Short Duration. AXA Investment Managers. Octobre 2016

Transcription

1 This promotion document is intended for Professional Clients under MIFID ( 2004/39/EC) only and can not be rely upon by retail clients. Circulation must be restricted accordingly. AXA Investment Managers Short Duration Octobre 2016

2 Why short duration can be a solution Why is now a good entry point for short duration Challenges for investors Why choose AXA Investment Managers for short duration 1

3 Key risks in the market that clients are facing Want to reduce the impact of market volatility Seeking yield, but don t want to take on too much risk* Want to mitigate the risks of rising interest rates Want to increase the liquidity of a portfolio *Please note, however, that short duration strategies are subject to counterparty risk, credit risk, interest rate risk and liquidity risk. 2

4 Why short duration can be a solution 3

5 Why should investors allocate to short duration? Volatile markets Changing interest rates Liquidity Intermediate step into riskier asset classes 4

6 Short duration helps to reduce the volatility of your portfolio as it is less sensitive to rate and credit spread movements compared with longer durations 6% Annualised volatility versus the market since inception of each fund 5% 4% 3% 2% 1% 0% AXA WF Euro Credit Short Duration AXA IM FIIS Europe Short Duration High Yield AXA WF US Credit Short Duration IG AXA IM FIIS US Short Duration High Yield AXA WF Emerging Markets Short Duration The coupon and capital payments of short duration bonds can be estimated with more certainty than bonds which have longer durations*, implying less volatile returns than the broader market Fund Market Representative Index Source: AXA IM as of 31 March Please refer to slide 6 for funds inception dates. AXA IM s short duration strategies do not have a benchmark. For illustrative purposes only. *Cashflows can be estimated with more certainty on shorter duration bonds due to a shorter time till maturity. AXA IM's short duration investment strategy generally invests in bonds with expected life to maturity of three years or less, but some strategies invest in bonds with expected life to maturity of five years or less. Some funds mentioned may not be available in all jurisdictions, please contact the asset manager for more information. Market representative indices: BofA ML Euro Corporate (AXA WF Euro Credit Short Duration); BofA ML Euro High Yield (AXA IM FIIS Europe Short Duration High Yield); BofA ML US Corp Master (AXA WF US 5 Credit Short Duration IG); BofA ML US High Yield (AXA IM FIIS US Short Duration High Yield); JP Morgan EMBI Global Drivers (AXA WF Emerging Markets Short Duration).

7 Short duration offers a better risk-adjusted return than the market 8% 7% US HY Market Yield to worst 6% 5% 4% 3% 2% 1% AXA WF US Credit Short Duration Investment Grade AXA IM FIIS US Short Duration High Yield AXA IM FIIS Europe Short Duration High Yield AXA Sterling Credit Short Duration EUR IG Corporate Market AXA WF Euro Credit Short Duration Emerging Corporate Market AXA WF Emerging Market Short Duration Bonds European HY Market US IG Corporate Market Sterling Corp Market Since inception, our short duration fund range has provided an average of 79% of the underlying market s return with 49% of the volatility 0% 0% 1% 2% 3% 4% 5% 6% Volatility since inception Source: AXA IM, BofA ML and JP Morgan for yields to worst and volatility of funds and underlying markets as at 31 March Inception dates for AXA WF US Credit Short Duration Investment Grade: September 2013, AXA WF Euro Credit Short Duration: January 1999, AXA IM FIIS Europe Short Duration High Yield: August 2011, AXA IM FIIS US Short Duration High Yield: April 2004, AXA Sterling Credit Short Duration: November 2010, AXA WF Emerging Market Short Duration Bonds: September Some funds mentioned may not be available in all jurisdictions, please contact the asset manager for more information. For illustrative purposes only. 6

