Olivier Paquier, the Global Head of ETF Sales at AXA Investment Managers (AXA IM), joins ETF TV to share insights on their ETF strategy

Presented by AXA Investment Managers.

Margareta Hricova Welcome to ETF TV. Your insight into the world of exchange traded funds, issuers and investments. I’m Margareta Hricova and joining me today is Olivier Paquier Global Head of ETF sales at AXA Investment Managers and Deborah Fuhr. Welcome to the show.

Olivier Paquier It’s great to be here.

Deborah Fuhr Thank you. Olivier great to have you on the show, so AXA recently entered the ETF industry. Can you tell us about your strategy and areas of focus.

Olivier Paquier So, we’ve launched this ETF buisness 18 months ago, but we’ve been doing portfolio management for over 25 years. And clearly ETFs come as a natural evolution for us taking into account our three areas of strength I would say. Fixed income first and foremost. AXA is a fixed income house in its DNA. We’re active managers. We believe in active management overall, and we have deployed a ton of capabilities across many asset classes over the years, and we’re an ESG player definitely taking ESG into consideration because after all, we have an insurance DNA as well where ESG is part of our business globally.

Margareta Hricova So you’ve decided to focus on PAB benchmarks. What are they and where do you see demand?

Olivier Paquier The PAB benchmark is one of the areas of focus for us broadly and commonly understood by most investors globally. Paris aligned benchmark helps clients to decarbonize their portfolio at least by 7% year on year, in line with the Paris agreements that have been signed in 2015 by many countries. We use the Paris aligned benchmarks, both on the active and on the passive side of our investment strategies available through ETFs, but we have not limited ourselves to PAB. We’ve also decided to launch some thematic ETFs using the United Nations SDGs, focusing on the biodiversity strategy, as well as a climate strategy encompassing a couple of elements, both responsible investment exclusions and impact filters that we have defined at the asset management level within our company. The same way we would have defined these for any mutual fund, but also defining a climate investable universe using qualitative and quantitative preparatory solutions, adding value not only into the purity of the exposure, but also in terms of performance. So two different approaches, one PAB, the other with United Nations Sustainable Development Goals. And we’re the only ones offering this these days.

Deborah Fuhr As you look out to the end of 2024, what do you see as trends as you travel around the world?

Olivier Paquier One of them is the equity space. I mean, the US market and the US exposures are areas of development for many ETF providers, and certainly for us. In 2024 in particular, I’ve been traveling already in various countries in Europe, Latin America, North America and Asia Pacific. Most of the investors we talked to, they certainly invest more than 20% of their exposures and their allocations in fixed income. Within the ETF industry, we observe this is the contrary today. About 70 to 80% of the flows go to equities. And I think this sort of dichotomy is slowly but surely going back to normality. There is a clear need for more solutions through the ETF wrapper. A lot of investors have understood that ETFs democratize investments whether Active, whether Smart Beta, whether Passive, it doesn’t matter. And what we see, as well as an acceleration of the usage of ETFs in portfolios just for Europe. And this is something that I’ve noticed. Year to date, the inflows in the ETF wrapper have surpassed those of last year by 40%. So to me we are in a year of acceleration. Fixed income is an area of growth in my view, and also U.S. exposures. We are in a year of U.S. elections, and there’s going to be a lot of opportunities to tap into this year with ETFs.

Deborah Fuhr That’s great. Thank you for joining us.

Olivier Paquier Thank you.

Margareta Hricova Thank you to AXA Investment Managers for sponsoring this episode, and to all of you for watching.  To watch prior episodes and to see news from the ETF industry, visit us at ETVTV.net.  Thank you. ETV news does not provide investment advice nor recommend products.

Published on April 11, 2024