Inflation Expertise
Monthly Review
October 2017
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AXA FIXED INCOME
This presentation is for qualified investors and professional clients under MiFID(2004/39/CE) only and must not be relied upon by retail clients. Circulation must be restricted accordingly
1
Introduction to the Inflation-Linked bonds market
Outlook for the inflation-linked bonds markets
Reference Material
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II
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Team investment experts located in each major market around
the world, ensuring our clients benefit from local insights
Philosophy focused on income generation and downside mitigation while
aiming at optimising the risk/return profile over the market cycle
Process a global, top-down approach complemented by bottom-up
research specific to the drivers of each sub-asset class
Solutions
proven ability to provide bespoke solutions to meet our clients’
evolving needs
Scale critical size, particularly in corporate credit, affords us excellent
access to the markets
2
Greenwich 33 FI investment professionals
Mexico City 2 FI investment professionals
London 19 FI investment professionals
Frankfurt 6 FI investment professionals
Zurich 5 FI investment professionals
Paris 53 FI investment professionals
Tokyo 3 FI investment professionals
Hong Kong 4 FI investment professionals
Robust global framework bringing together local experts
Why AXA IM for Fixed Income?
Source: AXA IM as at 31/08/2017. AUM data as at 30/06/2017 (latest available).
€435 billion in Fixed Income, 130 investment professionals
3
Introduction to the Inflation-Linked bonds market
Outlook for the inflation-linked bonds markets
Reference Material
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Inflation
4
The basics (1/2)
Inflation denotes an ongoing fall in the overall purchasing power of the monetary unit due to a rise in the general level of prices
Inflation cannot be observed directly but is estimated using price indices, based on subjective baskets of goods and
services; these baskets evolve over time as products on the market and consumers’ interests change:
CPI (Consumer Price Index)
HICP (Harmonised Index of Consumer Prices)
RPI (Retail Price Index)
Based on the components, there are two categories for inflation:
Headline (overall) which is subject to cyclical fluctuations.
Core (underlying), more representative of the structural evolution of prices (excludes volatile elements such as food and
energy).
Depending on the changes in price levels over time, we also discuss about
Disinflation: Refers to a deceleration in the inflation rate. The inflation rate is declining over time, but it remains positive.
Deflation: is a decrease in general price levels of throughout an economy. The inflation rate is negative.
HOW IS IT MEASURED?
• Measure of the average monthly change in the nominal price of the reference basket.
• They are calculated on a monthly basis and published two to three weeks after the end of the measured month.
Source: AXA IM – For illustrative purposes only
Inflation
5
The basics (2/2)
Money supply if the growth of the money stock increases faster than the level of productivity in the economy, price increases are likely as there is more money “chasing” the same amount of goods and services.
Cost-push inflation If there is an increase in the costs of firms (e.g.. raw materials), the firms will pass this on to consumers through the sale prices (with no adjusted margins).
Demand-pull inflation When there is an excess in aggregate demand (which occurs when the economy is growing too fast) prices are pushed higher.
Inflation expectations Inflation tends to be self-serving. “Future inflation will be as important as past inflation”, This is the core message from Central Banks when using inflation targeting policies. Current measures , however, may jeopardize the credibility.
Currency war Currency depreciation makes import prices more expensive, leading to an increase in inflation.
WHAT CAUSES INFLATION?
Source: AXA IM – For illustrative purposes only
Inflation
6
A word about seasonality
Seasonality is a change in prices or business patterns at given times of the year. This price increase is not uniform and is itself subject to monthly variations.
NATURAL FACTORS CULTURAL BEHAVIOR LEGAL MEASURES
SEASONALITY IS DUE TO:
Source: AXA IM – For illustrative purposes only
Inflation
7
How consumers spend their money?
Source: ECB, https://www.ecb.europa.eu/stats/prices/hicp/html/hicp_coicop_inw_2016.en.html Bureau of Labor Statistics http://www.bls.gov/news.release/cpi.t01.html au 31/12/2016
Breakdown by purpose of consumption (expenditure weights)
15%
27%
42%
23%
3%
6%
15% 16%
8%
6%6%
9%7%
4%3%
9%
US Europe
Food & Beverages Shelter Apparel
Transportation Healthcare Recreation
Education and communication Other goods and services
Inflation
How consumers have spent their money?
8
Source: Bureau of Labor Statistics http://www.bls.gov/news.release/cpi.t01.html au 29/09/2017
Inflation
9
Historical rates
US Headline and Core Inflation (annual rate and cumulative change)
Source: AXA IM, Bloomberg, as at 29/09/2017 – for illustrative purposes only. Developments of the past offer no guarantee and are no indicator for any
future returns or trends.
CPI = Consumer Price Index
Annualized
inflation of 2.5% over 10 years
erodes the
performance of an
investment by 22%
Inflation
10
Impact on investments
Inflation
1.0%
Inflation
2.5%
Inflation
5%
Inflation erodes the real value of investments. The need to think in real rather than nominal terms and to hedge against inflation risks arises…
Inflation-Linked Bonds may provide protection
Source: AXA IM – For illustrative purposes only
90.44
81.79
73.97
77.63
60.27
46.79
100
59.87
35.85
21.46
0
20
40
60
80
100
0 10 20 30
Re
al
Va
lue
Years
1,0% Inflation 2,5% Inflation 5,0% Inflation
The carry reflects the gain or loss realized on coupons by an investor over a given period as a result of holding the asset rather than investing the corresponding amount in the money market
Important for linkers as carry varies according to price evolution. Linkers have both “snowball” coupons and principal.
Premium received every year by the buyer of the indexed bond in addition to inflation
If inflation is positive, then the real interest rate is lower than the nominal interest rate.
By this definition, real rates are not directly observable but can be deduced from nominal rates by using inflation, defined as the growth rate of inflation indices
Inflation-linked bonds
11
The breakeven is the inflation level for which an investment made in a linker equals an investment made in a nominal bond.
Breakeven reflects the expected rate of inflation until the bond’s maturity, embedded in market prices
However it is also influenced by supply / demand imbalances, the inflation risk premium and relative liquidity.
Performance drivers: putting all together
rates
Breakeven Indexation Real
Inflation
Source: AXA IM – For illustrative purposes only
Inflation
The inflation-linked bond market today
12
Over $3 trillion market cap
1991
1997
1996
1964
2002 1966
1967
2002
2002
1998
1981 2006
1994
2004
2006
1964
2012
2014
2002
2004
2007
2013
2015
2007
2011
2004
1995
1984
Source: AXA IM / Barclays as at end of June 2017. Years relate to introduction by a country of inflation-linked bonds.
Developed
Countries
30% - 50%
5%-10%
2%-5%
<2%
Emerging
Countries
>50%
5%-15%
1%-5%
<1%
MARKET SIZE (IN %)
2017
The inflation-linked bond market today
Sovereign Issuance in both DM and EM markets
13
Source: AXA IM / Bloomberg Barclays Indices as at end of June 2017. Excludes bonds sub-1y maturity
US UK France Germany Italy Spain Sweden Denmark Canada Australia New Zealand Japan
Generic name Treasury Inflation
Indexed Securities,
TIIS, TIPS
United Kingdom
Index-Linked
Gilts
OATi, OAT€i,
BTAN€i OBL€I DBR€i BTP€i SPGB€i
Swedish Govt
Index-Linked DGBi
Canadian Real
Return Bonds
Australian
Capital Indexed
Bonds
New Zealand
Inflation indexed
Bonds
JGBi
Local Market Value (bn) 1,226 622 230 66 157 41 237 41 74 45 17 7,080
USD Market Value ($bn) 1,226 805 261 75 178 46 28 6 57 34 13 63
No Bonds outstanding 38 27 16 5 11 5 8 1 8 7 4 6
First issue date 1 997 1 981 1 998 2 006 2 003 2 014 1 994 2 012 1 991 1 985 1 995 2 004
Linking Index CPI All urban
consumers NSA RPI
French CPI ex-
tobacco Euro
HICP ex-tobacco
Euro HICP
ex-tobacco
Euro HICP ex-
tobacco
Euro HICP
extobacco CPI NSA
Denmark
CPI NSA
CPI All Items
NSA All groups CPI All groups CPI
Nationwide
CPI General
ex-Fresh
Food
Brazil Mexico Argentina Chile Colombia Israel South Africa Turkey Poland South Korea Thailand Russia
Generic name NTN-Bs, NTN-Cs Udibonos
Argentinean
Government
Inflation- Linked
BCU TES Galil, ILCPI South Africa
Index-Linked TURKGB POLGB KTBi THAIGB RFLBI
Local Market Value (bn) 903 1,381 143 5,202 3,758 180 484 158 5 11,459 210 183
USD Market Value ($bn) 273 76 8 8 1 51 37 44 1 10 6 3
No Bonds outstanding 14 8 2 9 2 11 10 13 1 5 2 1
First issue date 2 000 1 996 2 003 2 002 2 002 2 006 2 000 2 007 2 003 2 007 2 011 2 015
Linking Index IPCA, IGPM Unidas de
Inversion (UDI)
CER Consumer
Price Index
UF Consumer
Price Index
UVR Consumer
Price Index Israel CPI
South Africa CPI
NSA Turkish CPI Polish CPI Korean CPI Thailand CPI Russia CPI
Over $2.8 tn in Developed Markets
Over $500 Bn in Emerging Markets
0.0
0.5
1.0
1.5
2.0
2.5
3.0
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2
2012 2013 2014 2015 2016
in B
ns
E
UR
Average Daily Gross Trading Volume
France Germany Spain
The inflation-linked bond market today
Market liquidity
14
Source: AXA IM. For US TIPS New York Federal Reserve as of 30/06/2017. – For EURO inflation linked bonds (excluding Italy) : Agence France Trésor
– AFT, Deutsche Finanzagentur, and Secretaría General del Tesoro y Política Financiera. As of 31/12/2016 (latest available) for illustrative purpose
only. Developments of the past offer no guarantee and are no indicator for any future returns or trends.
