The FSA Spy market buzz – 6 June 2025
Animal spirits run wild; Franklin Templeton is taking credit; EM banking revolution; Not all luxury is equal; Death of search and the AI machine; George Soros on wins and much more.
HEAD-TO-HEAD: Axa vs Pimco
FSA compares two inflation-linked bond funds: the Axa World Funds Global Inflation Bonds Fund and The Pimco GIS Global Real Return Fund.
The Axa fund charges a 0.55% fee for its clean share class (without distribution fees), while the Pimco fund charges 0.76%. The average for the category is 0.63%, making the Axa fund a bargain and the Pimco fund in the more expensive range.
Pimco’s higher fees is to some extent justified by its more active approach, Dobrescu noted. Also, “the managers have quite a lot of drivers [available to them] to try to add value and compensate for the fees handicap,” she added.
Fund managers in this category have been experiencing some fee pressure.
“We are seeing a lot of new offerings coming into the space, including ETFs, that come at very competitive pricing, and are able to replicate the performance of the index quite faithfully,” Dobrescu said.
The category has seen an increase in the share of passive funds. At the end of July 2017, 37.8% of AUM of inflation-linked bond funds was in index funds or ETFs. Three years earlier, the share of passive funds was only 27%.
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