8 Short duration can help mitigate the impact of rising rates as regular cashflows from maturing bonds can be reinvested at higher rates in the market 5% Comparative one year total return in a 100bps rate hike scenario Fund versus Underlying Relevant Market 4% 3% 2% 1% 0% -1% -2% -3% -4% Interest rates (yields) and bond prices move in opposite directions, therefore rising yields have an adverse impact on bond prices -5% AXA WF Euro AWF Credit Euro Short credit Duration SD AXA IM FIIS AXA WF US Europe AIM FIIS Short AWF Credit US Short Credit Europe Duration SD High HY Duration SD IG Yield Investment Grade AXA IM FIIS US AIM Short FIIS Duration US High SD HY Yield AXA WF Emerging AWF Emerging Market Short Markets Duration SD Bonds AXA WF Asian AWF Short Asian Duration SD Bonds AXA Sterling Credit Short Credit SD Duration Bonds Bonds SD Funds Underlying Markets Source: AXA IM, as of 29 April The above chart is a theoretical example of what could potentially happen to short duration fund yields in a 1% rate hike scenario and there is no guarantee that this will occur. Some funds mentioned may not be available in all jurisdictions, please contact the asset manager for more information. Market representative indices: BofA ML Euro Corporate (AXA WF Euro Credit Short Duration); BofA ML Euro High Yield (AXA IM FIIS Europe Short Duration High Yield); BofA ML US Corp Master (AXA WF US Credit Short Duration IG); BofA ML US High Yield (AXA IM FIIS US Short Duration High Yield); JP Morgan EMBI Global Drivers 7 (AXA WF Emerging Markets Short Duration). For illustrative purposes only. Data regarding future performance must not rely on historical data but must be appropriate and proofed by objective assumptions. This is the result of a calculation based on assumptions, to which AXA IM has only limited influence and can't guarantee for this.

9 Performance in years with rising short-term rates in the US market AXA IM FIIS US Short Duration High Yield Performance versus Corporate Maturity Indices Change in yield during the year AXA IM US Short Duration High Yield BofA Merrill Lynch Index Returns Year 2 year US Treasury Volatility Return US Corp 1-3 US Corp 3-5 US Corp year US Treasury bps 1.5% 10.5% 5.3% 6.9% 8.9% 2.5% bps 1.6% 7.7% 1.8% 3.4% 5.3% 2.4% bps 2.5% 5.5% 1.8% 1.5% 0.3% -2.4% bps 2.4% 1.5% 1.2% 3.1% 5.6% 2.9% The above example is specific to the AXA IM US Short Duration High Yield expertise and shows the fund performance during periods of short-term interest rate increases. AXA IM s common approach to short duration investing generally means a lower sensitivity to interest rate changes across the entire short duration range. Sources: AXA IM, Inc., BofA Merrill Lynch. Past performance is not indicative of future results. The performance shown is gross of applicable management fees. The deduction of fees reduces the level of return. The above information presented is supplemental to the GIPS-compliant presentation. No assurance can be given that the strategy will be successful or achieve its objectives. 8

10 Short duration bonds can increase the liquidity of your portfolio by having a larger percentage of your overall portfolio in short maturity debt Avoid forced selling In a stressed environment, investors of short duration bonds can potentially avoid being forced sellers Maturing bonds can provide regular cashflows to a portfolio. This enables a fund manager to: Higher reinvestment rate Regular cashflows could be reinvested in the market frequently, potentially seizing investment opportunities and higher rates Lower transaction costs Holding bonds until maturity implies lower transaction costs, which can improve returns over the long term Source: AXA IM 9

11 Short duration offers an intermediate step into riskier assets for investors seeking higher yields Annualised Volatility Annualised Return Euro Gov 1-3yr 2-yr US Treasury AXA Sterling Credit Short Duration Bond Fund AXA WF US Credit Short Duration IG I USD AXA WF Euro Credit Short Duration AXA IM FIIS Europe Short Duration High Yield AXA IM FIIS US Short Duration High Yield Investors may consider looking beyond domestic markets towards Asia, high yield and emerging markets, where short duration products can offer an attractive* riskreturn profile AXA WF Emerging Markets Short Duration 5% 4% 3% 2% 1% 0% 1% 2% 3% 4% 5% Source: AXA IM. Period of calculation: 28/12/2012 to 31/03/2016.*Lower volatility with consistent performance, higher sharpe ratio. The performance shown is gross of applicable management fees. The deduction of fees reduces the level of return. Past performance is not indicative of future results. 10

12 Why choose AXA Investment Managers 11

13 Why should investors choose AXA Investment Managers? A full range to cater to differing investment needs A trusted, tried and tested approach History of success in short duration* *AXA Investment Managers offers investors over 15 years of experience in managing short duration strategies across market cycles, for a diverse client base. These strategies have displayed limited drawdowns and delivered positive returns in every calendar year over the past three years - please refer to slides 28 and 29. Past performance is not a guide to future performance. The deduction of fees reduces the level of return. 12

