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AXA IM FIIS US Corporate Bonds A USD
Please note past performance should not be used as a guide to future performance, which is not guaranteed. Investment Managers funds should be considered a long term investment. The value of your investment may go down as well as up. There is no guarantee that you will get back the amount you originally invested.
We recommend that investors seek financial advice before making investment decisions.
Latest Fund Manager commentary:
The AXA IM FIIS US Corporate Bonds Fund slightly under-performed its benchmark,
the Barclays Capital US Intermediate Corporate index in April. The portfolio’s
performance during the month was driven by positive security selection, particularly within the Industrial sector, which was offset by cash drag. US Treasury interest rates declined across the intermediate and longer maturity portion of the yield curve in April. The Corporate Intermediate index posted positive 102 bps of total return and negative 17 bps of excess return in April. The index average OAS widened 8 bps to end the month at 174 bps. Within the intermediate portion of the market the Utility sector (-2 bps excess return) out-performed both the Industrial (-16 bps) and Financial Institutions (-23 bps) sectors during April.
The fund received significant subscriptions during the month resulting in active buying
though-out the month as we invested these new subscriptions. The portfolio’s sector
allocation remains aligned with our strategic recommended positioning including a
continued overweight to the Financial Institutions sector and the Banking sector
specifically. Within the broad Industrial sector, the portfolio remains overweight the Real Estate sector and underweight the more defensive sectors which trade at tighter spread levels including Consumer Non-Cyclical and Healthcare. The portfolio remains
underweight the more defensive Utility sector. Given our constructive outlook for the US economy and the US corporate credit markets, the portfolio maintains a relative
overweight to the lower rated triple-B portion of the market. The duration of the portfolio remains approximately in line with the duration of the benchmark.
To characterize the monthly array of economic statistics during April in any other manner than less than expected, arguably misses the point. Whether the root cause lay in higher gas prices at the pump or some form of “payback” for the above normal temperatures experienced across most of the country in January and February, it was clear that the current course of the economy is progressing at a rate that is insufficient to accomplish the Federal Open Market Committee’s growth objectives. To that end, and with much debate back and forth, there appears to be a consensus belief amongst investors, strategists and pundits that the Federal Reserve does indeed stand ready, if economic conditions deteriorate markedly, to deploy additional balance sheet resources as necessary. All of which charged investors throughout the month with weighing the value of the “Bernanke put” against the deteriorating southern Europe fiscal austerity programs.