AXA IM Sustainable Equity Strategy

What is factor investing?

Factor investing is an investment approach that aims to offer investors a cost effective and transparent way to improve risk and return by capturing specific equity characteristics such as quality, low volatility, value and momentum. 

Why consider factor investing?

Factor investing can be efficient, cost effective and provides investors with diversified exposure to equity markets.  Importantly, individual factors may offer different patterns of risk and return and, as such, investors can use factor investing to better target specific investment goals.  Investors may choose to target just one factor or mix factors in a way that best matches their investment needs. 

Our approach to factor investing

We have developed an advanced approach to factor investing that is anchored to company fundamentals.  Our factors benefit from value-added proprietary data and incorporate controls which aim to reduce unnecessary investment risk. 

We offer blended factor strategies designed to meet specific investment needs. The Sustainable Equity strategy aims to provide exposure to the Low Volatility and Quality factors and fully integrates ESG considerations. The result is a portfolio that seeks to provide superior, long-term equity returns but with lower total volatility than a standard market capitalization-weighted index.  By design, we would expect this strategy to perform best during down markets while capturing equity returns in rising markets.

Why does sustainable investing matter? 

Sustainable investing is a way of making investment decisions which aim to deliver financial returns and a benefit to society at the same time. It directs investment to companies that seek to promote corporate responsibility while seeking to fight against climate change and environmental destruction.

While Environmental, Social and Governance (ESG) investing is not a new concept, it contains economic information, which defines a company’s profile. Having measurable, reportable and trackable results of companies helps asset managers address these global challenges and define appropriate sustainable investing strategies. It offers investors seeking ESG orientation in their portfolios a transparent way to improve risk and return.

Role in a portfolio

  • Core element of a global equity allocation

  • Specific exposure to quality, low-volatility factors

  • Entry point to diversified ESG exposure

  • Diversifier across geographies and market cap

Strategy Highlights

  • Expenses capped at 35bps

  • Focused on companies that deliver sustainable earnings, to create a defensive portfolio

  • ESG Integration to mitigate risks and potentially improve long term returns

Research Ratings

Qualitative Ratings

Quantitative Ratings

For investors aiming for more sustainable outcomes through ESG integration

What are the risks associated with this strategy

Company specific risk: There may be instances where a company will fall in price (or rise in price) because of company specific factors (for example, where a company’s major product is subject to a product recall).

Highly volatile markets: The prices of financial instruments in which the strategy may be invested can be highly volatile.

Market risk: Changes in legal and economic policy, political events, technology failure, economic cycles, investor sentiment and social climate can all directly or indirectly create an environment that may influence (negatively or positively) the value of your investment in the strategy. In addition, a downward move in the general level of the financial markets can have a negative influence on the strategy.

Please note all investments carry risks. Including but not limited to systematic investing risk, emerging markets risks, investment selection risk, currency management risk, fund risk, parent company discretion risk, depositary receipts risk, liquidity risk, operations risk, legal risk and borrowing risk. For additional information, please read the Product Disclosure Statement.

 

More information

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The information contained in this document is not an indication whatsoever of possible future performance and must be considered on this basis. Where information, contents or materials are provided by or quoted from any third party (“Third Party Information”), AXA IM Asia does not accept any responsibility or liability for such Third Party Information, and cannot and does not provide, and shall not be taken to provide, any warranty as to the accuracy, suitability, completeness or correctness of such Third Party Information. Any views, opinions or recommendations (if any) that may be contained in such Third Party Information, unless otherwise stated, do not reflect or constitute views, opinions or recommendations of AXA IM Asia. This document has been prepared without taking into account the specific personal circumstances, investment objectives, financial situation or particular needs of any particular person. Nothing contained within this document shall constitute an offer to enter into, or a term or condition of, any business, trade, contract or agreement with the recipient or any other party. This document shall not be deemed to constitute investment, tax or legal advice, or an offer for sale or solicitation to invest in any particular fund. If you are unsure about the meaning of any information contained in this document, please consult your financial or other professional advisers. The data, projections, forecasts, anticipations, hypothesis and/or opinions herein are subjective, and are not necessarily used or followed by AXA IM Asia or its affiliates who may act based on their own opinions and as independent departments within the organization. Investment involves risks. You should be aware that investments may increase or decrease in value and that past performance is no guarantee of future returns, you may not get back the amount originally invested. Investors should not make any investment decision based on this material alone.

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The Lonsec Rating (assigned January 2020) presented in this document is published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421445. The Rating is limited to “General Advice” (as defined in the Corporations Act 2001 (Cth)) and based solely on consideration of the investment merits of the financial product. Past performance information is for illustrative purposes only and is not indicative of future performance. It is not a recommendation to purchase, sell or hold AXA Investment Managers product, and you should seek independent financial advice before investing in this product. The Rating is subject to change without notice and Lonsec assumes no obligation to update the relevant document(s) following publication. Lonsec receives a fee from the Fund Manager for researching the product using comprehensive and objective criteria. For further information regarding Lonsec’s Ratings methodology, please refer to our website at: http://www.lonsecresearch.com.au/research-solutions/our-ratings

The RIAA Certification Symbol signifies that a product or service offers an investment style that takes into account environmental, social, governance or ethical considerations. The Symbol also signifies that the AXA IM Sustainable Equity Fund has adopted strict disclosure practices required under the Responsible Investment Certification Program for the category of Product Provider. The Certification Symbol is a Registered Trade Mark of the Responsible Investment Association Australasia (RIAA). Detailed information about RIAA, the Symbol and AXA Investment Managers methodology, performance and stock holdings can be found at www.responsibleinvestment.org, together with details about other responsible investment products certified by RIAA. The Responsible Investment Certification Program does not constitute financial product advice. Neither the Certification Symbol nor RIAA recommends to any person that any financial product is a suitable investment or that returns are guaranteed. Appropriate professional advice should be sought prior to making an investment decision. RIAA does not hold an Australian Financial Services Licence.

The Zenith Investment Partners (ABN 27 103 132 267, AFS License 226872) (“Zenith”) rating (assigned 27 November 2019) referred to in this piece is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at www.zenithpartners.com.au/RegulatoryGuidelines

The AXA IM Sustainable Equity has received Silver Morningstar Analyst Rating™ as of 21/04/2020. The Overall Morningstar Rating™ out of 225 Equity World Large Blend funds as of 30/06/2020 for AXA IM Sustainable Equity is 4 Stars. © 2020 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. 

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