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Liquid returns: AXA IM Chorus debut highlights demand for absolute return

AXA IM's Chorus multi-premia strategy aims to deliver attractive, liquid and transparent risk-adjusted performance to global clients.
Liquid returns: AXA IM Chorus debut highlights demand for absolute return

Global investors have welcomed AXA Investment Managers (AXA IM) new multi-premia strategy with assets under management growing to $1.3 billion in its first half year, and returns on investment of nearly 5% (June*-November 2017) being managed by its Hong Kong based team, AXA IM Chorus.

Given financial analysts forecast positive but slow growth in 2018, followed by muted long-term prospects (1), there’s increasing interest in strategies such as AXA IM Chorus multi-premia as an alternative to traditional investment strategies. While major banks (2) predict global growth of between 3.7- 4 percent in 2018, this encouraging outlook has been tempered by the Organization for Economic Cooperation and Development’s warning of potentially high asset prices.

According to AXA IM Chorus managing director, Pierre-Emmanuel Juillard, the new strategy’s diversified set of premia strategies focused on absolute returns through global investments means it should be well placed going into 2018, given it seeks return for investors with a low correlation to traditional asset classes.

“AXA IM Chorus multi-premia strategy aims to delivers attractive, liquid and transparent risk-adjusted performance. We offer investors a product that has low connection to financial markets and our emphasis on being liquid makes us market neutral,” says Juillard.

Seeking steady growth, stable returns and performance without doubling up on financial markets, the strategy targets single name equities, large and mid-cap stocks, S&P options, interest rate and foreign exchange swaps. Its clients include insurance companies, pension funds, private banks, sovereign banks and multi-managers seeking liquidity and diversity, as well as transparent, risk-adjusted returns capable of performing successfully under all market conditions.

Steady performance despite market conditions is likely to prove an attractive proposition if existing market conditions change in 2018. Last November, Morgan Stanley analysts predict 2017’s low stock market volatility and low volatility of interest rates, FX and credit, is set to turn around in 2018 (3).

Since AXA IM Chorus multi-premia strategy is liquid, clients can buy and sell without delay while its robust risk framework ensures minimal exposure to adverse markets and hidden risks.

Juillard’s expertise and background is ideally suited to building the new platform. After six years as partner and head of structuring in the investment bank Goldman Sachs’ securities division (Asia Pacific), he returned in April 2016 to lead AXA IM Chorus. Before moving to Goldman Sachs, he was head of structured finance at AXA IM.

Over the past 18 months, he has carefully crafted a team adept at delivering liquid and transparent risk-adjusted performance. Having 80 per cent of multi-premia strategy team based in Hong Kong gives it a strategic advantage in terms of location, infrastructure and financial expertise. The Hong Kong location makes it ideally placed to take advantage of market openings and time zones, whether they’re in London, New York or Asia.

With such a noteworthy start, it’s not surprising Juillard’s team has grown from a central core of 8 founders, to 30 top investment professionals with expertise in research, analysis, cutting edge technology and, in an unusual move, academic expertise in financial markets. The AXA IM Chorus team also draws on research generated by its Research Lab, using software developed by its own technology team.

“Our quantitative researchers focus on the predictive power of data, to give us an edge on future returns. We also believe in the tenants of behavioural finance, in taking advantage of certain behaviours and situations, to extract and benefit from anomalies in the market,” says Juillard.

Looking to the future, AXA IM Chorus aims to grow its multi-premia strategy assets under management to between USD5-10billion, carefully balancing the interest of clients, the risk of the strategy while aiming to deliver positive performances.

For more information about AXA IM Chorus multi-premia strategy or investment management, please contact: [email protected]

Sources: AXA IM as at November 2017 - * Note that the strategy was in ramp-up period from April, 20th (the strategy launch) to June, 1st 2017. Inclusion of the latter period would not be representative of the strategy implementation.”

This is for information purposes only and does not constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services and should not be considered as a solicitation or as investment advice.

The content herein may not be suitable for retail clients. No financial decisions should be made on the basis of the information provided.

In Singapore, this document has been issued by AXA Investment Managers Asia (Singapore) Ltd. (Registration No. 199001714W). In other countries, this document has been issued by AXA Investment Managers Asia Limited. References to “AXA IM Asia” below shall be references to AXA Investment Managers Asia (Singapore) Ltd. or AXA Investment Managers Asia Limited as appropriate. This document has not been reviewed by the SFC.

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Such information may be subject to change without notice. The data contained herein, including but not limited to any backtesting, simulated performance history, scenario analysis and investment guidelines, are based on a number of key assumptions and inputs, and are presented for indicative and/or illustrative purposes only.

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