AXA IM rebrands fund to invest for social progress
- 12 April 2021
- AXA Investment Managers (AXA IM) has announced it will rebrand the AXA WF Framlington Women Empowerment Fund, with a view to broaden its social investing lens and align the strategy with AXA IM’s wider corporate purpose (‘Act for Human progress by investing for what matters’).
- The newly named AXA WF Framlington Social Progress Fund will continue to be managed by Anne Tolmunen and will invest in companies which make a positive societal contribution.
Launched in 2017, the AXA WF Framlington Women Empowerment fund invested in companies which were fostering gender diversity. As of April 10, the fund is renamed AXA WF Framlington Social Progress and expands its investment universe to address more widely all of the United Nations Sustainable Development Goals with a social focus.
The fund will invest in companies that address a range of social needs ranging from the most basic to more advanced needs that sustain human progress. The scale of unmet social needs creates opportunities for companies to improve outcomes for underserved people in both developing and developed countries.
The Sub-Fund of the Luxembourg-domiciled SICAV seeks both long-term growth and a sustainable investment objective by selecting companies that create financial and societal value by fostering social progress.
The Fund adopts a socially responsible “selectivity’ approach” selecting the best issuers based on their contribution to the socially-focused United Nations Sustainable Development Goals (“social UN SDGs”). This selective approach consists of reducing by at least 20% the investment universe, using a combination of external and internal SDGs alignment data.
The strategy is articulated around three critical areas of social needs:
- Access to affordable housing, essential infrastructure and financial & digital inclusion (UN SDGs 8, 9, 11);
- Protection through healthcare solutions and safety (UN SDGs 2, 3, 11,16);
- Progress by investing in companies which foster education, and entrepreneurship and wellbeing (UN SDGs 4, 5, 8, 9).
See Fig 1. below for a comprehensive look at the UN SDGs the strategy measures against.
The fund is part of AXA IM’s ACT fund range1 , having been categorised as an Article 9 product according to the EU Sustainable Finance Disclosure Regulation (SFDR), and applies AXA IM’s Impact approach for listed assets, where the portfolio manager uses an impact approach in the securities selection process. Five percent of the management fees paid by the fund will continue to be donated by AXA IM to several charities supporting education (Epic Foundation), biodiversity & climate and health initiatives (Access to Medicine Foundation) among others. The Fund has received the French SRI label.
Anne Tolmunen, portfolio manager of the AXA WF Framlington Social Progress Fund, explains why investing in social progress makes sense: “At AXA IM, we strongly believe that as investors, we have a role to play in society, in shaping a more sustainable future not only for our clients, but also for our communities and the world we live in. With our social progress strategy, we are reinforcing our purpose.”
“We expect around 15% of adults globally (1 billion) to remain unbanked by 20222 and in 2016, 1.9 million deaths could have been prevented with adequate safe water, sanitation and hygiene3 . There is still so much that needs to be done to foster social progress, and finance has a key role to play through the companies we, as an active asset manager, are investing in. This is the reason why we are expanding the investment universe of the fund.”
“The economic empowerment of women will continue to form a critical area of focus within the Social Progress fund, while promoting gender diversity in the workplace will continue to be a cornerstone of AXA IM’s active ownership agenda addressed through our reinforced engagement and voting capabilities4 and other initiatives such as the 30% Club Investor Group in France and in the UK5 ”.
The fund is registered and available to professional and retail investors in Austria, Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Portugal, Singapore (restricted scheme only), Spain, Sweden, Switzerland and the UK.
ESG data
The ESG data used in the investment process are based on ESG methodologies which rely in part on third party data, and in some cases are internally developed. They are subjective and may change over time. Despite several initiatives, the lack of harmonized definitions can make ESG criteria heterogeneous. As such, the different investment strategies that use ESG criteria and ESG reporting are difficult to compare with each other. Strategies that incorporate ESG criteria and those that incorporate sustainable development criteria may use ESG data that appear similar, but which should be distinguished because their calculation method may be different.
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Disclaimer
Note to editors
Risks
Risk of capital loss: The fund is mainly invested in equities, thus there is a risk that the investors may not get back totally or partially their initial or subsequent investments in the fund.
ESG risks: The integration of ESG and sustainability criteria into the investment process may exclude securities of certain issuers for reasons other than investment and, therefore, certain market opportunities available to funds that do not use ESG or sustainability criteria may be unavailable to the SICAV, and its performance may sometimes be better or worse than that of comparable funds that do not use ESG or sustainability criteria.
Impact Investments risk: AXA IM’s impact approach for listed assets can limit the investment universe to assets that meet specific criteria in relation with the Sustainable Development Goals established by the United Nations (intentionality, materiality, additionality, negative externality and measurability). As a result, their respective performance may be different from a fund implementing a similar investment strategy without Impact approach. The selection of assets may in part rely on third party data appreciated at the time of investment that may evolve over time.
Counterparty risk: Risk of bankruptcy, insolvency, or default of a counterparty of the sub-fund, which could lead to payment or delivery default.
Equity risk: The price of shares may fluctuate in line with investors' expectations or forecasts, which may lead to a risk of high volatility.
Risks linked to investments in emerging markets: Price and currency volatility in emerging markets is generally higher than in mature markets. Emerging market securities may also be less liquid.
Risks associated with global investing: Securities issued or listed in different countries may require the application of different standards and regulations and may be affected by changes in exchange rates.
Geopolitical risk: Investments in securities issued or listed in different countries may involve the application of different standards and regulations. Such investments may be affected by changes in foreign exchange rates, the laws or restrictions applicable to such investments, exchange control regulations or price volatility.
Risks linked to investments in small and micro capitalisation universe: Small and micro-cap stocks are less liquid.
Investments in specific sectors or asset classes: Some funds concentrate their investments in certain specific asset classes or in companies in certain economic sectors and are therefore exposed to the risks associated with concentrating investments in these classes or sectors. This type of strategy makes them vulnerable in the event of a decline in the value or liquidity of these asset classes or sectors.
Notes to editors:
Figure 1: Three key sub-themes aligned with UN SDGs
About Anne Tolmunen
Anne Tolmunen is a Global Portfolio Manager at AXA IM Framlington Equities since 2012. Anne is the lead portfolio manager for the AXA WF Framlington Social Progress Fund (formerly known as the Women Empowerment Fund) since 2017. Anne is also the lead Portfolio Manager for the AXA WF Framlington Global Talents Fund. Anne joined AXA Investment Managers in January 2007. Anne worked previously as an auditor at Société Générale Bank (Inspection Générale) and at Arthur Andersen.
Anne holds a Master’s degree from ESSEC and is a CFA charterholder.
About AXA Investment Managers
AXA Investment Managers (AXA IM) is a responsible asset manager, actively investing for the long-term to help its clients, its people and the world to prosper. Our high conviction approach enables us to uncover what we believe to be the best global investment opportunities across alternative and traditional asset classes, managing approximately €858 billion in assets as at the end of December 2020.
AXA IM is a leading investor in green, social and sustainable markets, managing €555 billion of ESG-integrated, sustainable and impact assets. We are committed to reaching net zero greenhouse gas emissions by 2050 across all our assets, and integrating ESG principles into our business, from stock selection to our corporate actions and culture. Our goal is to provide clients with a true value responsible investment solution, while driving meaningful change for society and the environment.
AXA IM employs over 2,440 employees around the world, operates out of 27 offices across 20 countries and is part of the AXA Group, a worldwide leader in insurance and asset management.
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