The Asset Management Exchange (AMX) investment platform has announced a new $1bn fund designed to deliver predictable cash flows with lower transaction costs.
The Long Term Credit Fund will be run by AXA Investment Managers using a ‘buy and maintain’ credit strategy to build “a well-diversified, benchmark-agnostic, long-dated credit portfolio”, AMX said.
‘Buy and maintain’ is a passive and relatively low-turnover investment strategy which aims to reduce transaction costs (and consequently, fees) and ensure stability by holding on to securities for long periods of time, in the hope of delivering more consistent returns.
“In today’s environment pension funds want to ensure that their portfolio is suited to the current market conditions and that it also reflects the outcomes that they seek,” said AMX chief executive Oliver Jaegemann.
“Pressure on cost transparency is driving pension funds to review the value they are generating in exchange for the total costs they are paying.”
Jaegemann emphasised the relatively low costs of a ‘buy and maintain approach’, describing it as “more cost effective for many schemes, generating lower transaction costs and offering fees that are lower than active management.”
Sebastien Proffit, a head of portfolio solutions at AXA, said: “Over the last two years we have seen large schemes implementing segregated mandate to meet the cashflow negativity challenge.
“We are now please to launch the Long Term Credit Fund on the AMX platform in order to provide schemes of all size with the certainty they need to deliver on their long-term objectives,” Proffit said.
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