their benchmarks within a 'tracking error budget'. This means the level of active return we aim for is relative to a target level of active risk. 

For strategies which are not measured against a benchmark the focus is on aiming to deliver attractive risk-adjusted by using greater flexibility to navigate market movements without reference to an index.   

We offer the flexibility to capitalise on opportunities across the fixed income spectrum.

Our active flexible fixed income strategies have the freedom to respond to market environments, rather than following a benchmark. This allows us to put the focus aiming to achieve a return target for a given level of risk. 

Sustainable strategies are those where investment decisions are guided by environmental, social and governance (ESG) themes. They aim to promote environmental sustainability and minimise the negative impact of issues such as climate change, while also potentially delivering financial returns.

Why sustainable investing? 

At AXA IM, we believe investing responsibly goes hand-in-hand with our fiduciary duty to clients. We strive to look out for the long-term interests of our clients by guiding companies towards more responsible behaviour and investing in those that meet the conditions for sustainable growth.  

We believe a focus on sustainable investing helps us make better investment decisions and can be a means by which we can help accelerate the transition to a more sustainable world. Companies are having to adapt to their customers’ higher expectations around sustainable practices, which is backed by governmental and regulatory support to incorporate sustainability measures into company information.  

Our strategy 

Our Sustainable strategies embed sustainability factors into portfolio construction and use responsible investing analysis to refine and enhance the asset class universe.  

Responsible Investing

Putting sustainability front and center

Aim for long-term prosperity and to help in a sustainable future for the planet. Continue to promote and grow sustainability over the coming years.

Explore responsible investing

High yield bonds

High yield bonds can offer higher long-term returns than other types of bonds. While considered at the higher risk end of fixed income, they can provide a useful contribution to a well-diversified portfolio.

Why high yield bonds? 

High Yield bonds typically have shorter maturities (the time until the principal investment is repaid) than many investment grade bonds. They are more exposed to credit risk, which is the risk that the issuer will be unable to repay the loan, but they tend to be less exposed to interest rate risk. 

Our strategy 

We use bottom-up research to identify companies with improving credit trends, while our macroeconomic insights seek to identify risks and opportunities associated with the overall economy and market. Using this two-pronged approach, we aim to minimise default risk and manage volatility through active management, while pursuing high yield opportunities. 

Emerging markets

Emerging markets are quickly becoming drivers of global growth and are home to some of the world's most innovative companies.

Why emerging markets? 

While the risks involved with investing in emerging markets can be higher, so are the yields on offer.  

Our strategy 

Our emerging markets team aims for income generation, while attempting to mitigate risk. They're located throughout the world’s major markets and take a conviction-based, long-term investment approach. 

Developing customised solutions involves partnering with clients to design, optimise and manage bespoke solutions, tailored to their needs.

In the late 2000s, Liability Driven Investment (LDI) mandates became a popular solution for institutional investors. LDI, at its most simple level, is about hedging assets and liabilities, and controlling the volatility of the portfolio on a day to day basis. 

More recently, Cashflow Driven Investment (CDI) mandates have risen to prominence as a complement to LDI solutions by meeting institutions’ cashflow requirements. CDI is a more forward-looking and long-term approach that seeks to help clients increase their ability to meet their future cashflow requirements and funding objectives. 

Why solutions? 

Effectively managing cashflow challenges amid ever-decreasing liquidity in credit markets and rising transaction costs is becoming increasingly vital.

A successful CDI strategy is one that aims to generate cashflows through selecting assets like high quality corporate bonds that can provide contractual income in-line with the expected cashflow requirements. 

Our strategy 

Our solutions team works to provide strategic advice, portfolio management expertise and cost-effective implementation. 

At the core of our cashflow driven investing solutions is our long-term Buy and Maintain credit approach, designed to potentially increase cashflows. 

Risks

No assurance can be given that our fixed income strategies will be successful. Investors can lose some or all of their capital invested. Our strategies are subject to risks including, but not limited to: liquidity risk, credit risk, interest rate risk, counterparty risk, legal risk, valuation risk, operational risk, emerging markets risk; global investments risk; and risks related to the underlying assets. 

    Disclaimer

    This page is for informational purposes only and does not constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services and should not be considered as a solicitation or as investment, legal or tax advice. The strategies discussed herein may not be available in all jurisdictions and/or to certain types of investors.. 

    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.