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AXA WF Multi Asset Inflation Plus
Last NAV 101.7900 EUR as of 04/12/19
The Sub-Fund seeks to generate a performance which exceeds the rate of Eurozone inflation, in EUR from an actively managed multi- asset inflation-linked portfolio.
Synthetic Risk & Reward Information scale
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?
Fund manager comment : 31/10/19
October 2019 Macroeconomic environment October was marked by a slight return to optimism linked to a possible resolution to Brexit and a reduction in the risks linked to the trade war. In the United States, the manufacturing sector continues to cause concern and this is beginning to be felt in real data, even though GDP growth for Q3 is stable at 1.9% quarter-on-quarter (QoQ) annualised, thanks to robust household consumption. The ISM PMI dropped to 47.8 in September, its lowest since 2009. The services sector also dropped to 52.6 in September, its lowest since August 2016. We can also see a downturn in job creations, with a current rate of 160,000 net creations per month vs. 220,000 in 2018. The Trump administration also announced that it will postpone the 5 pp increase on imports of Chinese products in exchange for certain measures in favour of US companies. With regard to the impeachment proceedings against Donald Trump, the House of Representatives officially approved the launch of an investigation. Finally, the Fed decided on a further cut of 25 bp to its key rates [1.50%-1.75%] but indicated that it would require a significant deterioration in the economic environment for them to drop again in December. In the eurozone, GDP growth was stable at +0.2% QoQ. France and Spain held up quite well against the slowdown in global activity (+0.3% and +0.4% respectively) and Italy exceeded expectations with 0.1%. The figure for Germany will be published mid-November (we expect to see zero growth). October’s flash PMI surveys for the eurozone indicate that activity is stabilising. As might be expected, the ECB left its monetary policy unchanged at its October meeting, without providing any more details. In Italy, political turmoil is once again the order of the day. The new 5-Star Movement (M5S)-Democratic Party coalition suffered a severe defeat at the regional elections. In Spain, the imprisonment of nine Catalan separatist leaders for sedition, embezzlement of public funds and disobedience sparked widespread demonstrations in Catalonia. In the United Kingdom, a new agreement was reached with the European Union but it could not be approved before the deadline of 31 October. Boris Johnson was therefore forced by Parliament to request an extension, which was granted by the EU until 31 January. Finally, he called an early general election for 12 December. Currently the polls indicate that the Conservatives are clearly in the lead. In Japan, the impact of the increase in VAT on 1 October seems to have been less significant than in 2014, helped along by compensation measures from the government. However, activity is likely to drop automatically in the 4th quarter after the steep rise in consumption during September (early purchases). Finally, the BoJ decided to maintain its ultra-accommodative policy but opened the door to a possible increase in interest rates. In China, GDP growth for Q3 fell to 6% YoY, its lowest for more than three decades. The manufacturing sector, affected by the trade war, is at the root of this slowdown in activity. At a domestic level, activity stood up better, supported by accommodative policies (fiscal and monetary). Despite a number of positive elements in the short term, the trend is still showing a continued slowdown. In this situation, we believe that the government should not be taking any risks and increase its monetary easing policies. Fund performance The stock markets recovered in October, with trade tensions easing and no more negative surprises in terms of macroeconomic data. In the United States, the S&P 500 gained +2% and in Europe, the EURO STOXX 50 gained +1% with the various countries posting mixed performances: the DAX jumped +3.5% while the CAC gained only +1%. The peripheral markets also went their separate ways, with the MIB in Italy increasing +2.7% while the IBEX in Spain remained stable (+0.1%). In the United Kingdom, the FTSE 100 dropped -2.2% in response to the strong recovery in the pound sterling after the expiry of the Brexit extension. The Asian markets reacted very positively to a possible ceasefire in the trade war, with the Japanese indices Nikkei and TOPIX jumping +5.4% and +5%. In China, the Hang Seng in Hong Kong gained +3.1% while the Shanghai composite index advanced +0.8%. Emerging markets (MSCI EM Total Return Index) also made progress, gaining +4.2% in USD and +1.8% in EUR. Most of the bond markets lost some of their recent gains in the face of economic data that were in line with or better than expectations. The Fed’s resolutely accommodative tone allowed the 10-year US yield to remain stable at 1.7% and the yield on the 10-year Bund moved to -0.41%. Likewise for the yield on the 10-year OAT, which moved to -0.1%. Yields on the 10-year Italian BTP and Spanish Bonos also progressed, reaching 0.9% and 0.2% respectively. The yield on the 10-year UK Gilt increased to +0.63%. Likewise, the yields on the 10-year Japanese JGBs reached 0.1%. On the credit market, yield spreads were close to stable for the IG segment but diverged for the HY segment with a narrowing in the United States and a slight widening in Europe. On the foreign exchange market, the US dollar weakened, as indicated by the dollar index, which dropped -2%. The euro gained +2.23% to 1.09 and the pound sterling jumped +5.3% to 1.29 vs. the dollar; the Japanese yen remained almost stable (+0.2%) at 108. On the commodities market, the Bloomberg Commodity ex-Agriculture and Livestock index gained +2.1% thanks to the level of optimism aroused by the easing of tensions on the trade front. Oil prices increased (Brent +2% to $60 per barrel, although WTI was stable at $54) as did industrial metals prices, and copper posted a slight gain (+1.2%). Gold also increased, gaining +2.6% to reach a little more than $1,500 per ounce. Against this background, the fund gained 0.36% net of fees, sustained by the good state of the equity markets, with equities representing 15% of the fund’s assets at the beginning of October. Allocation overview Three positive trends contributed to reducing pressure on the markets in the short term. Firstly, the United States is expected to conclude “Phase 1” of an in-principle agreement with China, covering purchases of agricultural goods, intellectual property, transparency of exchange rates, and opening-up of financial services. This understanding suspends the increase in customs duties that was initially planned for implementation on 15 October and probably also the increase that would have been effective on 15 December. According to our economists’ forecasts, this announcement could mean that the United States “avoids” a cost equivalent to a little under 0.2% of GDP. We believe that a true resolution to the “trade war” would involve the cancellation of all customs duties already in place; we are still a long way from that outcome. At the same time, the uncertainty surrounding trade policy is penalising the global economy and could continue to weigh on investments. However, the most recent indicators for real production and orders in the United States show a degree of resistance; these indicators seem to be moving in a different direction to business climate surveys, which are more pessimistic. Against this background, the current ceasefire in the trade war could reduce the possibility of a slowdown. As a result, we increased our exposure in equities from 15% to 22% during October. Secondly, with Brexit in the news again, although the prospect of an agreement seemed to be very low one month ago, Prime Minister Boris Johnson and the European Union (EU) have managed to agree on a text. Moreover, Boris Johnson was forced by Parliament to request an extension to the Brexit deadline from the EU. We therefore believe the United Kingdom is now much less likely to exit the EU without an agreement, and this should support sentiment on the market and among businesses. Against this background, we introduced options to purchase the pound sterling representing 5% of the fund’s assets. Thirdly, the Fed announced a new programme of liquidity injections for up to USD 60 million per month, via purchases of short-term bonds. This is the first daring action by the central bank since the beginning of the year. The bank is trying hard to avoid the term “quantitative easing” (QE) but the fact remains that in the market’s eyes, this intervention is likely to boost liquidity. With the drop in short-term interest rates and the increase in long-term yields (also due to the optimism aroused by the trade agreement), the yield curve steepened again and became positive once more, which seems to us to be a good sign. Against this background, inflation expectations in the United States appear to be far too low in our opinion, which has led us to increase our exposure in US inflation breakevens by 5%.
Past performance is not a reliable indicator as to future performance.
Performance calculations are net of management fees. Performance are shown as annual performance ( 365 days). In the case where the currency of the investor is different from the Fund’s reference currency the gains are capable of varying considerably due to the fluctuations of the exchange rate.
|Performance indicator||Start date||End date|
|Performance table||Net performance||Performance indicator||Start date||End date|
|Risk table||Fund volatility||Benchmark volatility||Tracking error||Information ratio||Sharpe ratio||Beta||Alpha|
|First NAV date||28/04/17|
|Expertise||Total Return & Allocation|
|Range||AXA World Funds|
|Custodian||State Street Bank Luxembourg S.C.A|
|Asset manager||AXA INVESTMENT MANAGERS PARIS S.A.|
|Depositary||State Street Bank Luxembourg S.C.A|
|Legal asset manager||AXA Funds Management SA (Luxembourg)|
|Fund Manager||Mathieu L'HOIR|
|Investment team||MT Asset Allocation|
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 3 p.m. Luxembourg time. Orders will be processed at the Net Asset Value applicable to the following 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: 100,000 euros or the equivalent in the relevant currency of the relevant Share class. Minimum subsequent investment: 5,000 euros or the equivalent in the relevant currency of the relevant Share class.