The fund, which is managed by the group’s head of European high yield team, Andrew Wilmont, will primarily invest in short-dated euro and sterling denominated high yield corporate bonds.
The average duration of bonds within the fund will be set at less than two years and the annual returns target will be 5-6% net of fees in the current market conditions.
By investing in short duration bonds AXA hopes to avoid exposure to the impact of rising interest rates.
AXA said: "High yield is by nature a short duration asset class, which provides increased protection against interest rate risks, so by focusing specifically on the shorter duration segment of the market, this effect will be further enhanced."
The fund management firm currently has over €10bn in short duration assets under management globally.
Andrew Wilmont, manager of the new fund, said: "Short duration high yield bonds are a powerful tool for portfolio diversification due to their low correlation with other asset classes, including other fixed income asset classes.
"This fund will tap into the €171.5bn European high yield market, where we are seeing some excellent opportunities."
The fund is Ucits III compliant and domiciled in Luxembourg. AXA IM is currently considering registration of the fund in a number of countries across Europe.
