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AXA IM FIIS Europe Short Duration High Yield

ISIN LU0658026439

Last NAV 117.6500 CHF as of 25/02/20

Overview

Investment objectives

The Sub-Fund seeks to achieve high attractive income and secondarily capital growth by investing primarily in high yield debt securities denominated in a European currency over a medium-term period. The Unit Class aims at hedging the foreign exchange risk resulting from the divergence between the reference currency of the Sub-Fund and the currency of this Unit Class by using derivatives instruments whilst retaining the exposure to Investment Policy described above.

Risk

Synthetic Risk & Reward Information scale

1 SRRI Value 2 3 4 5 6 7

The risk category is calculated using historical performance data and may not be a reliable indicator of the Sub-Fund's future risk profile. The risk category shown is not guaranteed and may shift over time. The lowest category does not mean risk free.

Why is this Fund in this category?

The capital of the Sub-Fund is not guaranteed. The Sub-Fund is invested in financial markets and uses techniques and instruments which are subject to low levels of variation under normal market conditions but, which may still result in losses.

Additional risks

Credit Risk: Risk that issuers of debt securities held in the Sub-Fund may default on their obligations or have their credit rating downgraded, resulting in a decrease in the Net Asset Value. Liquidity Risk: risk of low liquidity level in certain market conditions that might lead the Sub-Fund to face difficulties valuing, purchasing or selling all/part of its assets and resulting in potential impact on its net asset value. Counterparty Risk: Risk of bankruptcy, insolvency, or payment or delivery failure of any of the Sub-Fund's counterparties, leading to a payment or delivery default. Impact of any techniques such as derivatives: Certain management strategies involve specific risks, such as liquidity risk, credit risk, counterparty risk, legal risk, valuation risk, operational risk and risks related to the underlying assets. The use of such strategies may also involve leverage, which may increase the effect of market movements on the Sub-Fund and may result in significant risk of losses.

Investment horizon

This Sub-Fund may not be suitable for investors who plan to withdraw their contribution within 3 years.

Fund manager comment : 31/01/20

Factors affecting performance The modest optimism on the cyclical growth outlook that prevailed at the beginning of January has given way to worry about a health pandemic in the wake of the emergence of the coronavirus in China. January saw, in the end, a shift toward a risk-off environment with global high yield market credit spreads ending the period 37bps wider. The EM region benefitted from its long duration stance and sustained technicals while the US and European regions were more impacted by the change in sentiment. As the high yield primary market activity reopened in both US and European regions, we saw a solid $38.5bn of USD-denominated debt added and €13.2bn of new supply in Europe. Sterling HY outperformed the Euro HY sub universe, being less impacted somehow by the risk-off sentiment. Looking at rating higher beta corporate bonds outperformed the longer duration BB ones while the top-performing sectors in the month were financials and real estate, and the least performing ones were services and retail. In January, the ICE BofAML European Currency High Yield Index recorded +0.3% total return (EUR hedged), with a -0.2% excess return versus governments. Main changes to the portfolio Good activity in the fund through the month in line with current market environment and client flows. On the secondary markets we invested the recent cash build up from the natural strategy’s liquidity generation, trading across sectors and rating buckets. As for primary market we have been participating in deals such as Techem (services), United Group (media), Digi Communications (media) and Altice (telecommunications). Current market influences and outlook Taking a medium-term view investors should keep in mind the fundamental outlook. Central banks are on hold and, if there were to be any change to that call it would be that rates will be cut in the US and UK. At the same time, central bank balance sheets are expanding, and this is generating strong money supply growth. Beyond the virus, external threats to growth have subsided while corporate earnings appear to have stabilised, with Q4 earnings showing some modest beating of expectations. While there are concerns about valuations, 2020 should be a year that delivers modest returns across financial markets. The risk is that, for credit, spreads have become quite tight and any risk of the consensus global outlook not materialising could result in some widening, as already evidenced in parts of the credit market in January. If the spread of the coronavirus is brought under control in the relatively near-term, then macro-economic developments are likely to re-establish a cautiously optimistic risk-on market environment.

Performance

Performance chart

Period

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3M
6M
1Y
3Y
5Y
8Y
10Y
YTD
Since launch

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End date

Benchmark

Performance indicator Start date End date
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Performance table

End date

Performance table Net performance Performance indicator  Start date End date
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1Y - - - -
2Y - - - -
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4Y - - - -
5Y - - - -
8Y - - - -
10Y - - - -
Since launch - - - -

Risk table

End date

Risk table Fund volatility Benchmark volatility Tracking error Information ratio Sharpe ratio Beta Alpha
1M - - - - - - -
QTD - - - - - - -
3M - - - - - - -
6M - - - - - - -
YTD - - - - - - -
1Y - - - - - - -
3Y - - - - - - -
5Y - - - - - - -
8Y - - - - - - -
10Y - - - - - - -
Since launch - - - - - - -

Price table

Start date

End date

Price Date Portfolio AUM
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NAV

First NAV date 08/08/11

Administration

Distribution country

Distribution countries
Austria
Denmark
France
Germany
Liechtenstein
Luxembourg
Netherlands
Sweden
Switzerland

Fees

Ongoing Charges 0.91%

Fund facts

Currency EUR
Start date 05/08/11
Asset class HIGH YIELD AND US ACTIVE FIXED
RI fund False
Legal authority Commission de Surveillance du Secteur Financier

Portfolio management

Fund Manager James GLEDHILL
Co-manager Yves BERGER
Investment team MT European & Global High Yield

Structure

Investment area Euro
Legal form FCP

Subscription and redemption

The subscription, conversion or redemption orders must be received by the Registrar and Transfer Agent on any Valuation Day no later than 10 a.m. Luxembourg time. Orders will be processed at the Net Asset Value applicable to such Valuation Day. The investor's attention is drawn to the existence of potential additional processing time due to the possible involvement of intermediaries such as Financial Advisers or distributors. The Net Asset Value of this Sub-Fund is calculated on a daily basis. Minimum initial investment: 1,000,000 in the relevant reference currency of the relevant Unit class.

Literature