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AXA WF Framlington Digital Economy

ISIN LU1694772994

Last NAV 129.3600 USD as of 30/03/20

Why this fund

Internet retailing is forecast to grow 14% a year over the next five years1, as consumers become ever-more connected through mobile, as digital-savvy millennials enter their peak spending years and older generations grow more comfortable shopping online, and as digital-enabled companies take increasing market share from traditional high street retailers. The fund offers a focused entry point into this multi-decade investment theme.

Reasons to invest:

  1. Access the long-term potential of the rapidly expanding digital economy 
    Supported by mobile commerce growth in developed markets and rising internet usage in emerging markets, internet retailing expected to grow at an average rate of 14% per year over the next five years1. We believe this represents a significant structural opportunity for investors seeking long-term growth2.
  2. Gain exposure to a diversified and growing universe 
    Even at the early stages of this long-term trend, the digital economy represents a diverse, multi-cap universe of companies operating across multiple sectors, not typically captured in traditional technology indices.
  3. Benefit from an actively managed, unconstrained approach 
    With hundreds of meetings with technology executives each year, our detailed coverage of the investment universe helps us identify companies with above-average growth prospects in this emerging theme.

Key figures

  • Only 9%

    of retail transactions are done digitally today; a number only likely to rise *3

  • 40-60 stocks

    Global multi-cap strategy investing in a concentrated portfolio **4

  • 50+

    Regional and sector experts in Framlington Equities **4

Where does the digital economy strategy invest?

  • Discovery of the product

How people search for and discover products and services, I.e. online search, digital marketing, advertising and social media.

  • Decision-making

E-commerce companies, web portals and mobile apps which provide consumers with convenient and reliable product choices.

  • Delivery

Companies that help facilitate payments and logistics to keep pace with consumers' increasing expectations of same-day delivery.

  • Data and enablers

Digital companies that act as 'enablers' for traditional businesses looking to adapt to the fast evolving digital landscape.

“The constant advances in data analytics and other enabling applications will continue to improve and evolve online consumer experiences as well as the digital presence of companies. While we are only at the beginning of this significant trend, it already represents a huge opportunity for investors.”
Jeremy Gleeson, Portfolio Manager

Source:
1 Citi GPS: Technology at Work v3.0, August 2017. This is a forecast and is not a guarantee of future performance.

2 Please note that expectations of growth are no guarantee of future performance.

3 Euromonitor International, Citibank “Technology at work v3.0”, August 2017.

4 AXA IM as at 30 November 2017

Please note that the funds or securities referred to herein may not be registered nor available in your jurisdiction, and that the information provided does not constitute an offer to buy or sell, solicitation or investment advice. Please check the countries of registration with the asset manager, or on the website, where a fund registration map is available.

RISK FACTORS

Counterparty Risk:

Risk of bankruptcy, insolvency, or payment or delivery failure of any of the Fund's counterparties, leading to a payment or delivery default.

Impact of any techniques such as derivatives:

Certain management strategies involve specific risks, such as liquidity risk, credit risk, counterparty risk, legal risk, valuation risk, operational risk and risks related to the underlying assets.
The use of such strategies may also involve leverage, which may increase the effect of market movements on the Sub-Fund and may result in significant risk of losses.

Not for Retail distribution: This document is intended exclusively for Professional, Institutional, Qualified or Wholesale Clients / Investors only, as defined by applicable local laws and regulation. Circulation must be restricted accordingly.

