AXA Investment Managers (AXA IM), the asset management arm of French insurance group AXA, has introduced its first fixed income ETF, an actively managed euro corporate bond fund aligned with the climate goals of the Paris Agreement.

AXA IM has introduced its first fixed income ETF in Europe.

The AXA IM Euro Credit PAB UCITS ETF (AIPE GY) has been listed on Deutsche Börse Xetra in euros.

Benchmarked against the ICE Euro Corporate Paris Aligned Absolute Emissions Index, the fund invests in fixed and floating-rate, euro-denominated, investment-grade bonds that have been issued by corporate issuers in developed markets.

Issuers that are embroiled in severe ESG-related controversies, as well as firms with business operations linked to weapons, tobacco, thermal coal, oil & gas, or oil sands, are ineligible for inclusion into the portfolio.

Security selection is driven by AXA’s internal analysis of credit and market risk. The final portfolio is constructed so as to deliver an immediate 50% reduction in weighted average carbon intensity relative to the ICE BofA Euro Corporate Index universe as well as a further 7% annual decarbonization going forward, aligning with a trajectory to limit global warming to 1.5°C above pre-industrial levels by 2050.

The ETF comes with an expense ratio of 0.20% and is classified as an Article 8 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).

The fund’s listing brings the number of ETFs in AXA’s arsenal to four. Among the existing three equity ETFs, two deliver exposure to actively managed impact strategies by targeting companies supporting biodiversity efforts and firms making a positive contribution to reducing climate change. The third ETF provides low-cost access to the Nasdaq 100.