14 We offer a short duration solution to meet your needs whether you are looking for a higher yield or to combat inflation 26 billion globally under management, across eight Short Duration strategies: Investment Grade Sterling Credit Short Duration 469m under management Launched in 2010 US IG Credit Short Duration $124m under management Launched 2013 Euro IG Credit Short Duration 3,295m under management Launched in High Yield US Short Duration High Yield $20,676m under management Launched in 2001 Europe Short Duration High Yield 2,939m under management Launched in 2011 Emerging and Asia Emerging Markets Short Duration $1,283m under management Launched in 2012 Asian Short Duration $21m under management Launched in March 2015 New Inflation Global Inflation Short Duration* $176m under management Launched in March 2016 New Source: AXA IM as at 31/08/2016. (1) Launched in 1999 as an aggregate fund, the Fund s strategy shifted to pure credit in * Short duration inflation strategy not yet registered in all countries.. 13

15 A common investment philosophy which seeks to capture potential income in short dated securities while minimising default risk Definition is that the average duration to worst of the overall fund should be below three years bonds with duration or maturity to expected call below three years* Focus on cash bonds only No derivative management / duration hedging income generation Buying bonds with targeted returns and strong risk return characteristics credit or macro fundamentals Capitalising on strong economic and credit research teams buy and maintain to maturity While management is active, we will try to hold our exposures if we believe that there is no risk of repayment, and that yield remains interesting A trusted, tried and tested investment approach has helped us to expand our range of short duration products across multiple asset classes, with total assets under management of 26 billion** *The strategies generally invest in bonds with an expected life to maturity of three years or less, with the exception of some strategies. The Emerging Markets Short Duration Bonds Fund for example has an average duration of approximately 2.5 years and never above three years, but it can invest up to 15% of the portfolio in bonds maturing between five to eight years, which it actively does. The Global Inflation Short Duration Fund also invests in bonds below a five year maturity. **Source: AXA Investment Managers as of 31/08/

16 We have over 15 years of experience in managing short duration across market cycles, for a diverse client base Investment Grade High Yield August-13 August-14 August-15 August August-13 August-14 August-15 August-16 AXA WF Euro Credit Short SD Duration AXA AXA WF WF US US Credit Credit Short SD IGDuration Investment Grade AXA AXA Sterling Sterling Credit Credit Short SD Bond Duration Fund AXA IM FIIS US Short SD High Duration Yield High Yield AXA IM FIIS Europe SD Short High Duration Yield High Yield AXA WF Emerging Markets SD Short Duration Source: AXA IM. Cumulative returns calculated for a three year period as of August 2016, when rebased to 100. The performance shown is gross of applicable management fees. The deduction of fees reduces the level of return. Past performance is not a guide to future performance. Some funds mentioned may not be available in all jurisdictions, please contact the asset manager for more information. 15

17 Our history of success across our strategies is displayed through limited drawdowns compared with the broader markets Short Duration funds versus broader markets Three years maximum drawdown (DD) (at end March 2016) 0% AXA WF Euro Credit Short Duration AXA WF Euro Credit SD AXA WF US Credit Short Duration AXA Investment WF US Credit Grade SD AXA AXA IM IM FIIS FIIS Europe Europe Short SD Duration High Yield High Yield AXA IM FIIS US Short AXA IM FIIS US Duration High Yield SD High Yield AXA AXA WF WF Emerging Emerging Market Short Duration Bonds Markets SD AXA Sterling Credit AXA Sterling Credit SD Short Duration Bonds Bond Fund Three years maximum drawdown in % -2% -4% -6% -8% -10% -12% -14% Fund Max DD Market Max DD Source: AXA IM as at end March Past performance is not a guide to future performance. 16

18 Why we believe now is a good entry point 17

19 Why we believe now is now a good entry point for investing in short duration? Volatile markets Low yield environment Interest rates should eventually rise 18

20 High current market volatility as markets are switching between risk-on and risk-off mode Uncertainty over US presidential elections Global monetary policy divergence Market volatility could potentially rise due to: Distortion of asset prices through QE and negative interest rates Ongoing impact of China s economic slowdown Potential of Brexit 19