This promotional communication does not constitute on the part of AXA Investment Managers a solicitation or investment, legal or tax advice. This material does not contain sufficient information to support an investment decision.
Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.
Before making an investment, investors should read the relevant Prospectus and the Key Investor Information Document / scheme documents, which provide full product details including investment charges and risks. The information contained herein is not a substitute for those documents or for professional external advice.
The products or strategies discussed in this document may not be registered nor available in your jurisdiction. Please check the countries of registration with the asset manager, or on the web site https://www.axa-im.com/en/registration-map, where a fund registration map is available. In particular units of the funds may not be offered, sold or delivered to U.S. Persons within the meaning of Regulation S of the U.S. Securities Act of 1933. The tax treatment relating to the holding, acquisition or disposal of shares or units in the fund depends on each investor’s tax status or treatment and may be subject to change. Any potential investor is strongly encouraged to seek advice from its own tax advisors.
AXA WF Framlington FinTech is a sub-fund of AXA World Funds. AXA WORLD FUNDS ‘s registered office is 49, avenue J.F Kennedy L-1885 Luxembourg. The Company is registered under the number B. 63.116 at the “Registre de Commerce et des Sociétés” The Company is a Luxembourg SICAV UCITS IV approved by the CSSF and managed by AXA Funds Management, a société anonyme organized under the laws of Luxembourg with the Luxembourg Register Number B 32 223RC, and whose registered office is located at 49, Avenue J.F. Kennedy L-1885 Luxembourg.
Past performance is not a guide to current or future performance, and any performance or return data displayed does not take into account commissions and costs incurred when issuing or redeeming units. References to league tables and awards are not an indicator of future performance or places in league tables or awards and should not be construed as an endorsement of any AXA IM company or their products or services. Please refer to the websites of the sponsors/issuers for information regarding the criteria on which the awards/ratings are based. The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested. Exchange-rate fluctuations may also affect the value of their investment. Due to this and the initial charge that is usually made, an investment is not usually suitable as a short term holding.
Issued in the UK by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales No: 01431068. Registered Office: 7 Newgate Street, London EC1A 7NX.

This webpage is for professional clients only and must not be relied upon by retail clients. Circulation must be restricted accordingly. Any reproduction of this information, in whole or in part, is prohibited. This communication does not constitute an offer to buy or sell any AXA Investment Managers product or service. It is provided to you for information purposes only. The views expressed do not constitute investment advice. The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested. AXA World Funds Framlington Digital Economy is a sub-fund of AXA World Funds, which is a SICAV fund domiciled in Luxembourg. It is recognised by the UK Financial Conduct Authority and is available for sale to the public in the UK. AXA WORLD FUNDS ‘s registered office is 49, avenue J.F Kennedy L-1885 Luxembourg. The Company is registered under the number B. 63.116 at the “Registre de Commerce et des Sociétés”. The Company is a Luxembourg SICAV UCITS IV approved by the CSSF. Before making an investment, investors should read the relevant Prospectus and the Key Investor Information Document, which provide full product details including investment charges and risks. The information contained herein is not a substitute for those documents or for independent advice. In Belgium, this webpage is intended for professional clients only, as defined by local laws and the MiFID directive, and is distributed by AXA IM Benelux SA/NV, 1 Place du Trône - 1000 Brussels Belgium.   

Overview

Investment objectives

The Sub-Fund seeks to provide long-term growth, in USD, from an actively managed listed equity and equity-related securities portfolio.

Risk

Synthetic Risk & Reward Information scale

1 2 3 4 5 SRRI Value 6 7

The risk category is calculated using historical performance data and may not be a reliable indicator of the Sub-Fund's future risk profile. The risk category shown is not guaranteed and may shift over time. The lowest category does not mean risk free.

Why is this Fund in this category?

The capital of the Sub-Fund is not guaranteed. The Sub-Fund is invested in financial markets and uses techniques and instruments which may be subject to sudden and significant variation, which may result in substantial gains or losses.

Additional risks

Counterparty Risk: Risk of bankruptcy, insolvency, or payment or delivery failure of any of the Sub-Fund's counterparties, leading to a payment or delivery default. Impact of any techniques such as derivatives: Certain management strategies involve specific risks, such as liquidity risk, credit risk, counterparty risk, legal risk, valuation risk, operational risk and risks related to the underlying assets.The use of such strategies may also involve leverage, which may increase the effect of market movements on the Sub-Fund and may result in significant risk of losses.

Investment horizon

This Sub-Fund may not be suitable for investors who plan to withdraw their contribution within 8 years.

