AXA IM launches first social and sustainable bond fund
- 15 February 2022
- AXA Investment Managers (AXA IM) has launched the AXA WF ACT Social Bonds fund that aims to deliver positive and measurable social impact.
- The fund signifies AXA IM’s ongoing commitment to strenghen its Green, Social and Sustainable bond (GSSB) expertise and broaden its impact funds range.
- The new fund is managed by Johann Plé and will invest at least 75% in social and sustainability bonds, deemed eligible according to AXA IM’s proprietary GSSB framework.
AXA Investment Managers (AXA IM) announces the launch of the AXA World Funds – Act Social Bonds fund, that aims to support the transition to a more sustainable economy while ensuring measurable social benefit and seeks to generate long-term income and growth.
The fund’s social benefit will be focussed on three key themes:
- Empowerment to promote access to education as well as employment preservation and creation,
- Inclusion to promote access to basic needs such as clean water, energy, or housing,
- Health and safety to support broader access to healthcare services.
It should primarily address the following United Nations’ Sustainable Development Goals (SDGs):
- No poverty (SDG 1),
- Good health and well-being (SDG 3),
- Decent work and economic growth (SDG 8),
- Sustainable cities and communities (SDG 11).
To align with these SDGs, the fund will invest at least 75% in social and sustainability bonds, and up to 25% in rigorously selected conventional bonds aligned with a positive social impact. This approach will enable AXA IM to create a more diversified universe, with better liquidity and an enhanced yield profile while ensuring transparency and allocations have a measurable social benefit.
The social and sustainability bond selection process will rely on AXA IM’s proprietary GSSB framework1 [1] that aims to identify the most relevant social and sustainability bonds from issuers with a credible sustainable strategy and meaningful projects.
The conventional bond selection process will aim to identify issuers that have high ESG standards with a strong focus on the “S” pillar and that contribute positively to social SDGs.
The Fund will be actively managed with a potentially significant deviation in allocation and performance compared to the ICE Social Bond benchmark index (the “Benchmark”).
Commenting on the launch, Johann Plé, manager of the AXA WF ACT Social bonds fund said: “In the transition to a low carbon economy, we cannot ignore the social dimension. While most impact investment strategies currently focus on the environment and decarbonisation, we believe the tremendous growth observed in the social and sustainability bond market in recent years is an opportunity to build a dedicated Social Bond strategy and we are proud to launch our first bond fund invested in this space.”
The strategy is part of AXA IM’s ACT range2 and represents the cornerstone of its dedicated social and sustainable bond offering.
It is classified as an Article 93 product according to the EU Sustainable Finance Disclosure Regulation (SFDR), highlighting the robust sustainable bond selection process in place to deliver positive social impact.
Five percent of the management fees paid to the fund will be donated by AXA IM to several charities.
The fund has received the French SRI4 label and the Towards Sustainability Belgium label5 .
The fund is registered and available to professional and retail investors in Austria, Belgium, Denmark, Finland, France, Germany, Italy (for institutional only as of this date), the Netherlands, Liechtenstein, Luxembourg, Norway, Spain, Sweden, Switzerland and the United Kingdom.
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Biography
Johann Plé
Johann is a Senior Portfolio Manager within the Fixed Income platform. He is responsible for the Euro Aggregate and Impact strategies. Johann joined AXA IM in January 2009 as a Junior Portfolio Manager where he was initially involved across our Multicurrency, Inflation and Aggregate expertise. Since January 2010, he has focused more exclusively on Euro Aggregate portfolios, managing the expertise’s flagship fund AXA WF Euro Bonds. Since 2018, he has in addition taken responsibility for several strategies with a strong focus on Responsible Investment and Impact investment. Prior to joining AXA IM, Johann worked between 2007 and 2008 at Crédit Agricole CIB (formerly known as Calyon) as an assistant trader on the Interest Rates and Derivatives Arbitrage Proprietary desk. Johann holds a master’s degree in Financial Markets from Neoma Business School.
About AXA IM’s approach to impact investing
AXA IM manages a variety of impact strategies, ranging from private equity investments to green and social bonds and listed equities and bonds, which look to provide solutions relating to issues such as healthcare, climate change and biodiversity.
AXA IM’s impact range is its most focused responsible investment offering, with products specifically designed to have a direct, measurable and positive impact on society and/or the environment. These strategies will report definitive and measurable data against impact KPIs such as carbon footprint or lives improved, and each will target one or more UN SDGs. These strategies have a parallel commitment to deliver returns by tapping into the key themes of the sustainability economy.
As of the end September 2021, AXA IM managed about €3 billion of assets in this category.
More information about AXA IM’s approach to impact investing here.
Disclaimer
The value of investments may fall as well as rise and you may not get back the full amount invested.
Risks
Market risk: risk of variation of the Net Asset Value during the life of the Sub-Fund due to market movements (assets price volatility, widening of spreads) in general or in specific markets.
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.
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.
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AXA WF Act Social Bonds is a sub-fund of AXA World Funds. AXA WORLD FUNDS ‘s registered office is 49, avenue J.F Kennedy L-1885 Luxembourg. The Company is registered under the number B. 63.116 at the “Registre de Commerce et des Sociétés” The Company is a Luxembourg SICAV UCITS IV approved by the CSSF and managed by AXA Funds Management, a société anonyme organized under the laws of Luxembourg with the Luxembourg Register Number B 32 223RC, and whose registered office is located at 49, Avenue J.F. Kennedy L-1885 Luxembourg.
SFDR product categorization: The product categorization is provided based on the basis of the European Directive (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (“SFDR Regulation”). The attention of each recipient is drawn to the fact that, as of today the SFDR related regulatory technical standards (“RTS”) have not been finalized and remain subject to the approval and formal adoption by the European Commission and the European Parliament and Council. Furthermore there may be further guidance in relation to the interpretation of the SFDR Regulation. We are monitoring regulatory developments closely, and the product categorization shall be re-assessed and may evolve when the RTS and/or further guidance is published.
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