*ECB = European Central Bank
► The liquidity in the US TIPS market keeps improving with an
average daily turnover higher than USD20 billions and beating
all time records
► Around 50% of the volume traded are in bonds with maturities
shorter than 6 years
► Trading volumes are stable in the €-Area over the past 5 years
► We are seeing a greater differentiation in liquidity between the older
bonds becoming relatively less active and than newly issued ones
that would concentrate more turnover
Inflation linked bonds Liquidity have been improving in advanced economies as the asset class has appealed investors’ demand
0
5
10
15
20
25
30
$b
n
US TIPS Average Daily Trading Volume
15
Introduction to the Inflation-Linked bonds market
Outlook for the inflation-linked bonds markets
AXA World Funds Global Inflation Bonds
AXA World Funds Global Inflation Short Duration Bonds
AXA World Funds Euro Inflation Bonds
AXA World Funds Universal Inflation Bonds
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TRANSITORY FACTORS HAVE WEIGHED ON INFLATION
Inflation Outlook
Inflation normalization with a slight rebound into the year end
INFLATION CONTINUES TO
NORMALIZE
OPPORTUNITIES IN INFLATION-LINKED
BONDS
Source: AXA IM as of September 2017. These views can change over time. Due to the subjective nature of these analysis and opinions, they are not
necessarily used or followed by all AXA IM Paris’ management teams who may act based on their own opinions and as independent departments within
the Company. 16
Inflation has been curbed by one-off factors and not by
permanent forces.
There is no evidence so far that the digital economy is shaping the current inflation dynamics.
Instead statistical adjustments and politics are to blame and
the recent down move is expected to be reversed.
Inflation has surprised to the upside in the Eurozone and has been running slightly below the market consensus in the US.
We expect US inflation to move back up towards 2.2% to 2.4%
next year.
In the Euro Area Inflation is expected to remain below the 2% target and close to 1.4%.
Inflation breakevens offer value as they tend to be driven by
realized inflation and are currently trading below inflation
forecasts.
There are sweet spots in real yields as Central banks adjust
their monetary policy in reaction to higher inflation.
We find tactical opportunities in inflation breakevens and short duration inflation linked bonds
Early 2017 US Core inflation is the result of transitory political and statistical noise.
We do not see an impact of the « digital economy » in those number.
Wireless telephone services component has pulled down Core CPI 0.25% alone. Prices are unchanged but data included in the plans has increased leading to a “quality adjustment”
Medical care prices were weak during spring just as the Trump administration was trying to push forward a new healthcare bill
While we expect some moderation in rents (new buildings increasing apartment supply) we still expect it to support Core CPI in the USA and Core US inflation to move higher than Core € Area Inflation
Early 2017 negative US inflation surprises are only transitory
Negative surprises were due to methodology and politics not “digital economy disruptions”
17
Source: AXA IM Forecasting as of September 2017.
The above represents our current market views only and does not constitute investment advice.
No evidence in the inflation numbers of the digital economy driving down prices so far
Lower goods prices inflation is the result of globalization not “digitalization”. This isn’t new and has been around for decades.
Inflation will continue to normalize as the output gap is closing
The Phillips curve is not dead. Its “slope” has been stable since the late 1990s according to a 1995 study from Blanchard, Cerutti & Summers.
The Phillips Curve isn’t dead
Economic expansion continues to lead to higher prices
18
The closing output gap in the US has led to higher inflation
10 year change in US inflation by component
Goods (essentially imported)
Services
An
nu
ali
ze
d r
ate
of
ch
an
ge
%
Source: AXA IM Forecasting as of September 2017. The above represents our current market views only and does not constitute investment
advice.
Link to Blanchard, Cerutti & Summers 2015 article on the Phillips Curve https://www.imf.org/external/pubs/ft/wp/2015/wp15230.pdf
The oil market is balanced
Barring any supply disruption, oil prices should not be a significant inflation driver
19
Source: AXA IM as of 29/09/2017, IEA Oil Market report 13/09/2017 https://www.iea.org/oilmarketreport/omrpublic/currentreport/ – for illustrative purpose
only. Developments of the past offer no guarantee and are no indicator for any future returns or trends.
US Energy Information Administration. *For scenario purposes, IEA assumes OPEC/non-OPEC output cuts implemented as announced
OPEC = Organization of the Petroleum Exporting Countries
OPEC countries are complying with output cuts
OPEC members combined production is close to unchanged from late 2015
The number of US Shale oil rigs has been growing recently
Shale oil remains a mixed picture in the US with only one (the “Permian in West Texas) of the main shale oil drilling basins seeing more rigs
We do not expect oil prices to significantly influence inflation from here
Current Brent price is close above end of 2016 prices
This is expected to be moderately positive into year end.
Oil prices and production
Inflation Breakevens
20
Realized inflation is the main driver of inflation expectations
Source: AXA IM, Bloomberg as at 29/09/2017 – for illustrative purpose only. Developments of the past offer no guarantee and are no indicator for any future
returns or trends.
We expect inflation breakevens performance to track realized inflation.
Even « normal » inflation is an issue for the bond market
Nominal rates are trading below the current rate of inflation
21
US : Nominal Rates vs Core Inflation (%) Europe : Nominal Rates vs Core Inflation (%)
Inflation “unprotected”
Rising inflation has historically been associated with rising interest rates
Inflation “protected”
Source: Bloomberg, 29/09/2017. Developments of the past offer no guarantee and are no indicator for any future returns or trends.
Brexit inflation update
Brexit related imported inflation nears its peak, short term upside from higher oil prices
22
The GBP depreciation has been translated into rising imported inflation in the UK
The time for the currency depreciation to feed into higher inflation is generally 12 to 18 months. This suggests that we are near the peak of imported inflation in the UK
In our opinion, it will take 3 to 6 months at least before UK inflation cools down. In the meantime oil prices will drive inflation breakevens
Recent oil price strength may lead to higher inflation breakevens as the UK economy is one of the most sensitive to exogenous shocks among advanced economies
Source: AXA IM Forecasting as of September 2017.
The above represents our current market views only and does not constitute investment advice.
Real yields
23
3 regimes of real yields
While reasonable to expect real yields to increase, expectations of higher rates
should be scaled
From an economic perspective real rates are a
proxy for long term potential growth.
In practice, real rates market value is influence not
only by their fair value but also by flows, liquidity
and term premium.
We expect lower real yields than in previous cycles
Due to aging populations, lower potential growth
and higher debt loads and proactive Central Banks
real yields can increase but their long term value
should stabilize at a lower level than in previous
cycles.
We see limited upside to US real yields but are more concerned by UK real yields that have
reached historical lows
Source: Barclays Indices, AXA IM as of 29/09/2017 and Federal Reserve Bank of San Francisco: http://www.frbsf.org/economic-
research/publications/economic-letter/2011/october/unconventional-monetary-policy-lessons/ Developments of the past offer no guarantee and are no
indicator for any future returns or trends.
QE = Quantitative easing
Pre-crisis Real Yield
Pre-crisis Regime: Real yields were positive sustained by steady growth and conventional monetary policies
New normal regime: 100bp lower than pre crisis level due to lower growth potential and higher debt levels in
the economy
QE Regime: Real yields have been estimated to fall by 100bp for every 25% of GDP in Central Bank asset
purchases
New normal
QE
Inflation Alpha Group
24
Key Views – September 2017 Forecasting
Source: AXA IM, Fixed Income, September 2017. The overweight/underweight positions are compared to Barclays World Govt Inflation-Linked
index. These strategies can change over time. Due to the subjective nature of these analysis and opinions, they are not necessarily used or
followed by all AXA IM Paris’ management teams who may act based on their own opinions and as independent departments within the Company.
US TIPS is our preferred inflation linked bond market
UK Linkers remain expensive in our view
Selective opportunities in Euro Area inflation linked bonds
We expect € Area inflation normalization to be more gradual than in the USA because of a growing labour force keeping wage pressures contained and as the Euro is stronger than the USD due to the large positive German current account balance. We expect € Area inflation to remain short of the 2% target.
As the ECB is likely to normalize its monetary policy stance, we continue to see opportunities in short term Italian and Spanish inflation linked bonds but remain warry of adding too much duration through longer maturities inflation linked bonds.
UK inflation nears its post-Brexit high as imported inflation generally takes 12 to 18 months to materialize.
Due to massive domestic demand for inflation linked bonds from pension funds UK Linkers are expensive to carry.
The recent oil price increase may attract demand for UK inflation breakevens over the short term while over a longer horizon we find them more expensive than other markets, for instance the US.
US inflation will likely rebound into year end and is expected to reach 2.2% - 2.4% in Q1 2018.
We see value in US TIPS inflation breakevens as inflation normalization should attract demand and because market pricing of future inflation remains depressed.
While our inflation breakeven positioning is tactical by nature, we continue to favour short duration TIPS as a more strategic holding thanks to a better carry and roll down.
Our Credendials
Why AXA IM for Inflation-linked bonds funds?
Scale
Team
Performance
A dedicated, highly experienced team managing UK, Euro and Global inflation-linked funds closely supported by a diverse range of fixed income teams (PEG, Portfolio Managers, analysts, Trading, PSU, etc.)
Over 30 years experience as a firm managing inflation-linked assets. One of the first European asset managers to offer a dedicated inflation-linked bond fund in 1983
A proven track record highlighted by consistent investment performance over various market cycles. Our AXA WF Global Inflation Bonds fund2 has generated a cumulative net return in Euro of 10.92% over the last 5 years.
Our significant size ensures higher status with counterparties and access to policy makers & official market participants: €21.4bn in global inflation-linked assets under management in our AXA IM Fixed
Income platform and close €5.1bn invested in our flagship funds1
Diverse client base across all market segments: managing both LDI and benchmarked solutions
(1) The flagship funds gather AXA World Funds Global Inflation Bonds, AXA World Funds Global Inflation Short Duration Bonds, AXA World Funds
Universal inflation Bonds, AXA World Funds Euro Inflation Bonds funds and AXA Sterling Index Linked Bond Fund as of 29/09/2017 (2) AXA World
Funds Global Inflation Bonds I EUR Share as of 29/09/2017. 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. For illustrative purpose only
LDI = Liability Driven Investment PEG = Portfolio Engineering Group, PSU = Product Specialist Unit
Ideas Market leaders in terms of inflation-linked product development, with the creation and launch of the “Redex” shareclass in 2010, which aims at lowering the risk of nominal interest rate changes and creating ad-hoc solution for a diverse client base.
