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Yield collapse forces closure of AXA gilt fund

Yield collapse forces closure of AXA gilt fund

AXA Investment Managers has shut its Sterling Gilt fund, attributing the decision to the plummeting yields available from UK sovereign debt.

‘Yields in recent years in the gilt market have fallen to record lows, having a negative effect on the size of the AXA Sterling Gilt fund and reducing demand to the point where the fund value was not economically sustainable,’ a spokesperson for the firm told Wealth Manager.

‘As a result keeping the fund open was not in the best interest of clients.’

The £7.6 million fund will now liquidate on 8 September 2014.

Managed by John Madziyire, the fund has returned 12.2% over the past three years, compared with an average of 15.9% from its Citywire UK Gilt sector.

Madziyire also runs the £23.2 million AXA Sterling Long Gilt fund, which focuses on bonds with longer maturities than its sister strategy.

It has returned 26.8% on a three-year view, a top-quartile performance within its Sterling Bond category where the peer-group average for the period is 19.8%.

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