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AXA WF Framlington Digital Economy

ISIN LU1684369710

Last NAV 127.8400 EUR as of 06/03/20

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:

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.
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.
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.

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. The Share Class aims at hedging the foreign exchange risk resulting from the divergence between the reference currency of the Sub-Fund and the currency of this Share Class by using derivatives instruments whilst retaining the exposure to Investment Policy of the Sub-Fund.

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

KIID 20/02/2020

Prospectus 19/02/2020

Fund Factsheet B2B 01/2020

Fund manager comment : 31/01/20

Performance & Market environment Global Equity markets rose at the start of January before declining as the month progressed due to the emergence of the coronavirus in China, with the MSCI ACWI falling 1.1%. In the US, geopolitical tensions seem to be easing, with the Phase 1 trade deal signed between the US and China. The Fed kept its benchmark interest rates on hold, citing continued signs of a healthy economy, supported by a high level of employment and solid household spending. At the end of January, the UK exited the European Union, and with a transition agreement likely in place until at least the end of 2020, companies can start to make investment decisions and plan for a future with the UK outside of the bloc. In Asia, most of the focus was around the coronavirus outbreak. Whilst it is too early to tell the full impact this will cause, we would expect a slowdown on economic activity in China as travel restrictions have been put in place during one of the busiest periods of the year. Q4 earnings season has now commenced and while it’s too early to draw broad conclusions, it seems like Q4 has seen largely positive results. A number of our holdings are more US centric, therefore the portfolio has been less impacted by the coronavirus situation. During January, our exposure to the Data & Enablers theme contributed the most to performance, with cloud-based Information Technology Operations Management (ITOM) software player ServiceNow reporting good results. Zendesk, cloud-based customer service platform and Salesforce, enterprise cloud computing solutions provider targeting the sales, customer service, marketing and cloud platform markets also performed well during the month. Our exposure to the Delivery theme was the main detractor to performance, mostly driven by the current uncertainty surrounded by the coronavirus situation. For the same reasons, from an individual stock perspective, Online Travel Agent Booking.com underperformed. Portfolio Activity During the month we started a position in EPAM Systems, an IT Services business with a focus on helping customers with their digital transformations. The investment will sit alongside our existing exposure to this opportunity via Globant and Endava. We also began a position in Global Payments, a fintech play on digital payments. We sold our investment in eBay, as the sum of the parts opportunity has now largely played out, and we believe that the core auction business continues to cede market share. We also sold our position in Trip.com, largest online travel agency in China, as substantial travel restrictions have been put in place in China over the holiday period to try and contain the virus outbreak and the situation remains uncertain. Market Outlook Our investments in the portfolio have generally had a strong start to the year, with optimism over trade deals helping lift stocks and, for the companies having reported so far, results have been relatively good. Companies associated with the Digital Economy and the multiple secular growth drivers continue to underpins the healthy demand for innovative solutions to help businesses become more digital, productive and efficient. With the current uncertainty raised by the coronavirus outbreak, it is not surprising to see an increase in volatility and some profit taking. 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. According to Gartner, worldwide enterprise IT spending in 2020 is forecast to rise 3.8% in 2020; which in our view remains a healthy level of spend. Areas such as digital transformation, cybersecurity and cloud computing, which are all well represented in the fund, are expected to benefit from this growth in spending. 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

10Y

YTD

Since launch

Start date

End date

The figures provided relate to previous months or years and past performance is not a reliable indicator as to future performance. The Fund may not have a reference index. In such case, the Fund’s performance indicator is given as a basis for comparison only.

SRRI stands for Synthetic Risk & Reward Information: From 1 lower risk to 7 higher risk. Lower risk has potentially lower reward and higher risk has potentially higher reward. 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.

Benchmark

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Risk table

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Price table

Start date

End date

Price	Date	Portfolio AUM
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NAV

First NAV date	25/10/17

Administration

Distribution country

Distribution countries
Austria
Belgium
Denmark
Finland
France
Germany
Italy
Luxembourg
Netherlands
Norway
Singapore
Spain
Sweden
Switzerland

Fees

Ongoing Charges	1.78%

Fund facts

Currency	USD
Start date	24/10/17
Asset class	FRAMLINGTON EQUITIES
RI fund	False
Legal authority	Commission de Surveillance du Secteur Financier

Portfolio management

Fund Manager	Jeremy GLEESON
Co-manager	Tom RILEY
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.