Risk monitoring Continual monitoring of risks embedded in our strategies coming from the breakeven exposure, the
Term structure (Shift, Twist and Butterfly) and interest rate duration across currencies and others.
25
Global Risk
Management Team
Over 200 professionals to ensure portfolios are managed within the strategy’s stated objectives and constraints
Global Rates Investment Team
The inflation linked bond portfolio management team is part of AXA IM Fixed Income Global Rates Team
12 investment professionals including 1 UK Inflation expert.
Portfolio Solutions Team
FI Trading Desk
Global team of 8 specialized engineers
embedded within each local Fixed
Income team and working side-by-side
with portfolio managers
25 Fixed Income traders based in every major market, delivering best execution
Core Investment Team
People & Management Structure
26
The Key Inflation Investment Professionals
Source: AXA IM as of 29/09/2017 (latest available)Information about the staff team at AXA Investment Managers (AXA IM) is only informative. We do not
guarantee the staff remain employed by AXA IM and exercise or continue to exercise in the team of AXA IM
A team bringing together complementary skill sets and deep, relevant experience
Jonathan Baltora Head of Inflation, Senior portfolio manager
10 years of industry experience.
Joined AXA IM in 2010
Lead Manager of open-ended inflation-linked bonds’ funds
Visna Nhim Portfolio Manager, Paris 8 years of industry experience.
Joined AXA IM in 2009
Elida Rhenals Portfolio Manager, Paris 6 years of industry experience.
Joined AXA IM in 2013
Marion Le Morhedec Head of Business Development for AXA IM Fixed Income, Paris
20 years of industry experience. Joined AXA IM in 2003
Former Deputy Head of Global Rates team in Paris, Marion has been appointed Head of Business Development in November 2016. She will maintain an advisory role in her new functions.
Taking advantage of our Inflation-linked bonds offer
27
OECD Countries SINGLE MARKET EXPOSURE
GDP WEIGHTING
AXA World Funds
Global Inflation
Bonds AUM: 3.34 Bn €
Launch
date:13/09/2005
AXA World Funds
Euro
Inflation Bonds AUM: 215 M€
Launch
date:13/09/2005
AXA World Funds Universal
Inflation Bonds AUM: 12.9 M$
Launch date: 17/07/2012
Investors can take advantage of our diversified offering by mixing our available funds & share classes to achieve their desired positioning.
AXA Sterling Index
Linked Bond Fund AUM: 284 M£
Launch
date:24/09/2004
AXA World Funds
Global Inflation
Bonds REDEX
AXA World Funds
Euro Inflation
Bonds REDEX
DESIRED
EXPOSURE
INVESTMENT
STRATEGY
TACTICAL
TOOLS
DURATION MANAGEMENT
SOLUTION
BENCHMARK
Emerging & Developed
Countries
Optimised GDP weighting,.
Designed to perform in a low rates
environment
Potential investment option to diversify the fixed income part of an asset allocation
Hedged FX exposure
EXPOSURE TO REAL YIELDS, BREAKEVEN & REALISED INFLATION
Past performance is not a guide to future performance - The most recent prospectus and Key Investor Information Document of those funds are available
to all investors and must be read prior subscription, and the decision whether to invest or not must be based on the information contained in the
prospectus and Key Investor Information Document . AUM Data are as at 29/09/2017 – source: AXA IM Paris. This slide can not be read separately from
the general presentation with the characteristics of the below funds, including its investment objectives, its fees and risks associated
AXA World Funds
Global Inflation Short
Duration Bonds AUM: 1.36 Bn$
Launch date:16/02/2016
All Maturities Short Duration Focus Europe UK
Investment Philosophy
Our active management style for inflation linked bonds
Investing in Inflation-Linked Bonds is the
core of our strategy
Our quarterly forecasting session is at
the heart of our strategy. We define the
strategy that will be implemented during
the following quarter with the flexibility
to adapt to changing market
conditions.
Medium Term Focus
Invest in inflation linked bonds and the
nominal bonds issued by the same
issuers as part of "Breakeven" Trades.
We avoid investing in other asset
classes such as nominal credit, equities
or commodities (the latter are forbidden).
Inflation linked bonds
During periods of falling inflation we
allocate to nominal bonds in order to
limit the impact of falling coupons.
Fine-tuning indexation
Dedicated and liquid
Adapt to changing market conditions and be able to capture
opportunities and achieve our performance generation
objective: we aim at generating performance on a monthly
basis avoiding "extreme" positioning to ensure consistency
over time.
Flexible use of the risk budget
Source: AXA IM. No assurance can be given that the strategy will be successful or that investors will not lose some or all of their capital
28
No active currency trade, limited use of derivatives and a
focus on allocation across inflation linked bond
markets. We privilege the active allocation in the most
liquid bonds or “on the run” securities. This grants a
better liquidity profile than passive approaches that uses
derivatives or older and less liquid securities
29
Define macro
environment
Define active
strategies
Portfolio
construction
Risk
monitoring
1 2 3
4 5 Continuous
strategy review
*Alpha Groups: small sub teams of the FI team split by expertise: country allocation/term structure/inflation/investment grade/high yield/emerging markets.
MVST: Macro, Valuation, Sentiment, Technicals
Top-down inputs combine to
form a global macro view, used
as a framework by each Alpha
Group*
Alpha Groups define market
expectations and active
strategies using MVST analysis
Active portfolio management
driven by continuous MVST
analysis and performance review
Alpha Group forecasts /
recommendations feed portfolio
construction, ensuring efficient
use of risk budget
Risk is continuously monitored,
with multiple levels of control
Global investment process Strong top-down focus
Portfolio construction aims at driving performance
30
Introduction to the Inflation-Linked bonds market
Outlook for the inflation-linked bonds markets
AXA World Funds Global Inflation Bonds
AXA World Funds Global Inflation Short Duration Bonds
AXA World Funds Euro Inflation Bonds
AXA World Funds Universal Inflation Bonds
Reference Material
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What and When?
Understanding our Global inflation strategies
Global Inflation Bonds REDEX
Global Inflation Short Duration Bonds
Maturity
Performance
Engine
When?
All Maturities
HIGH (~ 12 years)
1. Rates & Duration
2. Inflation indexation (residual)
Real Interest rates ↓ or =
Positive Inflation
All Maturities
REDUCED by selling 10yr interest rate futures (~ 2
years)
Inflation breakeven (expectations)
Interest rates ↑
Rising inflation breakevens
Short Maturities
LOW (~ 3 years)
1. Realized Inflation 2. Duration
Positive realized Inflation
Residual interest rate impact
Duration
Exposure
This document is intended exclusively for professional clients under MiFID. These strategies can change over the time. For illustrative purpose
only. No assurance can be given that the strategy will be successful or that investors will not lose some or all of their capital. Depending on the
investment strategy used the information contained herein may be more detailed than the information disclosed in the prospectus. Any such information
(i) does not constitute a representation or undertaking on the part of the investment manager; (ii) is subjective and (iii) may be modified at any time within
the limits provided in the fund prospectus
Interest rates risk Falling / Low inflation
Interest rates risk Potentially negative carry Falling / Low inflation
Interest rates risk Falling / Low inflation
Specific
Risks
Global Inflation Bonds
All Maturities
HIGH (~ 13 years)
1. Rates & Duration
2. Inflation indexation (residual)
Real Interest rates ↓ or =
Positive Inflation
31
AXA World Funds Global Inflation Bonds Portfolio Overview
Highly rated fund and diversified mitigation against inflation
A purist fixed income product which consists to invest mainly in inflation linked bonds
Key performance engines: real yield, breakeven and carry
A top-down judgmental approach and a disciplined investment process
Hedged currencies
Source: AXA IM. * Nominal bonds: Conventional bond as opposed to inflation linked bonds that paid an inflation-adjusted value. **Morningstar Category = Global Inflation-Linked Bond - EUR Hedged. For the I Capitatalisation share class. Morningstar: references to league
tables and awards are not an indicator of future rankings in league tables or awards. Information contained in this document may be updated from time to time and may vary from previous or future published versions of this document. As of January 2016
***Extract from the KIID – I EUR Share class as at 17/02/2017 Please refer to the prospectus for all additional risks.
One of the longest track record in this category**
RedEx share class: tool which objective is to reduce and manage duration representing now nearly 50% of the fund (as at 30/09/2017)
Dynamic exposure mainly to inflation-linked bonds issued by OECD governments and for a maximum 1/3 in nominal bonds*.
Active asset allocation across inflation linked bonds issuers Asset allocation Active
of potential performance Sources
consider investing Reasons to
Risks***
Strengths
The risk category is calculated using historical performance data and may not be a reliable indicator of the Sub-Fund's future risk profile.
The risk category shown is not guaranteed and may shift over time. The lowest category does not mean risk free.
The capital of the Sub-Fund is not guaranteed. The Sub-Fund is
invested in financial markets and uses techniques and instruments which are subject to some levels of variation, which may result in gains or losses.
Potentially lower risk Potentially higher reward
Lower risk Higher risk
Risk and Reward profile
1 2 3 4 5 6 7
32
AXA World Funds Global Inflation Bonds Monthly portfolio overview
Source: AXA IM as at 29/09/2017. Data is unaudited and sourced from our front office portfolio management system Synview. Please note that the yield calculations are based on the portfolio of assets and may NOT be representative of what clients invested in the fund may receive as a distribution yield.
Gross yield figures quoted will vary in the future and are not guaranteed. The fund AXA World Funds Global Inflation Bonds does not have a reference index. The fund’s performance indicator, 100% Barclays Capital World Government Inflation-Linked Bond Hedged EUR index, is given as a basis for comparison only. "Depending on the investment strategy used the information contained herein may be more detailed than the information disclosed in the prospectus.