Main documents

Fund manager comment : 29/02/20

Performance & Market environment Global equity markets were negative in February, with the MSCI All Country World index declining 8%. Overall market sentiment took a turn for the worse towards the end of the month, as new cases of coronavirus emerging outside of China created cause for concern. This change in dynamic suggests that the economic impacts will be broader than initially expected. At this stage, there is still a considerable amount of uncertainty and the duration and magnitude of the outbreak will largely depend on how well countries manage to contain the virus. From a market perspective, corporate earnings results and guidance for the year continued to be robust, and have largely been well received by the market, although we are mindful that the coronavirus situation could lead to revised outlooks. The Digital Economy strategy outperformed the broader global equity market in February, driven by our exposure to IT Services and Software companies. Those companies typically have minimal revenue exposure to Asia Pacific. They also have stronger balance sheets than the overall market, and during periods of stress and uncertainties like the one we are going through at the moment, this feature tend to be appreciated by investors. During February, our exposure to the Discovery theme contributed the most to performance, mainly driven by Chinese internet company Tencent, as the outbreak in China is leading to more people staying at home and using online platforms and video games. From an individual stock perspective, the strategy has seen a significant contribution from our position in Endava, IT Services business with a focus on helping customers with their digital transformations. Our exposure to the Delivery theme was the main detractor to performance, mostly driven by the current disruption and uncertainty surrounded by the coronavirus situation. Companies such as Deutsche Post has been affected by weaker trade volumes, but management indicated a slow recovery more recently. Portfolio Activity During the month we started a position in Accenture, leading IT services company focussing in strategy and consulting exposed to digital transformations for a wide range of industries. We reduced our exposure in online travel agent Booking holdings, as travel pattern disruptions associated with the Coronavirus outbreak may continue to impact the company. Market Outlook The outbreak of the coronavirus in China, and subsequent spread of cases around Asia and Europe has unsurprisingly cast a cloud over equity markets and given the uncertainty that it has created, it is not surprising to see an increase in volatility and profit taking. The impact to the global economy will not be fully known for some time, and the timelines for the issue to come under control are uncertain. However, central banks and governments are prepared to step up with stimulus measures in order to provide support to the economies. From an investment perspective, we are monitoring these events and if fundamentals for the sector continue to be robust, we will use any weakness in share prices as an opportunity to invest. While macro developments and uncertainties regarding the coronavirus will continue to dominate sentiment, the overall outlook for the companies in our fund continues to be positive. Digital Transformation is expected to be an important business focus for the coming years, and the portfolio remains well positioned to benefit from the trends associated with the digital economy theme, such as online commerce, digital media consumption, electronic payments and digital transformation.

Performance

Performance chart

Period

1M
3M
6M
1Y
3Y
5Y
8Y
10Y
YTD
Since launch

Start date

End date

Past performance is not a reliable indicator as to future performance.
Performance calculations are net of management fees. Performance are shown as annual performance ( 365 days). In the case where the currency of the investor is different from the Fund’s reference currency the gains are capable of varying considerably due to the fluctuations of the exchange rate.

Performance table

End date

Performance table Net performance Reference index Start date End date
- - - - -
1M - - - -
3M - - - -
6M - - - -
YTD - - - -
1Y - - - -
2Y - - - -
3Y - - - -
5Y - - - -
10Y - - - -
Since launch - - - -
1y - - - -
2y - - - -
3y - - - -
5y - - - -
10y - - - -
Since launch - - - -
Y-1 - - - -
Y-2 - - - -
Y-3 - - - -
Y-5 - - - -

Risk table

End date

Risk table Fund volatility Benchmark volatility Tracking error Information ratio Sharpe ratio Beta Alpha
1M - - - - - - -
QTD - - - - - - -
3M - - - - - - -
6M - - - - - - -
YTD - - - - - - -
1Y - - - - - - -
3Y - - - - - - -
5Y - - - - - - -
8Y - - - - - - -
10Y - - - - - - -
Since launch - - - - - - -

Price table

Start date

End date

Price Date Portfolio AUM
- - -

NAV

First NAV date 25/10/17

Administration

Fees

Ongoing Charges 0.76%
Management fees 0.60%

Fund facts

Currency USD
Start date 24/10/17
Asset class FRAMLINGTON EQUITIES
Range AXA World Funds
Custodian State Street Bank Luxembourg S.C.A
Asset manager AXA Investment Managers UK Limited
Legal asset manager AXA Funds Management SA (Luxembourg)

Portfolio management

Fund Manager Jeremy GLEESON
Investment team MT Framlington Thematic Equity

Structure

Investment area Global
Legal form SICAV

Subscription and redemption

The subscription, conversion or redemption orders must be received by the Registrar and Transfer Agent on any Valuation Day no later than 3 p.m. Luxembourg time. Orders will be processed at the Net Asset Value applicable to such Valuation Day. The investor's attention is drawn to the existence of potential additional processing time due to the possible involvement of intermediaries such as Financial Advisers or distributors.The Net Asset Value of this Sub-Fund is calculated on a daily basis. Minimum initial investment: USD 5,000,000 or the equivalent in the relevant currency of the relevant Share class. Minimum subsequent investment: USD 1,000,000 or the equivalent in the relevant currency of the relevant Share class.

Literature