21 A potential source of yield in an environment where some central banks continue to suppress rates 6% 5% 4% Annualized return versus annualised volatility 3% 2% 1% 0% Renewed quantitative easing efforts by the ECB and BoJ have seen yields fall to new lows in certain regions. As a result, some investors are willing to take additional risk to achieve a positive yield Annualised Return Annualised Volatility Source: AXA IM. Calculated for the period of 5 September 2013 to 31 March The performance shown is gross of applicable management fees. The deduction of fees reduces the level of return. Past performance is not a guide to future performance. 20

22 If global growth picks up interest rates will eventually rise US Fed funds rates projections (end of year) BoE MPC rates projections (end of year) 4% 2% 3% 2% 1% 1% Improving macroeconomic conditions in the US and the UK in particular could lead to higher rates 0% mai % mai FOMC median (16 Mar 2016) 1Y risk-adjusted forwards (18 May 2016) 1Y risk-adjusted forwards (18 May 2016) AXA IM Baseline AXA IM Baseline Source: AXA IM, US Federal Reserve, Bank of England. As it regards AXA IM Baseline: The data are based on a calculation only considering certain assumptions which could not be influenced or guaranteed by AXA IM. 21

23 AXA Investment Managers Short duration range October

24 Our short duration range capabilities Since we pioneered the first US Short Duration High Yield portfolio in 2001, AXA IM has innovated a range of short duration products investing in investment grade credit, high yield, emerging markets and more recently inflation-linked bonds. We have expanded our range of short duration products across multiple asset classes, with total assets under management of 26bn, taking advantage of the expertise and experience gathered since we launched our first short duration. AXA WF Euro Credit Short Duration AXA Sterling Credit Short Duration Bond Fund AXA IM FIIS US Short Duration High Yield AXA WF Asian Short Duration Bonds AXA WF US Credit Short Duration IG AXA IM FIIS Europe Short Duration High Yield AXA WF Emerging Markets Short Duration AXA WF Global Inflation Short Duration Source: AXA IM. Some funds mentioned may not be available in all jurisdictions, please contact the asset manager or the website for more information. 23

25 AXA IM FIIS US Short Duration High Yield Summary Exposure to the short duration US high yield asset class Fund manager aim Generate high current income by investing in better-quality non-investment grade debt of companies with improving fundamentals and expected take-outs of three years or less Inception date: 2001 AUM: $20,676m Typical number of holdings: About the team: The US High Yield team is led by Carl Pepper Whitbeck. The team of 13 people is organised into dedicated product-focused Working Groups (Core and Short Duration), ensuring specialist expertise and depth of team Source: AXA IM as at 31 August Information about AXA Investment Managers staff is only informative as of the date of this document. We do not guarantee continues employment of the mentioned staff members. 24

26 AXA IM FIIS US Short Duration High Yield Key differentiators A total return approach The approach is based on a strict investment discipline that selectively targets lower risk high yield bonds, resulting in lower volatility than the broad US high yield market 12% Annualized Return 10% 8% 6% 4% 2% BofA ML US IG Broad (Aggregate) Master BofA ML US Corporate 1-3 Yr US Treasury 2 Year AXA IM US Short Duration High Yield Composite US Treasury 5 Year AXA IM US High Yield Core Composite BofA ML US Corporate CS Leveraged Loan BofA ML US High Yield BofA ML US BB/B US Treasury 10 Year 0% 0% 2% 4% 6% 8% 10% 12% Annualized Volatility Sources: AXA Investment Managers, BofA Merrill Lynch, evestment Analytics. As of April *Composite Inception Date: September 30, The performance shown is gross of applicable management fees. Past performance is not indicative of future results. The above information presented is supplemental to the GIPS-compliant presentation. No assurance can be given that the strategy will be successful or achieve its objectives. BofA ML High Yield index is shown for illustrative purposes only. The deduction of fees reduces the level of return. 25