Any such information (i) does not constitute a representation or undertaking on the part of the investment manager; (ii) is subjective and (iii) may be modified at any time within the limits provided in the fund prospectus *Excludes futures, cash, swaps and FX hedges. Derivatives gross exposure excludes FX
forwards
Breakdown by Country (in active Market weight)
Breakdown by maturity (in market weight) Breakdown by Country (in active duration, years)
33
Fund Performance
Indicator
AUM €3 342Mn
Average Years to Maturity 13.49 13.44
Real Yield -0.27% -0.46%
Standard Share Class Duration 12.47 12.56
Redex Share Class Duration 2.05
Average Linear Rating AA AA
Cash & FX Position -0.55%
Number of Positions* 115 136
Derivatives gross exposure -2.95%
AXA World Funds Global Inflation Bonds
34
Evolution of the country allocation
Source: AXA IM as at 29/09/2017 Data is unaudited and sourced from our front office portfolio management system, Synview. The fund AXA World Funds Global Inflation Bonds does not have a reference index. The fund’s performance indicator, 100% Barclays Capital World Government Inflation-
Linked Bond Hedged EUR index, is given as a basis for comparison only. For illustrative purpose only. Others include Australia, Canada, Japan, Denmark , New Zealand , Sweden cash and mutual funds
Country Allocation of the Fund (% market weight)
Active Country Allocation vs Performance Indicator
AXA World Funds Global Inflation Bonds I EUR
35
Performance
Source: AXA IM/UBS Delta Paris. As at 29/09/2017, 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 portfolio first NAV date was on 13/09/2005. **The fund AXA World Funds Global Inflation
Bonds does not have a reference index. The fund’s performance indicator, 100% Barclays Capital World Government Inflation-Linked Bond Hedged EUR index, is given as a basis for comparison only. Performance calculations are gross of fees. Performance calculations are based on the reinvestment of
dividends, The client’s return will be reduced by the management fees and other expenses. The fund was launched on 13/09/2005
Performance analysis is relative estimated performance based on unaudited data sourced from UBS Delta.
Gross Cumulative Performance (index=100, 13 sept 2005) Performance Analysis YTD
Positioning Q3 2017
Inflation linked bond markets were driven by the Central Banks messages as well as the inflation normalization dynamics across all markets
In the US, we added duration in front end TIPS as they offer a good trade off between lower duration and cheaper breakevens. We also entered and reinforced a tactical long breakeven positioning as we see inflation picking up into the year end.
In the Euro Area, we had a short duration positioning, but we remained overweight in the short maturity Italian linkers for carry concerns.
We reduced our short duration stance in the UK, but we remained underweight for valuation concerns. We gave although a tactical long duration breakeven as they have undershot the currency depreciation and the oil rally.
95
105
115
125
135
145
155
165
175
Portfolio Performance Indicator
Gross Cumulative
PerformanceYTD 1M 3M 1Y 3Y 5Y 2016
Gross Performance -0,43% -1,71% 0,02% -3,08% 10,56% 13,27% 8,98%
Performance indicator* -0,60% -1,75% -0,03% -3,18% 9,31% 11,31% 8,96%
Excess Return 0,17% 0,03% 0,05% 0,11% 1,26% 1,95% 0,02%
Fund’s volatility 4,33% 5,89% 5,06% 4,73% 5,53% 5,37% 6,22%
Tracking error 0,36% 0,58% 0,55% 0,47% 0,42% 0,47% 0,63%
Information Ratio 0,61 0,59 0,35 0,23 0,93 0,76 0,03
-15
-10
-5
-
5
10
15
Total InterestRates
Inflation Spread Carry
Bp
s
Q4 2016 Q1 2017 Q2 2017 Q3 2017
Standard and Redex* shareclasses performance
36
AXA World Funds Global Inflation Bonds
Source: AXA IM, Barclays as at 29/09/2017. Unaudited data. Past performance is not a guide to future performances, Performance calculations are net of
fees. Performance calculations are based on the reinvestment of dividends. The fund AXA World Funds Global Inflation Bonds does not have a reference
index. The fund’s performance indicator, 100% Barclays Capital World Government Inflation-Linked Bond Hedged EUR index, is given as a basis for
comparison only. These are estimated data for illustrative purpose only.
*Please refer to Slide 70 for further explanations
Alpha: Net excess return of the fund I EUR over the performance indicator
AXA World Funds Global Inflation Bonds
37
AUM Evolution by share class since inception of REDEX1 shareclass
The REDEX share class2 has helped our clients to manage their duration within their inflation exposure
Since 2013 we have seen a trend of an increasing number of clients switching from standard to REDEX share classes
The REDEX share classes currently represent 49% of total AUM
Source: AXA IM as at 29/09/2017. 1In order to comply with the recommendation laid out by the regulator and therefore with the transitional provisions
issued by ESMA RedEx shares will not accept any new investment from new investors by 30 July 2017 and will not accept any new investment from
existing investors by 30 July 2018. 2Please refer to Slide 40 for risk disclosure.
0
300
600
900
1 200
1 500
1 800
2 100
2 400
2 700
3 000
3 300
3 600
3 900
4 200
4 500
Mil
lio
ns
€
Standard Shareclass AUM REDEX Shareclass AUM Portfolio Total AUM
AXA World Funds Global Inflation Bonds I EUR
38
General Characteristics
Potentially lower risk Potentially higher reward
Lower risk Higher risk
Risk and Reward profile The risk category is calculated using historical
performance data and may not be a reliable indicator of
the Fund’s future risk profile. The risk category shown is
not guaranteed and may shift over time. The lowest
category does not mean risk free. Please refer to the full
prospectus, to sections entitled «General Risk
Considerations» and «Special Risk Considerations» for
detailed statements of risks. The most recent risk
category, which may be different for each share class, is
available in the latest Key Investor Information
Document.
1 2 3 4 5 6 7
Main Characteristics
Investment Objective Seek performance through dynamic exposure mainly to inflation-linked bonds issued in the OECD
Investment Horizon 3 years
Investment Zone Global
Investment Universe Inflation-linked bonds and of any other related debt securities issued by OECD governments,
corporations or public institutions worldwide
Inception Date 13 September 2005
Legal Form Sub-fund of AXA World Funds, a Luxembourg-based SICAV
Reference Currency EUR
Type of Share Capitalisation and Distribution
Valuation Daily
Subscription / Redemption Forward price, daily (D) before 3:00 pm (CET)
Settlement D+3 working days
Management Company AXA Funds Management S.A. (Luxembourg)
Investment Manager AXA Investment Managers Paris
Custodian State Street Bank Luxembourg S.A.
Source: AXA IM as of February 2017
AXA World Funds Global Inflation Bonds
39
Other Information
For all hedged classes (H): This share is partially protected against exchange rate fluctuations (at least 95% hedged) between the fund’s reference
currency and that of the share class. (1) Maximum Annual Fees linked to reduction of duration exposure of the RedEx share classes. As of July 2016
SHARE CLASS* A A REDEX E E REDEX I I REDEX
Investor Type All investors All investors All investors
More specifically
designed or
Institutional
Investors only
For Institutional
Investors only
For Institutional
Investors only
ISIN Code Capitalisation
EUR LU0266009793 LU0482270153 LU0266010296 LU0482270401 LU0227145629 LU0482270666
CHF (H) LU0397279430 LU0482270237 LU0397279356 LU0482270740
GBP (H) LU0420068156 LU0420068404 LU0482271045
USD (H) LU0266009959 LU0482269908 LU0266010452
ISIN Code Distribution
EUR LU0451400831 LU1360213893 LU0227145975
GBP (H) LU0814370507
USD (H) LU0266010379
Minimum initial Subscription None None None None 100 000 100 000
Minimum Subsequent Investment None None None None 10 000 10 000
Maximum Subscription Fees 3.00% 3.00% None None None None
Maximum Redemption Fees None None None None None None
Maximum Annual Management Fees 0.60% 0.60% + 0.05%1 0.60% 0.60% + 0.05%1 0.30% 0.30% + 0.05%1
Real Annual Management Fees 0.60% 0.60% + 0.05%1 0.60% 0.60% + 0.05%1 0.30% 0.30% + 0.05%1
Maximum Distribution Fees None None 0.65% 0.65% None None
* Not Exhaustive
Special risk consideration
40
Source: Prospectus
Derivatives Risk and Leverage: The Sub-Fund may use both listed and OTC derivatives for investment or hedging purposes, but also repurchase or securities lending agreement. These instruments are volatile and may be subject to various types of risks, including but not limited to market risk, liquidity risk, credit risk, counterparty risk, legal risk and operations risks. In addition, the use of derivatives can involve significant economic leverage and may, in some cases, involve significant risks of loss. Furthermore, Investments in OTC derivatives may have limited secondary markets liquidity and it may be difficult to assess the value of such a position and its exposure to risk. For these reasons, there can be no guarantee that strategies using derivatives instruments will meet their expected target.
Redex share class Risk factor relating to interest rate: Interest rate risk involves the risk that, when interest rates increase along the curve, as the market value of fixed-income securities tends to decline, as a result the Net Asset Value of standard shares tends to decrease. Conversely, when interest rates decline along the curve, the market value of fixed-income securities tends to increase, as a result, the Net Asset Value of the standard Shares tend to increase. Long-term fixed-income securities will normally have more price volatility because of this risk than short-term securities. The aim of the listed derivatives overlay strategy implemented at the Redex Share Class level is to reduce the exposure to interest rates parallel shifts along the curves. Therefore, the impact of interest rates parallel shifts on the Redex Share Net Asset Value tends to be reduced compared to the impact of such move on the standard Shares. When interest rates increase, as the market value of fixed-income securities tends to decline, the market value of the overlay strategy tends to increase, as a result the impact of the interest rates increase on the value of the Redex Shares tends to be more limited. Conversely, when interest rates decline, the market value of fixed-income securities tends to increase, and the market value of the overlay strategy tends to decrease as a result the impact of the interest rates decrease on the value of the Redex Shares tends to be more limited.
Risks of Global Investments: Investments in securities issued or listed in different countries may imply the application of different standards and regulations (accounting, auditing and financial reporting standards, clearance and settlement procedures, taxes on dividends…). Investments may be affected by movements of foreign exchange rates, changes in laws or restrictions applicable to such investments, changes in exchange control regulations or price volatility.
