AXA Investment Managers has launched a new real estate fund which invests in listed equity companies and debt, mimicking long-term real estate returns.
The AXA WF Global Flexible Property fund aims to provide investors with a liquid, lower-volatility alternative to both pure listed property investments and direct real estate.
The fund will invest in 60% real estate equity and 40% publicly traded debt, including REITs and investment grade bonds.
The company said though that the fund manager will have the ability to change allocation based upon the current stage in the property cycle.
The addition of debt into the fund mix eliminates some element of volatility that comes with investment in the equity markets alone.
This is a different approach than taken by BlackRock, which recently launched a similar fund. BlackRock opted to add inflation bonds to listed property company investments in order to emulate long-term direct real estate investments.
In addition, the AXA IM fund will only invest up to 10% of its total in UCITS compared to 100% for the BlackRock fund.
The Luxembourg-based fund will be managed by a team taken directly from AXA IM and also representatives from AXA Real Estate.
