fund

Rated

This is one of our rated funds. They’re the ones our experts believe will do well for investors over the longer term. Top of the class!

AXA US Short Duration High Yield ZI Gross GBP

A portfolio of US high yield bonds with an average maturity of 3 years.

  • 91.45p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 149.20p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.45%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.46%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 4.40%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 23 November 2020, fund data last updated 13 April 2012

The fund aims to deliver a high level of income by investing in sub-investment grade corporate debt securities, with a focus on shorter maturities. The fund will only invest in high yield securities with a maturity of three years or less, issued in the US and denominated in USD. The fund may also invest in transferable securities, derivatives, cash, deposits, units in collective investment schemes and money market funds. The fund is not constrained to a benchmark and is fully hedged back to sterling. Bonds issued by major governments and companies will be more stable than those issued by emerging markets or smaller corporate issuers; in the event of an issuer experiencing financial difficulty, there may be a risk to some or all of the capital invested. Any historical or current yields quoted should not be considered reliable indicators of future performance.

Fund summary

Sector Global Bonds
Structure OEIC
Launched April, 2010
Size £673m
Yield 4.40%
Charging basis Income
Dividends paid 28 Feb, 31 Aug

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.45%
Ongoing charges figure 0.46%

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Investment process

The fund aims to identify companies with improving credit trends and strong operating fundamentals through credit intensive investment research. It invests in sub investment grade, corporate debt securities with a maturity or call date of three years or less issued by companies with their predominant place of business in the US. The nature of the portfolio means that it focuses very much on buying securities in the secondary market as opposed to participating via new issues. Market liquidity and bid offer spreads at the desired maturity points tend to be more attractive relative to the broader high yield bond market. Performance generation comes primarily from security selection while duration management and yield curve positioning are secondary drivers. The fund manager will manage duration to reflect market conditions; historically the percentage of the fund investment in bonds with a maturity of less than three years has ranged from 30-70%. The fund currently only uses derivatives to hedge out the currency risk borne by investors.

We believe short dated high yield bonds are ideally suited to the current environment due to a combination of lower interest rate sensitivity and reasonably attractive risk premiums. Income levels are also reasonable although not as high as those available from traditional high yield bond funds.

Manager research

Average monthly relative returns

  • 15/16 -0.04%
  • 16/17 0.04%
  • 17/18 -0.03%
  • 18/19 0.08%
  • 19/20 -0.07%

Bestinvest MRI

  • 3 years -0.01%
  • 5 years 0.00%
  • Career 0.01%
  • 3 years 60.30%
  • 5 years 65.50%
  • Career 80.20%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Carl Whitbeck / Robert Schumacher

Whitbeck, CFA, is a US fixed income portfolio manager/analyst with AXA Investment Managers. Prior to joining AXA Investment Managers in 2002, he was an analyst in the investment banking division of Lehman Brothers, where he performed financial analysis on companies in the consumer and retail sectors and worked on a variety of M&A and high yield transactions. He holds a B.A. from Williams College and has the CFA professional designation. Schumacher is a strategist/senior portfolio manager with AXA IM, with over 30 years of capital markets experience, with hands-on experience in sales, trading, management, marketing and investment management of retail and institutional assets. Prior to joining AXA IM in 2008, he served as the Chief Investment Strategist at Van Kampen Investments. In 1991, he achieved a Lipper #1 ranking for fixed income managers. Schumacher holds a B.A. from DePauw University and his M.B.A. from the J.L. Kellogg School of Management at Northwestern University.

Track record

Carl Whitbeck / Robert Schumacher has 9.4 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.01%. During the worst period of relative performance (from June 2014 - March 2020) there was a decline of 6% relative to the index. The worst absolute loss has been 7%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 80%.

Periods of worst performance

Absolute -7.00% (December 2019 - March 2020)
Relative -6.00% (June 2014 - March 2020)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Top 10 holdings

Data accurate as at 31 July 2020

1.4% Nielsen Finance Llc/Co 5% Bds 15/04/22 Usd2000
1.3% Solera Llc/Fin Inc 10.5% Bds 01/03/24 Usd2000 144a
1.3% Commscope Inc 5.5% Bds 01/03/24 Usd2000
1.2% Change Healthcare Hldgs Llc 5.75% Bds 01/03/25 Usd2000
1.1% Sinclair Television Group Inc 5.625% 08/01/2024
1.1% Jbs Usa Llc / Jbs Usa Finance 5.875% 07/15/2024
1% Acadia Healthcare Co Inc 5.625% Bds 15/02/23 Usd2000 144a
1% Zayo Group / Zayo Capital 6% 04/01/2023
1% Icahn Enterprises Lp / Finance 6.25% 02/01/2022
1% 1011778 Bc Ulc / New Red Finance In 5% 10/15/2025
Source: Trustnet

Sector breakdown

BB 39.00%
B 34.00%
Money Market 9.00%
CCC 9.00%
BBB 8.00%
Non-Rated 1.00%

Portfolio

The portfolio typically contains 200-300 issues. Individual positions will rarely exceed 1%. Average maturity typically 3 yrs, duration 1.5 yrs.

Constraints

There is a maximum 10% cash limit although this will not normally exceed 5%.

Key Investor Information - Income

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Key Investor Information - Accumulation

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