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AXA IM launches first social and sustainable bond fund

  • AXA Investment Managers (AXA IM) has launched the AXA WF ACT Social Bonds fund that aims to deliver a positive and measurable social impact.
  • The fund signifies AXA IM’s ongoing commitment to strengthen 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 framework[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 range[2] and represents the cornerstone of its dedicated social and sustainable bond offering.

It is classified as an Article 9[3] 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 SRI[4] label and the Towards Sustainability Belgium label[5].

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.

[1] See: https://www.axa-im.co.uk/sites/uk/files/2021-05/Green%20Bonds%20Framework-interactif.pdf

[2] The ACT range: these assets invest with a purpose to support the transition to a more sustainable economy. Funds have been assigned thematics aligned to ESG and/or UN’s Sustainable Development Goals (SDGs) objectives. Active stewardship is a key focus for this range, with voting and engagement reporting available at fund level. This range encompasses sustainable and listed impact funds.

[3] The product categorisation is provided based on the basis of the European Directive (EU) 2019/2088 on the sustainability-related disclosures in the financial services sector (“SFDR Regulation”) and state of knowledge at the time of creation of this document. As of today the SFDR related regulatory technical standards are not yet finalised and enforced and while we monitor closely regulatory developments, the product categorisation shall be re-assessed once such regulatory technical standards are published and may evolve.

[4] The SRI (Socially Responsible Investment) label is a tool for choosing responsible and sustainable investments. Created and supported by the French Ministry of Finance, the label aims to make socially responsible investment (SRI) products more visible to savers in France and Europe. More information on the website www.lelabelisr.fr

[5] For more information on sustainable products, please visit https://www.towardssustainability.be/en/quality-standard. The label is awarded for one year and is subject to yearly reassessment. Obtaining this label by the sub-fund does not mean that it meets your own sustainability objectives or that the label meets the requirements of future national or European rules.

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