41
Introduction to the Inflation-Linked bonds market
Outlook for the inflation-linked bonds markets
AXA World Funds Global Inflation Bonds
AXA World Funds Global Inflation Short Duration Bonds
AXA World Funds Euro Inflation Bonds
AXA World Funds Universal Inflation Bonds
Reference Material
I
II
III
p.3
p.15
p.67
A
B
C
D
p.30
p.41
p.55
p.62
AXA World Funds Global Inflation Short Duration Bonds Portfolio Overview
Low duration ensures a higher correlation of the strategy total return to realized inflation in a low rates environment
A purist fixed income product which consists to invest mainly in inflation linked bonds
Focus on inflation indexation, prior to duration
Flexible allocation to inflation linked to maximize coupons
Source: AXA IM. *Extract from the KIID – I USD Share class as at February 2017 Information contained in this document may be updated from time to time and may vary from previous or future published versions of this document.
Please refer to KIID for all additional risks.
Active, Simple and Transparent with a proven track record: using the same set of management, current management objectives and active lee ways as in our flagship AXA World Funds Global Inflation Bonds… with a shorter duration focus
A top-down judgmental approach and a disciplined investment process
Dynamic exposure mainly to inflation-linked bonds issued by OECD governments , corporations or public institutions worldwide and invest in nominal bonds in anticipation of periods of lower inflation
Active asset allocation across inflation linked bonds issuers Asset allocation Active
of potential performance Sources
consider investing Reasons to
Risks
Strengths
The risk category is calculated using historical performance data and may not be a reliable indicator of the Sub-Fund's future risk profile.
The risk category shown is not guaranteed and may shift over time. The lowest category does not mean risk free.
The capital of the Sub-Fund is not guaranteed. The Sub-Fund is invested in financial markets and uses techniques and instruments which are subject to some levels of variation, which may result in gains or losses.
Potentially lower risk Potentially higher reward
Lower risk Higher risk
Risk and Reward profile
1 2 3 4 5 6 7
42
Central Banks inflation targeting has pushed interest rates to historically low levels.
In our discretionary approach, we believe that in such a context interest rates will
increase when Central Banks will be able to tighten monetary
policies…
…This should not happen before inflation accelerates
Short duration inflation linked bonds have special properties like posting a low historical correlation with nominal bond price swings.
Meanwhile it appears that short duration inflation linked bonds are more correlated to oil price developments.
Short duration inflation linked bonds
The inflation rate feeding the coupons is the same across all
maturities making short duration inflation linked bonds an
attractive proposition.
Strategy
Short
Indexation
… and
Inflation For a low yield
World
AXA IM has a long expertise in both short duration and in inflation linked bonds
Duration…
43
Source: AXA IM
Income generation is quite similar across the curve…
because the inflation rate paid our to investors is the same across all maturities!
…The difference is the result of long-end real yields being higher than short-end ones.
Given current low yields environment the buffer against rising yields provided by long maturities is lower than in the past.
Inflation Linked Bonds
44
Whatever the maturity, inflation indexation remains the same…
Source: AXA IM, Barclays as at 31/12/2016 – for illustrative purposes only. Developments of the past offer no guarantee and are no indicator for any future returns or trends.
-
0,50
1,00
1,50
2,00
2,50
3,00
3,50
2011 2012 2013 2014 2015 2016
%
US TIPS Annual Income
All Mat TIPS Income 1-5Y TIPS Income
Inflation Linked Bonds
45
Short-end inflation linked bonds are the most sensitive to oil price developments
Source: AXA IM, Barclays as at 29/09/2017 – for illustrative purposes only. Developments of the past offer no guarantee and are no indicator for any future returns or trends.
Short-end inflation linked bonds are the most sensitive to oil.
Across markets, US TIPS are also the most sensitive to oil prices and by extension inflation.
Ultra-long UK linkers are less correlated to rates than you may think.
Local pension funds are very active in the 30-year and longer maturities.
As you extend the maturity of your inflation linked bond holdings, the risk morphs from being very sensitive to oil and inflation into a more “bond-
like” instrument.
Short Duration Inflation Linked Bonds
46
Short duration inflation linked bonds performance is historically close to inflation itself
Performance
Source: AXA IM, Barclays as at 29/09/2017 – for illustrative purposes only. Developments of the past offer no guarantee and are no indicator for any future returns or trends.
Real Yields
47
Maturity Focus
Real yields are the premium that investors can lock on top of realized inflation
Real yields are correlated to nominal yields but less so fort short duration inflation linked bonds that are more influenced by oil prices than general duration developments.
Investors should aim at maximizing their real yields under the constraint of duration.
Current market conditions should favor short duration inflation linked bonds
We believe that current 1-5 Yrs real yields are higher due to lower oil prices and that the situation should normalize with inflation rebounding during 2017.
Source: AXA IM, Barclays as at 29/09/2017 – for illustrative purposes only. Developments of the past offer no guarantee and are no indicator for any future returns or trends.
It appears to us that there is a
diversification benefit with a global approach in inflation
linked bonds.
Short duration inflation linked bonds have roughly delivered more than half of all maturities performance for a third of the volatility.
Inflation Linked Bonds
48
Risk & Return picture
Source: AXA IM, Barclays as at 29/09/2017 – for illustrative purposes only. Developments of the past offer no guarantee and are no indicator for any future returns or trends.
Short duration inflation linked bonds
Barclays World Government Inflation Bonds 1-5 Year Index
49
World Govt Inflation-Linked 1-5Yrs on Bloomberg
BCIW6U Index USD Hedged
BCIW6E Index EUR Hedged
BCIW6H Index CHF Hedged
BCIW6B Index GBP Hedged
BCIW6I Index Income
BCIW6Y Index Annual Yield
BCIW6D Index Average Duration
BCIW6C Index Market Cap
Source: AXA IM, Barclays as at 29/09/2017 – for illustrative purposes only. Developments of the past offer no guarantee and are no indicator for any future returns or trends.
Weight (%) Maturity Band
Country 1-3Yrs 3-5Yrs Grand Total
AU 1,28 0,69 1,97
DE 3,12 3,12
ES 1,64 0,78 2,42
FR 6,67 5,74 12,41
GB 6,19 6,19
IT 5,17 4,55 9,73
SE 0,42 1,53 1,95
US 27,33 33,83 61,16
CA 1,05 1,05
Grand Total 51,84 48,16 100,00
Duration
Contribution Maturity Band
Country 1-3Yrs 3-5Yrs Grand Total
AU 0,03 0,03 0,06
DE 0,08 0,08
ES 0,04 0,03 0,07
FR 0,16 0,25 0,41
GB 0,15 0,15
IT 0,08 0,18 0,26
SE 0,01 0,05 0,06
US 0,57 1,35 1,92
CA 0,04 0,04
Grand Total 1,11 1,93 3,05
AXA World Funds Global Inflation Short Duration Bonds Portfolio overview
Source: AXA IM as at 29/09/2017. Data is unaudited and sourced from our front office portfolio management system. Please note that the yield calculations are based on the portfolio of assets and may NOT be representative of what clients invested in the fund may receive as a distribution yield. Gross yield figures quoted
will vary in the future and are not guaranteed. The fund AXA World Funds Global Inflation Short duration Bonds does not have a reference index. The fund’s performance indicator, Barclays Capital World Government Inflation-Linked 1-5 yr Bond Hedged USD index, is given as a basis for comparison only. Depending on the investment strategy used the information contained herein may be more detailed than the information disclosed in the prospectus. Any such information (i)
does not constitute a representation or undertaking on the part of the investment manager; (ii) is subjective and (iii) may be modified at any time within the limits provided in the fund prospectus *Includes FX Hedges **Excludes futures, cash and FX hedges. Derivatives gross exposure excludes FX forwards
Breakdown by maturity (in market weight)
Breakdown by Country (in active Market weight)
Breakdown by Country (in active duration)
50
Fund Performance
Indicator
AUM $1 363M
Average Years to Maturity 3.13 3.09
Real Yield -0.25% -0.60%
Duration (in years) 2.85 3.05
Average Linear Rating AA AA
Cash Position* 2.59%
Number of Positions** 36 33
Derivatives (gross exposure) -2.81%
AXA World Funds Global Inflation Short Duration Bonds
51
Evolution of the country allocation
Source: AXA IM as at 29/09/2017 Data is unaudited and sourced from our front office portfolio management system, Synview. The fund AXA World Funds Global Inflation Bonds does not have a reference index. The fund’s performance indicator, 100% Barclays Capital World Government Inflation-Linked Bond 1-5 years Hedged USD index, is given as a basis for comparison only. For illustrative purpose only. Others include Australia, Canada, Japan,
Denmark, Sweden cash and mutual funds
Country Allocation of the Fund (% market weight)
Active Country Allocation vs Performance Indicator
AXA World Funds Global Inflation Short Duration Bonds I USD
52
Performance
Source: AXA IM/UBS Delta Paris. As at 29/09/2017, 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 portfolio first NAV date was on 16/02/2016. **The fund AXA World Funds Global Inflation Bonds
does not have a reference index. The fund’s performance indicator, 100% Barclays Capital World Government Inflation-Linked Bond 1-5 yr Bond Hedged USD index, is given as a basis for comparison only. Performance calculations are gross of fees. Performance calculations are based on the reinvestment of
dividends, The client’s return will be reduced by the management fees and other expenses. The fund was launched on 16/02/2016.
Performance analysis is relative estimated performance based on unaudited data sourced from UBS Delta.
Gross Cumulative Performance (index=100 Feb 2016)
99,0
100,0
101,0
102,0
103,0
104,0
Portfolio Performance Indicator
Gross Cumulative
PerformanceYTD 1M 3M 1Y SL 2016*
Gross Performance 1,12% -0,04% 0,63% 1,48% 4,30% 3,15%
Performance indicator** 1,10% -0,05% 0,68% 1,36% 4,23% 3,10%
Excess Return 0,02% 0,01% -0,05% 0,13% 0,07% 0,05%
Fund’s volatility 1,11% 1,23% 1,13% 1,04% 1,28% 1,42%
Tracking error 0,15% 0,20% 0,31% 0,23% 0,32% 0,42%
Information Ratio 0,21 0,53 - 0,60 0,56 0,13 0,12
AXA World Funds Global Inflation Short Duration Bonds I USD
53
General Characteristics
Potentially lower risk Potentially higher reward
Lower risk Higher risk
Risk and Reward profile The risk category is calculated using historical
performance data and may not be a reliable indicator of
the Fund’s future risk profile. The risk category shown is
not guaranteed and may shift over time. The lowest
category does not mean risk free. Please refer to the full
prospectus, to sections entitled «General Risk
Considerations» and «Special Risk Considerations» for
detailed statements of risks. The most recent risk
category, which may be different for each share class, is
available in the latest Key Investor Information
Document.
