AXA IM to offer impact investing fund of funds strategy

AXA Investment Managers (AXA IM) plans to offer its impact investing fund of funds strategy to external investors in response to growing client demand. The move forms part of AXA IM’s growing suite of multi-asset ESG integrated strategies which are gaining positive momentum with global and Australian investors.

AXA IM’s global Responsible Investment team began working with AXA Group last year to develop its impact investing approach, which focuses on sectors including healthcare, education and finance. A total of EUR200 million of internal funds has been allocated to the strategy in 2014.

Impact investing – which is broadly defined as investments in business and/or funds that generate social and/or environmental benefit in return – is gaining fierce momentum among sizeable institutional investors both globally and in Australia. Research* shows the impact investing market is predicted to grow up to US$1 trillion by 2020 or 1% of global assets.

Paris-based Matt Christensen, Global Head of Responsible Investment at AXA IM, who is in Australia this week presenting at the ASFA conference, said: “While the impact investing market is still in its relative infancy much progress has been made to enhance its credibility such as the setting up of standards such as IRIS (Impact Reporting and Investment Standards) or labels such as GIIRS (Global Impact Investing Rating System).

“We’ve been very encouraged by the progress the impact investing fund of funds strategy has made to date and the attention it’s getting from investors. We hope to launch a second fund in 2015 which would be open to external investment and accessible to global and Australian institutional investors,” he said.

AXA IM wins global mandate for ESG high yield strategy

ERAFP, the 100% socially responsible €20bn French public service pension scheme, has awarded AXA IM a fully ESG integrated active high yield mandate to help the fund broaden its investment universe in line with its SRI charter.

“This is yet another example of the type of demand we’re seeing from clients across the globe who want fully integrated ESG solutions to meet their specific requirements,” Mr Christensen added.

AXA IM ACWI SmartBeta Equity Fund shows strong performance

AXA IM’s first ever fully integrated ESG SmartBeta strategy, launched in Australia in August this year, has delivered 2% above benchmark returns in its first three months. The AXA IM ACWI SmartBeta Equity Fund (the fund) offers long term investors a more efficient way of capturing equity market beta, while avoiding the limitations of both market cap-weighted indices and alternative weighting schemes.

“ESG and smart beta may seem unrelated, but both approaches reflect a move by investors away from the unintentional and often uncompensated risks associated with traditional index tracking and a greater willingness by investors to make their own determinations about desired exposures, risks and expected returns,” Mr Christensen said.

Powered by AXA Rosenberg, the quantitative investment arm of the global AXA IM group, the fund is accessible via the Asgard platform, having been seeded with A$55 million from local Australian Financial Services Licensee, Financial Index Wealth Accountants (FIWA). The fund also extends AXA IM’s well-established SmartBeta capability from developed to emerging markets via the All Country World Index (ACWI) ex Australia benchmark, offering Australian investors a one stop shop for their global equity smart beta exposure.

Craig Hurt, AXA IM’s Director of Australia and New Zealand, said, “Our extensive research shows ESG smart beta can offer investors a lower risk and higher return than index investing, along with a defensive strategy with improved diversification and ESG performance.

“It’s great to see ESG integration getting firmly on the radar and that more investors, especially those in the post-retirement phase, can benefit from these types of solutions.”