Warning: members of the public are being contacted by people claiming to work for AXA Investment Managers UK Limited.  Find out more information and what to do by clicking here.

AXA Framlington Global Technology Fund

  • 20 July 2022 (5 min read)

Economic gloom and geopolitical mayhem won’t deter the megatrends driving the tech sector

  • Tech stocks have suffered as sentiment turned risk off and investors moved away from growth
  • Positive earnings data demonstrates the underlying strength of our holdings
  • We believe the long-term drivers of growth and profitability in the tech sector will continue beyond the current market disruption

Living through interesting times

It has been a tumultuous start to the year for investors. Rising inflation and the monetary tightening from central banks in response have reduced the allure of growth stocks, while geopolitical events and a general sense of economic gloom have dampened investor appetite for risk.

This has weighed on the tech sector in particular, and as a result, the AXA Framlington Global Technology Fund has, in common with peers, been down over 2022 so far. Over the year to date, the Fund has returned -24.7%, while the benchmark MSCI World Information Technology index return has been -21.6% (Source: Factset/Morningstar as at 30 June 2022, in sterling terms, A GBP share class, net of fees and with dividends reinvested).

Sustained drawdowns obviously encourage us to look again at our assumptions and re-assess: does the investment case for tech still stand up?

We think it does.

Strong fundamentals contradict the negative sentiment

Higher inflation and rising rates are playing on the minds of growth investors. However, returns during the previous rate-tightening cycle suggest that tech is resistant to some of the forces that impact other growth stocks. Between 17 December 2015 and 20 December 2018, the Fed tightened rates by 2.5 percentage points. Over that period, the MSCI AC World Technology index outperformed the MSCI AC World index by 29% (including income, US$/GBP basis, source: Bloomberg).

It’s also worth noting that despite the turn in investor sentiment, many tech companies remain in robust health. Of the companies which we invest in within the Global Technology Fund that have reported first quarter results for 2022, 75% have delivered better than expected revenues and earnings, suggesting that these businesses continue to grow faster than what was expected of them.

Balancing short-term uncertainty against long-term secular growth

Our positive long-term view of the sector is embedded in AXA Investment Managers’ larger analysis of clear megatrends that are driving certain economic, corporate, social and technological themes. These themes all have two fundamental drivers in common – demographic shifts, and – most pertinently for this fund – technological changes and accelerating capabilities.

Put very simply, the adoption of technology in our everyday lives is only going to increase. This will drive innovation and market share, relative to traditional industries, creating new opportunities throughout the sector.

Over the long-term, we believe that technology companies are likely to expand more quickly than inflation. Themes we are exposed to include the shift from physical cash to electronic payments, online security, and IT companies that help businesses adopt a digital ethos for their customers and employees.

Diverse opportunities driven by market expansion and innovation

With these long-term trends in mind, we think the market disruption is opening up some interesting opportunities. While the bottom of the market is hard to call, and we are therefore acting with caution, market conditions introduce the prospect of adding to our favoured holdings or opening positions in stocks we might previously have seen as attractive but overvalued.

Key sectors we are looking at include the following:


Already in high demand before the pandemic, semiconductors benefited from increased adoption of digital technology for work and entertainment during lockdown. Low supply since then – caused by disruption to manufacturing, transport, and infrastructure over the pandemic – has created further scarcity.

Some of our best-performing stocks over the past 12 months have been in the semiconductors space. These include onsemi (a supplier of analogue chips used in applications such as power management in a variety of end-markets including automotive and industrial) and Cadence Design Systems (a provider of Electronic Design Automation (EDA) software tools used in the semiconductor design process).

Market leaders with brand loyalty and pricing power

As a knock-on effect of the semiconductor shortage, some popular products have become hard to come by – anyone who’s tried to buy a MacBook Pro M1 Max over the past year will have experienced this. But consumers have shown that they are prepared to wait rather than compromise, particularly those with specialised and higher-spec needs.

This is in part due to brand loyalty to Apple, and to the ubiquity of its suite of products in certain creative and design industries. Increasingly demanding video capabilities in 4K and 8K definition are only going to require more powerful chips and capabilities to fulfil the growing and insatiable need for high-quality online content generation.

Payment companies

The lifting of travel restrictions related to Covid will help payment companies that enable cross-border transactions, such as Visa. We also hold a position in FIS, who provide payment services for hotels, restaurants, and other venues that are seeing business increase as people get out and about again.