1 2 3 4 5 6 7
Main Characteristics
Investment Objective seek performance by investing mainly in short duration inflation-linked bonds issued in OECD
countries, over a medium term period.
Investment Horizon 3 years
Investment Zone Global
Investment Universe Inflation-linked bonds and of any other related debt securities issued by OECD governments,
corporations or public institutions worldwide
Inception Date 16 February 2016
Legal Form Sub-fund of AXA World Funds, a Luxembourg-based SICAV
Reference Currency USD
Type of Share Capitalisation and Distribution
Valuation Daily
Subscription / Redemption Forward price, daily (D) before 3:00 pm (CET)
Settlement D+3 working days
Management Company AXA Funds Management S.A. (Luxembourg)
Investment Manager AXA Investment Managers Paris
Custodian State Street Bank Luxembourg S.C.A.
Source: AXA IM. *Extract from the KIID – I USD Share class as at February 2017
Information contained in this document may be updated from time to time and may vary from previous or future published versions of this document.
Please refer to KIID for all additional risks.
Special risk consideration
54
Source: AXA IM - Prospectus, May 2016
Risk linked to investment in inflation-linked bonds: Inflation-linked bonds are special types of indexed bonds that are tied to indices that are calculated based on the rates of inflation for prior periods. The value of inflation-linked bonds generally fluctuates in response to changes in real interest rates. Real interest rates are tied to the relationship between nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates might rise, leading to a decrease in value of inflation-linked bonds. Conversely, if inflation rises at a faster rate than nominal interest rates, real interest rates might decline and result in an increase in value of inflation-linked bonds.
If the Sub-Fund purchases inflation-linked bonds in the secondary market whose principal values have been adjusted upward due to inflation since issuance, the Sub-Fund may experience a loss if there is a subsequent period of deflation. Additionally, if the Sub-Fund purchases inflation-linked bonds in the secondary market whose price has been adjusted upward due to real interest rates increasing, the Sub-Fund may experience a loss if real interest rates subsequently increase. If inflation is lower than expected during the period the Sub-Fund holds an inflation-linked bond, the Sub-Fund may earn less on the security than on a conventional bond. If real interest rates rise (i.e. if interest rates rise for reasons other than inflation), the value of the inflation linked bonds in the Sub-Fund’s portfolio and the Net Asset Value of the Sub-Fund will decline.
Moreover, because the principal amount of inflation-linked bonds would be adjusted downward during a period of deflation, the Sub-Fund will be subject to deflation risk with respect to its investments in these securities and the Net Asset Value of the Sub-Fund may be adversely affected. There can be no assurance that such indices will accurately measure the real rate of inflation. Additionally, the market for inflation-linked bonds may be less developed or liquid, and more volatile, than certain other securities markets. There are a limited number of inflation-linked bonds that are currently available for the Sub-Fund to purchase, thus making the market less liquid and more volatile
Derivatives Risk and Leverage: The Sub-Fund may use both listed and OTC derivatives for investment or hedging purposes, but also repurchase or securities lending agreement. These instruments are volatile and may be subject to various types of risks, including but not limited to market risk, liquidity risk, credit risk, counterparty risk, legal risk and operations risks. In addition, the use of derivatives can involve significant economic leverage and may, in some cases, involve significant risks of loss. Furthermore, Investments in OTC derivatives may have limited secondary markets liquidity and it may be difficult to assess the value of such a position and its exposure to risk. For these reasons, there can be no guarantee that strategies using derivatives instruments will meet their expected target.
Risks of Global Investments: Investments in securities issued or listed in different countries may imply the application of different standards and regulations (accounting, auditing and financial reporting standards, clearance and settlement procedures, taxes on dividends…). Investments may be affected by movements of foreign exchange rates, changes in laws or restrictions applicable to such investments, changes in exchange control regulations or price volatility.
55
Introduction to the Inflation-Linked bonds market
Outlook for the inflation-linked bonds markets
AXA World Funds Global Inflation Bonds
AXA World Funds Global Inflation Short Duration Bonds
AXA World Funds Euro Inflation Bonds
AXA World Funds Universal Inflation Bonds
Reference Material
I
II
III
p.3
p.15
p.67
A
B
C
D
p.30
p.41
p.55
p.62
AXA World Funds Euro Inflation Bonds Portfolio Overview
Highly rated and diversified mitigation against inflation
A purist fixed income product which consists to invest mainly in inflation linked bonds
Key performance engines: real yield, breakeven and carry
A top-down judgmental approach and a disciplined investment process
Source: AXA IM. * Nominal bonds: Conventional bond as opposed to inflation linked bonds that paid an inflation-adjusted value. **Please refer to Slide 70 for further explanations
***Extract from the KIID – I EUR Share class as at February 2017 Please refer to the prospectus for all additional risks.
Benefit from the experience and the management of AXA World Funds Global Inflation Bonds
RedEx share class**: tool which objective is to reduce and manage duration
Dynamic exposure mainly to inflation-linked bonds of the Eurozone denominated in euro and for a maximum 1/3 in nominal bonds*.
Active asset allocation across inflation linked bonds issuers Asset allocation Active
of potential performance Sources
consider investing Reasons to
Risks***
Strengths
The risk category is calculated using historical performance data and may not be a reliable indicator of the Sub-Fund's future risk profile.
The risk category shown is not guaranteed and may shift over time. The lowest category does not mean risk free.
The capital of the Sub-Fund is not guaranteed. The Sub-Fund is invested in financial markets and uses techniques and instruments which are subject to some levels of variation, which may result in gains or losses.
56
Potentially lower risk Potentially higher reward
Lower risk Higher risk
Risk and Reward profile
1 2 3 4 5 6 7
AXA World Funds Euro Inflation Bonds Monthly portfolio overview
Source: AXA IM as at 29/09/2017. *Excludes futures, cash and FX hedges. Derivatives gross exposure excludes FX forwards The fund does not have a reference index. The fund’s performance indicator Barclays Euro Govt Inflation-Linked All Mat is given as a basis for comparison
only Depending on the investment strategy used the information contained herein may be more detailed than the information disclosed in the prospectus. Any such information (i) does not constitute a representation or undertaking on the part of the investment manager; (ii) is subjective and (iii) may be
modified at any time within the limits provided in the fund prospectus
Breakdown by Country (in active Market weight)
Breakdown by Country (in active modified duration) Breakdown by Maturity
57
Fund Performance
Indicator
AUM €215 Mn
Average Years to Maturity 8.59 8.76
Real Yield -0.37% -0.57%
Duration (in years) 7.94 7.90
Average Linear Rating A A+
Cash Position 3.31%
Number of Positions* 37 36
AXA World Funds Euro Inflation Bonds
58
Evolution of the country allocation
Source: AXA IM as at 29/09/2017. The information contained here in is for informational purposes only. Data is unaudited and sourced from our front office portfolio management system. This graph includes cash. Examples are shown for illustrative purposes only and may not reflect current strategies.
Country Allocation of the Fund (% market weight)
Active Country Allocation vs Performance Indicator
AXA World Funds Euro Inflation Bonds I EUR
59
Performance
Source: AXA IM as at 29/09/2017. The figures provided relate to previous months or years and past performance is not a reliable indicator as to future
performance. Performance calculations are gross of management or distribution fees – I eur share class. Performance calculations are based on the
reinvestment of dividends, *The fund does not have a reference index. The fund’s performance indicator Barclays Euro Govt Inflation-Linked All Mat is
given as a basis for comparison only, No assurances can be made that profits will be achieved or that substantial losses will not be incurred. The client’s
return will be reduced by the management fees and other expenses. The Sub-Fund was launched on 25/11/2002
Gross Cumulative Performance (index=100 Dec 2009)
90
95
100
105
110
115
120
125
130
Portfolio Performance Indicator
Gross Cumulative
PerformanceYTD 1M 3M 1Y 3Y 5Y 2016
Gross Performance -0,23% -0,36% 1,19% -1,02% 5,93% 10,94% 4,27%
Performance indicator** -0,38% -0,33% 1,23% -1,31% 3,76% 7,15% 3,78%
Excess Return 0,14% -0,02% -0,04% 0,28% 2,17% 3,79% 0,49%
Fund’s volatility 3,19% 2,43% 3,06% 3,91% 4,67% 4,46% 3,98%
Tracking error 0,29% 0,35% 0,70% 0,45% 0,42% 0,41% 0,58%
Information Ratio 0,66 -0,85 -0,22 0,63 1,66 1,71 0,84
AXA World Funds Euro Inflation Bonds I EUR
60
General Characteristics
The risk category is calculated using historical performance data and may not be a reliable indicator of the Sub-Fund's future risk profile. The risk category shown is not guaranteed and may shift over time. The lowest category does not mean risk free
Why is this Sub-Fund in this category?
The capital of the Sub-Fund is not guaranteed. The Sub-Fund is invested in financial markets and uses techniques and instruments which are subject to some levels of variation, which may result in gains or losses
SUBSCRIPTION / REDEMPTION
The subscription, conversion or redemption orders must be received by
the Registrar and Transfer Agent on any Valuation Day no later than 3
p.m. CET. Orders will be processed at the Net Asset Value calculated the
next business day. The investor's attention is drawn to the existence of
potential additional processing time due to the possible involvement of
intermediaries such as Financial Advisers or distributors. The Net Asset
Value of this Sub-Fund is calculated on a daily basis.
Minimum initial investment: 100,000 euros or the equivalent in the
relevant currency of the relevant Share class.
Minimum subsequent investment: 10,000 euros or the equivalent in
the relevant currency of the relevant Share class.
Potentially lower risk Potentially higher reward
Lower risk Higher risk
Risk and Reward profile
1 2 3 4 5 6 7
General Characteristics
INVESTMENT OBJECTIVE
The Sub-Fund’s investment objective is to seek performance by investing mainly in inflation-linked bonds in Euros, over a medium term period.