27 AXA IM FIIS US Short Duration High Yield Key differentiators Mitigating against volatility and capital loss A total return approach which provides a fraction of the volatility of the comparable US high yield market Total since 2002 Number of Defaults US High Yield Broad Market AXA IM US SDHY Strategy Significant Losses Bonds sold at loss > 30% Bonds sold at loss 20-30% AXA IM US Short Duration High Yield Strategy vs. US High Yield Broad Market Price Historical Price 3 BofA ML US High Yield Index /12/ /12/ /12/ /12/ /12/ Source: J.P. Morgan. 2 Source: AXA Investment Managers. 3 Source: BofA Merrill Lynch, as of April 30, Past performance is not indicative of future results. For illustrative purposes only. 26

28 AXA IM FIIS US Short Duration High Yield Key differentiators A pioneer of the short duration high yield strategy The US high yield team has experience managing the strategy through multiple market cycles Our consistent investment approach and lower risk discipline have generated consistent, positive total returns with low drawdowns during volatile markets Negative Quarters in US High Yield since % 2002 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q4 0% -2% Quarterly Performance -4% -6% -8% -10% -12% -14% -16% -18% AXA US Short Duration High Yield Composite BofA Merrill Lynch US High Yield Index Source: AXA Investment Managers. As of August 31, The BofA ML US High Yield is shown for illustrative purposes only. performance shown is gross of applicable management fees. Please see the Appendix for further information about the effect of management fees. Past performance is not indicative of future results. The above information presented is supplemental to the GIPS-compliant presentation included in the GIPS Disclosure Notes. No assurance can be given that the strategy will be successful or achieve its objectives. The deduction of fees reduces the level of return. 27

29 AXA IM FIIS US Short Duration High Yield Performance GIPS Composite 250% Net Performance since launch 200% 150% 100% 50% Sep-01 Mar-03 Sep-04 Mar-06 Sep-07 Mar-09 Sep-10 Mar-12 Sep-13 Mar-15 1 Year 3 Year 5 Year Since Incept Annualized Returns Annualized Volatility AXA US SDHY GIPS Composite BofA ML US HY Index AXA US SDHY GIPS Composite BofA ML US HY Index Source: AXA IM at 31/08/2016. AXA IM US Short Duration High Yield GIPS Composite. The performance data shown in the table are gross of applicable management fees while the performance shown in the graph is net of applicable management fees. Past performance is not indicative of future results. The deduction of fees reduces the level of return. 28

30 AXA IM FIIS Europe Short Duration High Yield Summary Exposure to the short duration European high yield asset class Fund manager aim The achieve high attractive income and capital growth by investing primarily in high yield debt securities denominated in a European currency over a medium term period Inception date: 2011 AUM: $3,295m Typical number of holdings: 173 About the team: The European High Yield team is headed by James Gledhill, who joined AXA Investment Managers in June He has over 23 years of investment experience. Gledhill is joined by Yves Berger, Senior Portfolio Manager / Analyst within the team, who has 9 years of investment experience. Clark Nicholls and Sharmin Rahman are responsible for the European high yield credit analysis. Source: AXA IM as at 31/08/2016. Information about the high yield team and/or AXA Investment Managers is only informative. We do not guarantee the fact that staff remain employed by AXA Investment Managers and exercise or continue to exercise in the High Yield team of AXA Investment Managers and / or AXA Investment Manager. Information about AXA Investment Managers staff is only informative as of the date of this document. We do not guarantee continues employment of the mentioned staff members. 29

31 AXA IM FIIS Europe Short Duration High Yield Key differentiators 8% Capturing high yields in a low yield environment Capturing a significant part of the yield of the European high yield market* Yield to Worst 6% 4% 2% AXA FIIS Europe Short Duration HY European HY Market* 0% 0% 1% 2% 3% 4% 5% Duration to Worst Source: AXA IM and BofA Merrill Lynch as at 31/08/2016. *Market refers to BofA ML European Currency High Yield Index. The fund does not have a benchmark and the index is shown for illustrative purposes only. 30

32 AXA IM FIIS Europe Short Duration High Yield Key differentiators Mitigating against volatility and capital loss A total return approach which provides a fraction of the volatility of the comparable European high yield market* 10% Annualised Total Return 8% 6% 4% 2% 3-Month German government Bill AXA IM FIIS Europe Short Duration High Yield EMU Corporate Index (Euro IG Credit) European Currency High Yield Index* 0% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% Annualised Volatility 1 Month 3 Months 1 Year Since Inception Performance Volatility Performance Volatility Performance Volatility Performance Volatility AXA IM FIIS Europe Short Duration High Yield Source: AXA IM / Bloomberg as at 31 August Data given is cumulative since launch of the F Acc EUR shareclass on 5 August 2011 and is shown gross of fees. *This fund does not have a benchmark; BofA ML European Currency High Yield Index is shown as a comparison. Past performance is not a guide to future performance. No assurances can be made that profits will be achieved or that substantial losses will not be incurred. The gross returns do not reflect the deduction of investment advisory fees. Your returns will be reduced by fees and any other expenses. All returns have been hedged to EUR. 31

