AXA Investment Managers has launched a fund holding high grade debt portions in products known as collateralised debt obligations (CDOs), the French-based company said on Wednesday. CDOs bundle together exposure to a range of credits in one instrument, which is split into a number of tranches reflecting different levels of risk, ranging from low-risk debt to high-risk equity.
AXA's Classique Invest will hold senior debt tranches of CDOs, and all assets in the portfolio will be floating-rate securities in order to hedge the risk of rising interest rates, the company said in a statement.
The fund aims to achieve a return of 60 basis points above three-month Euribor. It will be managed by Olivier Dieudonne.
"Participating in a fund of CDO senior debt tranches...enables investors to gain attractive (yield) spread pickup relative to debt securities with similar ratings," said Melissa Tessier of AXA Investment Management's structured finance division. The new fund is to be registered for sale in France and Germany and is the first such product to be launched by AXA Investment Managers, a spokeswoman for the firm said.
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