Legal form SICAV
Legal country Luxembourg
Launch date 25/11/2002
Fund Currency EUR
Shareclass currency EUR
Valuation Daily
Share Type Accumulation / Income
ISIN Code C / D LU0227145389 / LU0227145546
Ongoing charges 0.36%
Financial management fee* 0.25%
Maximum Management Fees 0.25%
Minimum initial subscription 100 000 EUR
Minimum subsequent subscription 10 000 EUR
Management company AXA Funds Management SA
(Luxembourg)
(Sub) Financial delegation AXA Investment Managers Paris
Delegation of account administration State Street Bank Luxembourg S.C.A
Custodian State Street Bank Luxembourg S.C.A
*The fund may incur other costs, fees and administrative expenses (see prospectus).
Source: AXA IM as of 16/02/2015
Special risk consideration
61
Source: Prospectus
Derivatives Risk and Leverage: The Sub-Fund may use both listed and OTC derivatives for investment or hedging purposes, but also repurchase or securities lending agreement. These instruments are volatile and may be subject to various types of risks, including but not limited to market risk, liquidity risk, credit risk, counterparty risk, legal risk and operations risks. In addition, the use of derivatives can involve significant economic leverage and may, in some cases, involve significant risks of loss. Furthermore, Investments in OTC derivatives may have limited secondary markets liquidity and it may be difficult to assess the value of such a position and its exposure to risk. For these reasons, there can be no guarantee that strategies using derivatives instruments will meet their expected target.
Redex share class Risk factor relating to interest rate: Interest rate risk involves the risk that, when interest rates increase along the curve, as the market value of fixed-income securities tends to decline, as a result the Net Asset Value of standard shares tends to decrease. Conversely, when interest rates decline along the curve, the market value of fixed-income securities tends to increase, as a result, the Net Asset Value of the standard Shares tend to increase. Long-term fixed-income securities will normally have more price volatility because of this risk than short-term securities. The aim of the listed derivatives overlay strategy implemented at the Redex Share Class level is to reduce the exposure to interest rates parallel shifts along the curves. Therefore, the impact of interest rates parallel shifts on the Redex Share Net Asset Value tends to be reduced compared to the impact of such move on the standard Shares. When interest rates increase, as the market value of fixed-income securities tends to decline, the market value of the overlay strategy tends to increase, as a result the impact of the interest rates increase on the value of the Redex Shares tends to be more limited. Conversely, when interest rates decline, the market value of fixed-income securities tends to increase, and the market value of the overlay strategy tends to decrease as a result the impact of the interest rates decrease on the value of the Redex Shares tends to be more limited.
62
Introduction to the Inflation-Linked bonds market
Outlook for the inflation-linked bonds markets
AXA World Funds Global Inflation Bonds
AXA World Funds Global Inflation Short Duration Bonds
AXA World Funds Euro Inflation Bonds
AXA World Funds Universal Inflation Bonds
Reference Material
I
II
III
p.3
p.15
p.67
A
B
C
D
p.30
p.41
p.55
p.62
AXA World Funds Universal Inflation Bonds
Portfolio Overview
Diversified protection against inflation
Capture an attractive real rate of return
Dynamic allocation within the inflation-linked bonds universe
Key performance engines: real yield, breakeven and carry
A top-down judgmental approach and a disciplined investment process
Exposure to the entire inflation linked bond universe through developed and emerging markets’ issuers
Source: AXA IM. *Extract from the KIID – I USD Share class as at February 2017 Please refer to the prospectus for all additional risks.
An objective of limited duration while investing in maturity lower than 10 years
FXO share class : tool launched in October 2014 to provide investors systematical currency hedges
Total return approach to seek to achieve a mix of income and capital growth by investing in inflation-linked bonds over a medium term period. No performance indicator
GDP weighting allocation with extensive focus on solvency, liquidity and value
Currency exposure approach
Unconstrained
of potential performance Active sources
consider investing Reasons to
Risks*
Strengths
The capital of the Sub-Fund is not guaranteed. The Sub-Fund is invested in financial markets and uses techniques and instruments which are subject to some levels of variation, which may result in gains or losses.
The risk category shown is not guaranteed and may shift over time. The lowest category does not mean risk free.
The capital of the Sub-Fund is not guaranteed. The Sub-Fund is invested in financial markets and uses techniques and instruments which are subject to some levels of variation, which may result in gains or losses.
63
Potentially lower risk Potentially higher reward
Lower risk Higher risk
Risk and Reward profile
1 2 3 4 5 6 7
AXA World Funds Universal Inflation Bonds I USD
64
General Characteristics
Potentially lower risk Potentially higher reward
Lower risk Higher risk
Risk and Reward profile
1 2 3 4 5 6 7
The risk category is calculated using historical
performance data and may not be a reliable indicator of
the Fund’s future risk profile. The risk category shown is
not guaranteed and may shift over time. The lowest
category does not mean risk free. Please refer to the full
prospectus, to sections entitled «General Risk
Considerations» and «Special Risk Considerations» for
detailed statements of risks. The most recent risk
category, which may be different for each share class, is
available in the latest Key Investor Information
Document.
Main Characteristics
Investment Objective Seek performance through dynamic exposure to mainly inflation-linked bonds issued in the OECD and
emerging markets
Investment Horizon 3 years
Investment Zone Global
Investment Universe Inflation-linked bonds issued by governments, corporations or public institutions worldwide
Inception Date 17 July 2012
Legal Form Sub-fund of AXA World Funds, a Luxembourg-based SICAV
Reference Currency USD
Type of Share Capitalisation and Distribution
Valuation Daily
Subscription / Redemption Forward price, daily (D) before 3:00 pm (CET)
Settlement D+4 working days
Management Company AXA Funds Management S.A. (Luxembourg)
Investment Manager AXA Investment Managers Paris
Custodian State Street Bank Luxembourg S.A.
Source: AXA IM as at February 2017
AXA World Funds Universal Inflation Bonds
65
Other Information
((H) This share is protected against exchange rate fluctuations (at least 95% hedged) between the fund’s reference currency and that of the share class.
Please refer to the prospectus for details of other available share classes.
1 Foreign Exchange Overlay
2 Minimum initial subscription and minimum holding requirement in each Sub-Fund for E Distribution quarterly EUR hedged (95%) Share Class is USD
1.800,00 or the equivalent in the relevant currency of the relevant Class.
SHARE CLASS A E F I
Investor Type All investors All investors All investors For Institutional
Investors only
ISIN Code Capitalisation
USD LU0800575390 - LU0800575804 LU0800576109
EUR (H) LU0800575473 LU0800575713 LU0800575986 LU0800576281
CHF (H) LU0800575630 - LU0800576018 LU0800576364
GBP (H) - - - LU0800576448
ISIN Code Distribution EUR (H) LU0800575556 - - -
Minimum initial Subscription None None / 1 800* 100 000 5 000 000
Minimum Subsequent Investment None None 5 000 1 000 000
Maximum Subscription Fees 3.00% None 2.00% None
Maximum Redemption Fees None None None None
Maximum Annual Management Fees 0.80% 0.80% 0.60% 0.40%
Real Annual Management Fees 0.80% 0.80% 0.45% 0.40%
Maximum Distribution Fees None 0.65% None None
*Minimum initial subscription and minimum holding requirement in each Sub-Fund for E Distribution quarterly EUR hedged (95%) Share Class is USD 1.800,00 or the equivalent in the
relevant currency of the relevant Class.
Special risk consideration
66
Source: Prospectus
Derivatives Risk and Leverage: The Sub-Fund may use both listed and OTC derivatives for investment or hedging purposes, but also repurchase or securities lending agreement. These instruments are volatile and may be subject to various types of risks, including but not limited to market risk, liquidity risk, credit risk, counterparty risk, legal risk and operations risks. In addition, the use of derivatives can involve significant economic leverage and may, in some cases, involve significant risks of loss. Furthermore, Investments in OTC derivatives may have limited secondary markets liquidity and it may be difficult to assess the value of such a position and its exposure to risk. For these reasons, there can be no guarantee that strategies using derivatives instruments will meet their expected target.
Risks of Global Investments: Investments in securities issued or listed in different countries may imply the application of different standards and regulations (accounting, auditing and financial reporting standards, clearance and settlement procedures, taxes on dividends…). Investments may be affected by movements of foreign exchange rates, changes in laws or restrictions applicable to such investments, changes in exchange control regulations or price volatility.
Risk linked to investments in emerging markets: Legal infrastructure, in certain countries in which investments may be made, may not provide with the same degree of investors' protection or information to investors, as would generally apply to major securities markets (governments’ influence, social, political and economic instability, different accounting, auditing and financial report practices). Emerging markets securities may also be less liquid and more volatile than similar securities available in major markets, and there are higher risks associated to transactions settlement, involving timing and pricing issues.
67
Introduction to the Inflation-Linked bonds market
Outlook for the inflation-linked bonds markets
Reference Material
I
II
III
p.3
p.15
p.67
AXA Sterling Index Linked Bond Fund Z GBP
68
General Characteristics
Potentially lower risk Potentially higher reward
Lower risk Higher risk
Risk and Reward profile
1 2 3 4 5 6 7
The risk category is calculated using historical performance data and
may not be a reliable indicator of the Fund’s future risk profile. The risk
category shown is not guaranteed and may shift over time. The lowest
category does not mean risk free. Please refer to the full prospectus, to
sections entitled «General Risk Considerations» and «Special Risk
Considerations» for detailed statements of risks. The most recent risk
category, which may be different for each share class, is available in
the latest Key Investor Information Document.
Main Characteristics
Investment Objective The aim of the Fund is to provide income and capital growth, with the objective of reducing the negative effect
of inflation over the long term.
Investment Horizon 5 years
Investment Zone United Kigndom
Investment Universe
Sterling denominated index-linked securities. The Fund may also invest at the Investment Manager’s
discretion in transferable securities, derivatives, cash, deposits, units in collective investment schemes and
money market instruments.
Inception Date 24 September 2004
Legal Form UCITS Scheme
Reference Currency GBP
Type of Share Capitalisation
Valuation 12.00pm and also at 4.30pm on the last Dealing Day of each month
Settlement D+4 working days
Investment Manager AXA Investment Managers UK Limited
Depositary HSBC Bank Plc
Source: AXA IM as of 18/02/2015
Special risk consideration
69
Counterparty Risk: failure by any counterparty to a transaction (e.g. derivatives) with the Fund to meet its obligations may adversely affect the value of the Fund. The Fund may receive assets from the counterparty to protect against any such adverse effect but there is a risk that the value of such assets at the time of the failure would be insufficient to cover the loss to the Fund.