33 AXA IM FIIS Europe Short Duration High Yield Key differentiators Seeks to avoid principle loss and a low default rate We focus on avoiding the impact of negative credit events through in depth credit analysis, strict risk controls and diversified portfolios Total since 2002 Number of Defaults BAML European Currency High Yield Index AXA IM European High Yield Strategy Significant Losses Historical Price BAML European Currency High Yield Index 100 Price /12/ /12/ /12/ /12/ /12/ /12/ /12/ /12/2015 Source: AXA IM and BofAML as of 31 December Past performance is not indicative of future results. 32

34 AXA IM FIIS Europe Short Duration High Yield Performance A - EUR 140% Net Performance since launch 130% 120% 110% 100% 90% Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 1 Year 3 Year Since Launch Gross Performance, A EUR Share 5.02% 14.28% 36.34% Fund Volatility 2.05% 2.08% 2.89% Source: AXA IM at 31 August AXA IM FIIS Europe Short Duration High Yield. The performance data shown in the table are gross of applicable management fees while the performance shown in the graph is net of applicable management fees. Past performance is not indicative of future results. The deduction of fees reduces the level of return. 33

35 AXA WF Emerging Markets Short Duration Bonds Summary Exposure to the short duration emerging markets asset class Fund manager aim The objective is to seek performance by investing mainly in short duration debt securities issued in the emerging debt universe in USD over a medium term period Inception date: 2012 AUM: $1,283m Typical number of holdings: 106 About the team: The Emerging Markets team is a diverse, experienced and integrated team headed by Michael Ganske. On average, the team has around 15 years of industry experience. There are dedicated resources to the emerging markets asset class, including Portfolio Engineers, Economists and Traders Source: AXA IM at 29 April Information about AXA Investment Managers staff is only informative as of the date of this document. We do not guarantee continues employment of the mentioned staff members. 34

36 AXA WF Emerging Markets Short Duration Bonds Key differentiators 6% Access to a higher yielding asset class, with a fraction of the volatility of the market Yield to worst 5% 4% 3% AXA WF Emerging Markets Short Duration Bonds Emerging Corporate Market 2% Focus on the delivery of an attractive riskreturn profile 1% 0% 0% 1% 2% 3% 4% 5% Volatility since inception Source: AXA-IM and BofA ML as at 30/04/2016. Data is unaudited and sourced from our front office portfolio management system. Past performance is not indicative of future results. 35

37 AXA WF Emerging Markets Short Duration Bonds Key differentiators A highly diversified strategy, with exposure to sovereign and corporate credits Investing across over 40 countries in both investment grade and high yield, which reduces default correlation risk 12% 10% 8% 6% 4% 2% 0% Hard Currency Corporates Hard Currency Sovereign & Quasi Sovereign Source: AXA IM as at 31/08/2016 Data is unaudited and sourced from our front office portfolio management system. 36

