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AXA targets MySuper with 'Smart Beta' strategies
AXA Investment Managers has unveiled a series of 'Smart Beta' credit market strategies that have been designed with MySuper products in mind.
According to a white paper released by AXA IM entitled "Investing in Credit: Smart Beta or Dumb Beta?", cap-weighted strategies have failed investors because they lack diversity and do not 'buy and sell' the market well.
"Had you, for example, invested in the global equity index in 1989 you would have invested 50 per cent of your money in Japan - an investment which would subsequently drag down the return from the other markets in the index," according to the white paper. AXA's Smart Beta strategy, on the other hand, avoids overweighting the most indebted issuers by striving to avoid poorly valued or 'at risk' bonds.
Regular monitoring by the AXA Fixed Income team ensures that diversification and credit worthiness of the portfolio is maintained, according to AXA IM director, Australia and New Zealand, Craig Hurt.
"SmartBeta offers a middle ground for those looking to harvest the return of the market whilst still avoiding the inefficiencies of a purely passive approach.
"It is a strategy that is designed with the aim of protecting portfolios from both systemic and event risk and to deliver a less volatile return," said Hurt.
"We believe that our SmartBeta solutions will enable local investors to achieve both the low costs they are seeking while simultaneously resolving the market-capitalisation issues," he added.
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