Credit Risk: the risk that an issuer of bonds will default on its obligations to pay income or repay capital, resulting in a decrease in Fund value. The value of a bond (and, subsequently, the Fund) is also affected by changes in market perceptions of the risk of future default. Investment grade issuers are regarded as less likely to default than issuers of high yield bonds.
Derivatives: derivatives can be more volatile than the underlying asset and may result in greater fluctuations to the Fund's value. In the case of derivatives not traded on an exchange they may be subject to additional counterparty and liquidity risk.
Inflation Linked Bond Risk: unlike other bonds, an inflation protected security (such as index linked gilts) reduces the negative effect of inflation on its real value. The market value of such securities will be affected both by the market's perception of future movements in interest rates and the future rate of inflation. Therefore the market value of such securities (and the value of the Fund) may not move in line with inflation rates in the short to medium term.
Interest Rate Risk: fluctuations in interest rates will change the value of bonds, impacting the value of the Fund. Generally, when interest rates rise, the value of the bonds fall and vice versa. The valuation of bonds will also change according to market perceptions of future movements in interest rates.
Further explanation of the risks associated with an investment in this Fund can be found in the prospectus.
Source: AXA IM as of 18/02/2015
AXA World Funds Global Inflation Bonds
70
Redex share classes: overview
► AXA World Funds Global Inflation Bonds offers two types of share classes:
► Standard share classes.
► Reduction of duration exposure share classes (the “Redex share classes”) – These share classes benefit
from the implementation of an overlay strategy designed to mitigate investor exposure to shifts in the nominal
interest rate curve (the “nominal interest rate shifts ”) whilst keeping unchanged exposure to inflation
breakevens.
► Redex overlay strategy methodology (the “overlay strategy”): Based on the systematic sales of EUR, GBP
and USD 10-year futures calibrated on the duration of the fund’s performance indicator*.
active investment strategy.
*The Barclays World Government Inflation-Linked Bonds All Maturity Index is a performance indicator given as a basis for comparison only. The fund
does not have a reference index.
Please refer to Slide 61 for risk disclosure on Redex Shareclasses
Systematically managed by a
specialist quantitative team whose
objective is to substantially reduce
the fund’s sensitivity to nominal
interest rate shifts
Long
inflation-linked bonds
Sales of 10-year bond
futures (US, EUR,
GBP)
Inflation breakeven variations
Nominal interest rate variations
Redex share classes are
mainly sensitive to: Fund’s portfolio
Redex overlay
strategy
= “Remaining duration”
resulting from the
conjunction of the
portfolio manager’s active
investment strategy and
the Redex overlay strategy
Unchanged sensitivity to
inflation breakeven
variations
Actively managed by
the fund’s portfolio
manager
► The Redex share class targets a duration of 2 (i.e. assuming no active investment rate investment
strategy and an average performance indicator* duration of 9)
► Actual Redex share class duration will usually range from 0 to 4 (active duration bets generally range from
+/- 25% of that of the performance indicator*)
Risk on Cross Class
Liabilities for all share
classes (Redex):
Although there is an
accounting attribution of
assets and liabilities to
the relevant class within
the relevant sub-fund,
there is no legal
segregation with
respect to classes of
the same sub-fund.
Therefore, if the
liabilities of a class
exceed its assets,
creditors of said class
of the sub-fund may
seek to have recourse
to the assets
attributable to the other
classes of the same
sub-fund. As there is an
accounting attribution of
assets and liabilities
without any legal
segregation amongst
classes, a transaction
relating to a class could
affect the other classes
of the same sub-fund.”
Disclaimer
The funds are registered for public distribution in Luxembourg. Please check the countries of registration with the asset manager, or on the web site www.axa-
im-international.com where a fund registration map is available. The most recent prospectus is available to all investors and must be read prior subscription,
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 WORLD FUNDS ‘s registered office is 49, avenue J.F Kennedy L-1885 Luxembourg. The Company is registered under the number B. 63.116 at the
“Registre de Commerce et des Sociétés” The Company is a Luxembourg SICAV UCITS IV approved by the CSSF.
AXA Sterling Index Linked Bond Fund is a sub-fund of the AXA Fixed Interest Investment Company ICVC which is an open ended investment company
(OEIC) authorised by the FCA, and has a UCITS certificate. The Company is managed in accordance with the FCA Collective Investment Schemes
Sourcebook (COLL). AXA Sterling Index Linked Bond Fund is authorised in the United Kingdom and regulated by the Financial Conduct Authority (FCA).
AXA Investment Managers UK Limited is authorised in the United Kingdom and regulated by the Financial Conduct Authority (FCA). This key investor
information is accurate as at 18/02/2016.ssued by AXA Investment Managers UK Limited (AXA IM UK). AXA IM UK is the Authorised Corporate Director,
Authorised Fund Manager and Investment Manager for a range of Open Ended Investment Companies (OEICs) and Authorised Unit Trusts. AXA IM UK is
registered in England and Wales No. 01431068. Registered office: 7 Newgate Street, London, EC1A 7NX. AXA IM UK is authorised and regulated by the
Financial Conduct Authority (No. 119368). Administration office: PO Box 10908, Chelmsford, CM99 2UT. Tel: 0845 777 5511 Fax: 0844 620 0151. Telephone
calls may be recorded or monitored for quality assurance purposes.
Editor : AXA INVESTMENT MANAGERS PARIS, a company incorporated under the laws of France, having its registered office located at Majunga 6, Place
de la Pyramide 92800 Puteaux, FRANCE, registered with the Nanterre Trade and Companies Register under number 353 534 506, a Portfolio Management
Company, holder of AMF approval no. GP 92008, issued on 7 April 1992
71
Disclaimer
This promotional document is intended for Professional Clients under MiFID (2004/39/EC) only and must not be relied upon by retail clients. Circulation must
be restricted accordingly. Any reproduction of this information, in whole or in part, is prohibited.
The information contained in this promotional document is confidential information supplied at the sole request of the recipient. By accepting this information,
the recipient agrees that it will not divulge any such information to any other party. This document is for informational purposes only and does not constitute,
on AXA Investment Managers part, an offer to buy or sell or a solicitation or investment advice. Due to its simplification, this document is partial and the
information can be subjective. AXA Investment Managers may but shall not be obligated to update or otherwise revise this document without any prior notice.
All information in this document is established on the accounting information or on market data basis. All accounting information is un-audited. AXA
Investment Managers disclaims any and all liability relating to a decision based on or for reliance on this document. The most recent prospectus is available to
all investors and must be read prior subscription and the decision whether to invest or not must be based on the information contained in the prospectus.
Furthermore, due to the subjective nature of these analysis and opinions, these data, projections, forecasts, anticipations, hypothesis and/or opinions are not
necessary used or followed by AXA IM’ management teams or its affiliates who may act based on their own opinions and as independent departments within
the Company.
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. Some of the investment vehicles mentioned may not be available in certain jurisdictions. Please
check the countries in which they are registered with the asset manager.
AXA World Funds Global Inflation Bonds, AXA World Funds Euro Inflation Bonds and AXA World Funds Universal Inflation Bonds are sub-funds of AXA
World Funds, which is a SICAV fund domiciled in Luxembourg.
The figures provided relate to previous months or years and past performance is not a reliable indicator as to future performance.
The graphs are given for illustrative purposes.
In the case where the currency of investment is different from the Fund’s reference currency the gains are capable of varying considerably due to the
fluctuations of the exchange rate.
Information contained in this document may be updated from time to time. Information contained herein may vary from previous or future published versions
of this document.
Depending on the investment strategy used the information contained herein may be more detailed than the information disclosed in the prospectus. Any such
information (i) does not constitute a representation or undertaking on the part of the investment manager; (ii) is subjective and (iii) may be modified at any time
within the limits provided in the fund prospectus.
72
This document is intended for professional advisers’ use only under MiFID rules for markets in financial instruments. The information and financial data contained herein is being provided for informational purposes only and in no event is intended for retail customers and/or end investors. The information contained herein is for professional clients and eligible counterparties as they are defined in Articles 205 and 207 of the Spanish Securities Market Act (Ley del Mercado de Valores), it is presumed, therefore, experience, knowledge and expertise to make their own investment decisions and properly assess their risks and their customers. Similarly, information and financial data contained in this document do not constitute a financial advise, financial promotion or invitation or recommendation or acquisition of investment, or constitute, themselves, a basis for making investment decisions nor represent a guarantee of future returns of financial investments. The financial market fluctuates and is subjected to change and exchange rates fluctuations may directly affect the profitability of investments, both upwards and downwards. Past performance must not be a reference of the products since does not imply that they will behave the same way in the future. The recipient of this information should be aware that the evolution of economic variables and values of the financial markets can change significantly and be different from the analysis and information given in this document. It is recommended to have a more detailed knowledge through the Key Investor Information Document (KIID/DFI) which is available to all investors and must be read prior subscription and the decision to invest.
AXA Investment Managers (AXA IM) assumes no responsibility for any act or omission resulting from poor or improper use of the information provided, declining any responsibility for the improper handling of this document. For more detailed information and especially to the awareness of the availability of the products we recommend visiting the website www.axa-im.es, where a funds registration map is available.
AXA Investment Managers GS Limited, Spanish Branch, has its registered office in Madrid, Paseo de la Castellana 93, 6th floor, is registered with the Madrid Companies House, sheet M-301801, and is registered with the CNMV under 19 number as ESI of the European Economic Space, with Branch.
AXA Funds Management (AMF), is a société anonyme organized under the laws of Luxembourg with the Luxembourg Register Number B 32 223RC, and whose registered office is located at 49, Avenue J.F. Kennedy L-1885 Luxembourg.
AXA WF GLOBAL FLEXIBLE PROPERTY is a Sub-Fund of AXA WORLD FUNDS, a Luxembourg SICAV UCITS IV approved and authorised by the CSSF and its registered office is located at 49, avenue J.F. Kennedy L-1885 Luxembourg. AXA WORLD FUNDS is registered with the CNMV under 239 number.
Disclaimer
18 October
2017 Team 73
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