38 AXA WF Emerging Markets Short Duration Bonds Key differentiators An experienced and integrated EM expertise The Emerging Markets team is a diverse, experienced and integrated team. On average, the team has around 15 years of industry experience Michael Ganske (17) Head of Emerging Markets Fixed Income Nine nationalities London Sailesh Lad (20) Senior EM Portfolio Manager/Analyst Keerthi Angammana (21) Emerging Market Quantitative Analyst Olga Fedotova (18) Head of Emerging Market Credit Research Hassiba Ait Braham (8) Portfolio Manager/Analyst 15 years of average industry experience Paris Iva Alexandrova (17) Senior Portfolio Manager/Analyst Shiv Chopra, CFA (11) Portfolio Manager/Analyst PF de Mont-Serrat,CFA (18) 2 EM FI Portfolio Engineer $9bn in EM fixed income AUM 1 $6.4bn managed in dedicated EM strategies Hong Kong Jim Veneau, CFA (21) Head of Fixed Income, Asia Christy Lee (11) Portfolio Manager/Analyst Alexis Duvernay, CFA (8) 2 Asia FI Portfolio Engineer Honyu Fung, CFA (16) Senior Portfolio Manager/Analyst Jason Pang (10) Portfolio Manager/Analyst Dedicated resources including Portfolio Engineers, EM Economists, and Traders Managing a range of index-aware and total return funds and mandates Source: AXA IM as at 30 April 2016 unless otherwise stipulated. 1 AUM data as at 31 December Using IMF definition of EM markets + Korea, Hong Kong, Taiwan, Singapore, Slovakia, Czech Republic, Slovenia. 2 Figures in parentheses denote total years industry experience. Includes 2 members of the Portfolio Engineering Group seating with the EM and Asian Investment Teams. We do not guarantee the fact that staff remains employed by AXA Investment Managers and exercise or continue to exercise in AXA Investment Managers. 37

39 AXA WF Emerging Markets Short Duration Bonds Performance I - USD 120% Net Performance since launch 110% 100% 90% Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 1 Year 3 Year Since Launch Gross Performance, I USD Share 7.62% 13.23% 18.50% Fund Volatility 2.47% 3.57% 3.77% Source: AXA IM at 31 August AXA WF Emerging Markets Short Duration Bonds. The fund was launched on 05/09/2012. The performance data shown in the table are gross of applicable management fees while the performance shown in the graph is net of applicable management fees. Past performance is not indicative of future results. The deduction of fees reduces the level of return. 38

40 AXA WF Global Inflation Short Duration Bonds Summary Exposure to the short duration inflation-linked asset class Fund manager aim The objective is to seek performance by investing mainly in short duration inflation-linked bonds issued in OECD countries, over a medium term period Inception date: 2016 AUM: $176m About the team: A dedicated, highly experienced inflation-linked team managing UK, Euro and Global inflation-linked funds closely supported by a diverse range of fixed income teams (PEG, Portfolio Managers, analysts, Trading and PSU). Over 25 years experience as a firm managing inflation-linked assets, and one of the first European asset managers to offer a dedicated inflation-linked bond fund in 1983 Source: AXA IM. 39

41 AXA WF Global Inflation Short Duration Bonds Key differentiators Our scale in the global inflation-linked market 19.2bn in global inflation-linked assets under management in our AXA Investment Managers Fixed Income platform Our significant size ensures solid status with counterparties and access* to policy makers and official market participants Diverse client base across all market segments, managing both LDI and benchmarked solutions Source: AXA IM as of 30 April *Access to policy makers and official market participants is not guaranteed. 40

42 AXA WF Global Inflation Short Duration Bonds Key differentiators AXA Short Duration Inflation-Linked Strategy Strategy Min Max Inflation linked bonds maturing in less than 5 year 51% 100% Off benchmark investments - 49% Flexible allocation to inflation-linkers to maximise coupons Seasonal inflation patterns can be exploited to maximise clients income using nominal government bonds up to 30% of the assets, in order to limit the impact of falling prices during selling seasons in particular Maximum exposure to nominal bonds - 30% Duration 0Y 5Y Derivatives for hedging and exposure purposes - 100% Credit Default Swaps - 10% High Yield - 0% Emerging markets securities - 0% Currency Exposures - 0% Total Periphery of Euro Area 0% 30% Italy - 30% Spain - 16% Core of Euro Area 0% 50% US 24% 84% UK 0% 41% Source: AXA IM. 41

43 AXA WF Global Inflation Short Duration Bonds Key differentiators An experienced inflation-linked team A dedicated, highly experienced team with over 25 years of experience as a firm managing inflation-linked assets Global Rates Investment Team 12 investment specialists including 1 UK Inflation expert: John Madziyire - Senior Portfolio Manager, London. 14 years of industry experience. Global Risk Management Team 62 professionals to ensure portfolios are managed within the strategy s stated objectives and constraints Core Investment Team Marion Le Morhedec Deputy head of Global Rates, Paris 18 years of industry experience Joined AXA IM in 2003 Lead Manager of the AXA World Funds Global Inflation Bonds Fund, Co-Lead Manager of the AXA World Funds Universal Inflation Bonds Fund Jonathan Baltora Senior Portfolio Manager, Paris 9 years of industry experience Joined AXA IM in 2010 Lead Manager of the AXA World Funds Universal Inflation Bonds Fund, Co-Lead Manager of the AXA World Funds Global Inflation Bonds Fund Portfolio Engineering Group (PEG) Global team of 8 specialized engineers embedded within each local Fixed Income team and working side-by-side with portfolio managers FI Trading Desk 23 Fixed Income traders based in every major market, delivering best execution Source: AXA IM as at 29 April Data is unaudited and sourced from our front office portfolio management system. Information about AXA Investment Managers staff is only informative as of the date of this document. We do not guarantee continues employment of the mentioned staff members. 42