Digital advertising continues to grow, albeit at a slower pace as economic headwinds prevail. The conflict in the Ukraine has also impacted this aspect of discretionary spending. 

However, advertising via online channels has been demonstrated to be successful. When marketing budgets improve, the likes of Alphabet (the company behind brands such as Google and YouTube) and Meta Platforms (Facebook, Instagram and WhatsApp) are likely to benefit from a pick-up in spending.


One prominent theme in the Fund is cybersecurity, which continues to benefit from a strong need for companies and governments to help protect themselves, their employees and customers from multiple threats.  Companies like Palo Alto Networks have demonstrated good growth as their customers understand the ongoing need to defend their assets from malicious cyber activity.

Digitising businesses

The need for companies to modernise and digitalise their businesses continues. We have been seeing good results from companies involved in many different aspects of this, from consulting businesses such as Endava and providers of software services such as ServiceNow and Salesforce.


During what might continue to be a volatile period, it is important to remain focused on our investment philosophy. For 15 years we have been well served by investing in companies that address a long-term opportunity rather than chasing niches or fads. We continue to believe in our thematic approach to identifying opportunities with long duration and significant growth potential.

Companies shown are for illustrative purposes only as of 30/06/2022 and may no longer be in the portfolio later. It does not constitute investment research or financial analysis relating to transactions in financial instruments, nor does it constitute an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.


Source: Factset/Morningstar as at 30 June 2022, in sterling terms, A GBP share class, net of fees and with dividends reinvested. The Fund’s official benchmark is the MSCI World Information Technology Index, provided for comparison purposes. 

Past performance is not a reliable indicator of future results.

The value of investments may fall as well as rise and you may not get back the full amount invested.

Single Sector Risk: as this Fund is invested in a single sector, the Fund's value will be more closely aligned with the performance of that sector and it may be subject to greater fluctuations in value than more diversified funds.

Currency Risk: the Fund holds investments denominated in currencies other than the base currency of the Fund. As a result, exchange rate movements may cause the value of investments (and any income received from them) to fall or rise affecting the Fund's value.

Further explanation of the risks associated with an investment in this Fund can be found in the prospectus.

Have our latest insights delivered straight to your inbox

Subscribe to updates.

Related Articles


Meet The Managers - Q&A with Chris Eccles and Catherine Tennyson

  • by Chris Eccles, Catherine Tennyson
  • 08 April 2024 (5 min read)

UK equity: The not-so poor relation


Investing in tech for sustainability

  • by Ashley Keet
  • 27 March 2024 (5 min read)


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

    This marketing 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.

    For more information on sustainability-related aspects please visit https://www.axa-im.com/what-is-sfdr

    For investors located in the European Union: Please note that the management company reserves the right, at any time, to no longer market the product(s) mentioned in this communication in the European Union by filing a notification to its supervision authority, in accordance with European passport rules.

    In the event of dissatisfaction with AXA Investment Managers products or services, you have the right to make a complaint, either with the marketer or directly with the management company (more information on AXA IM complaints policy is available in English: https://www.axa-im.com/important-information/comments-and-complaints ). If you reside in one of the European Union countries, you also have the right to take legal or extra-judicial action at any time. The European online dispute resolution platform allows you to submit a complaint form (available at: https://ec.europa.eu/consumers/odr/main/index.cfm?event=main.home.chooseLanguage) and provides you with information on available means of redress (available at: https://ec.europa.eu/consumers/odr/main/?event=main.adr.show2).

    Summary of investor rights in English is available on AXA IM website https://www.axa-im.com/important-information/summary-investor-rights. Translations into other languages are available on local AXA IM entities’ websites.

    AXA Framlington Global Technology Fund is a part of AXA Framlington Range of Authorised Unit Trust Schemes and is managed by AXA Investment Managers UK Limited, part of the AXA IM Group.

    AXA Investment Managers UK Limited, is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales No: 01431068. Registered Office: 22 Bishopsgate, London EC2N 4BQ. In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries. 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.

    Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.  No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

    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: 22 Bishopsgate London EC2N 4BQ

    In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.

    The AXA Framlington Global Technology Fund is recognised by the UK Financial Conduct Authority and is available for sale in the UK.

    Risk Warning

    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. 

    Are you an IFA or other Professional Investor ?

    Are you a financial advisor, institutional, or other professional investor?

    This section is for professional investors only. You need to confirm that you have the required investment knowledge and experience to view this content. This includes understanding the risks associated with investment products, and any other required qualifications according to the rules of your jurisdiction.