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Axa IM fund taps China’s short duration bond market

China_bicyclesAxa Investment Managers has launched the Axa World Funds China Short Duration Bonds Fund, partly as a way to mitigate the risk of interest rate normalisation.

The Luxembourg-domiciled Sicav will be co-managed by Axa IM's joint venture in Shanghai and will give investors exposure to China’s 56 trillion renminbi (€7 trillion) bond market.

Honyu Fung, senior portfolio manager on the Asian fixed Income team and the lead fund manager, will adopt a bottom-up security selection approach to identify high quality bonds with an average rating of BBB+.

The aim is to limit duration to less than three years. Shorter portfolio duration mitigates volatility from changes in the market level of interest rates and mitigating credit, inflation and interest-rate risks, the firm said.

The fund is the latest in the Axa IM short duration range. It has retail and institutional share classes and is registered for distribution in Austria, Belgium, Denmark, France, Finland, Germany Italy, Luxembourg, the Netherlands, Portugal, Spain, Switzerland Sweden, UK, Norway and Finland.

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