44 Disclaimer Not for Retail distribution: This document is intended exclusively for Institutional/Qualified Investors and Wholesale/Professional Clients under MIFID ( 2004/39/EC) only, as defined by applicable local laws and regulation. Circulation must be restricted accordingly. This communication is for informational purposes only and does not constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services and should not be considered as a solicitation or as investment, legal or tax advice. Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision. Before making an investment, investors should read the relevant Prospectus and the Key Investor Information Document / scheme documents, which provide full product details including investment charges and risks. The information contained herein is not a substitute for those documents or for independent advice. The recipient agrees that it will use the information contained in this communication only to evaluate its potential interest in the strategies described herein. Any reproduction of this information, in whole or in part, is prohibited. Past performance is not a guide to current or future performance. References to league tables and awards are not an indicator of future performance or places in league tables or awards. The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested. Exchange-rate fluctuations may also affect the value of their investment. Due to this and the initial charge that is usually made, an investment is not usually suitable as a short term holding. Investments in smaller companies offer the possibility of higher returns but may involve a higher degree of risk. This document has been Issued in the UK by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales No: Registered Office: 7 Newgate Street, London EC1A 7NX. Please check the countries of registration and the share classes with the asset manager, or on the web site where a fund registration map is available. The most recent prospectus and Key Investor Information Document (KIID) is available to all investors and must be read prior to subscribing and the decision whether to invest or not must be based on the information contained in the prospectus. The tax treatment relating to the holding, acquisition or disposal of shares or units in the fund depends on each investor s tax status or treatment and may be subject to change. Any potential investor is strongly encouraged to seek advice from its own tax advisors. AXA WF Euro Credit Short Duration, AXA WF US Credit Short Duration IG, AXA WF Emerging Markets Short Duration, AXA WF Asian Short Duration and AXA WF Global Inflation Short Duration are sub-funds of AXA World Funds, which is a SICAV fund domiciled in Luxembourg. AXA IM FIIS US Short Duration High Yield and AXA IM FIIS Europe Short Duration High Yield are sub-funds of AXA IM Fixed Income Investment Strategies, which is a mutual investment fund (FCP) domiciled in Luxembourg. The sub-funds are not recognised by the UK Financial Conduct Authority and are not to be marketed to retail investors in the UK. Information concerning portfolio holdings and sector allocation is subject to change and, unless otherwise noted herein, is representative of the target portfolio for the investment strategy described herein and does not reflect an actual account. The performance information shown herein reflects the performance of a composite of accounts that does not necessarily reflect the performance that any particular account investing in the same or similar securities may have had during the period. Actual portfolios may differ as a result of client-imposed investment restrictions, the timing of client investments and market, economic and individual company considerations. The holdings shown herein should not be considered a recommendation or solicitation to buy or sell any particular security, do not represent all of the securities purchased, sold or recommended for any particular advisory client, and in the aggregate may represent only a small percentage of an account s portfolio holdings. 43

45 Disclaimer Representative Accounts have been selected based on objective, non-performance based criteria, including, but not limited to the size and the overall duration of the management of the account, the type of investment strategies and the asset selection procedures in place. Therefore, the results portrayed relate only to such accounts and are not indicative of the future performance of such accounts or other accounts, products and/or services described herein. In addition, these results may be similar to the applicable GIPS composite results, but they are not identical and are not being presented as such. Account performance will vary based upon the inception date of the account, restrictions on the account, along with other factors, and may not equal the performance of the representative accounts presented herein. The performance results for representative accounts are gross of all fees and do reflect the reinvestment of dividends or other earnings. 44