AXA Investment Managers (AXA IM), the investment management arm of French insurance giant AXA, has launched its second actively managed fixed income ETF.
AXA IM has introduced its second Paris-aligned fixed income ETF in Europe.
The AXA IM USD Credit PAB UCITS ETF invests in US dollar-denominated corporate bonds while aligning its portfolio with the climate targets set by the Paris Agreement.
The fund has been listed on Deutsche Börse Xetra in euros (AIPT GY) and US dollars (AIPU GY), coming to market with $80 million in initial assets.
It has an expense ratio of 0.18%.
Benchmarked against the ICE US Corporate Paris Aligned Absolute Emissions Index, the fund invests in fixed and floating-rate, US dollar-denominated, investment-grade bonds that have been issued by corporate issuers in developed markets.
Issuers that are embroiled in severe ESG-related controversies, as well as firms with business operations linked to weapons, tobacco, thermal coal, oil & gas, or oil sands, are ineligible for inclusion into the portfolio.
Security selection is driven by AXA’s internal analysis of credit and market risk. The final portfolio is constructed so as to deliver an immediate 50% reduction in weighted average carbon intensity relative to the broad market ICE BofA US Corporate Index as well as a further 7% annual decarbonization going forward, aligning with a trajectory to limit global warming to 1.5°C above pre-industrial levels by 2050.
The fund is the second Paris-aligned fixed income ETF from AXA following the July 2023 launch of the €150m AXA IM Euro Credit PAB UCITS ETF (AIPE GY) which focuses on the euro-denominated investment-grade credit market. AIPE’s expense ratio is slightly higher at 0.20%.
Both ETFs are classified as Article 8 products under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).