Posted inHead To Head

HEAD-TO-HEAD: Axa versus M&G

FSA compares two fixed income products: the Axa Sterling Credit Short Duration Bond Fund and the M&G Corporate Bond Fund.
by Rupert Walker

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Conclusion

Morningstar has awarded the Axa product two stars based on historical returns, and with a neutral analyst rating. The firm also gives the M&G fund two stars, but a forward-looking analyst rating of bronze.

FE Fundinfo, which bases its assessment on a fund’s three-year history of delivering alpha, minimising relative volatility and producing consistent returns, awards the Axa product two crowns, and rates the M&G fund higher with three crowns.

“Both strategies are excellent at what they do in this space,” said McDemott.

“However, I would side with the M&G fund at present because of its wider remit. Woolnough also has an exceptional record of managing money in the past two decades and has an extensive team behind him,” he said.

On the other hand, “if you are worried about imminent interest rate rises (something we feel will not happen for at least another couple of years) the Axa fund would be the ideal solution to those challenges,” said McDermott.

“This is because the shorter the duration of the bonds the less you get hurt if interest rates go up. If you wanted a conservative corporate bond, the Axa fund would be one of the first ports of call,” he concluded.

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