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AXA WF Framlington Global Small Cap

ISIN LU0868491274

Last NAV 143.3500 USD as of 30/03/20

Overview

Investment objectives

The Sub-Fund seeks to achieve long-term capital growth measured in USD by investing in small capitalisation companies worldwide.

Risk

Synthetic Risk & Reward Information scale

1 2 3 4 SRRI Value 5 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 are subject to some levels of variation, which may result in 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. Geopolitical Risk: investments in securities issued or listed in different countries may imply the application of different standards and regulations. Investments may be affected by movements of foreign exchange rates, changes in laws or restrictions applicable to such investments, changes in exchange control regulations or price volatility. Liquidity Risk: risk of low liquidity level in certain market conditions that might lead the Sub-Fund to face difficulties valuing, purchasing or selling all/part of its assets and resulting in potential impact on its net asset value.

Investment horizon

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

Fund manager comment : 29/02/20

Despite containment measures implemented in China, new outbreaks were identified in mid-February in South Korea, Iran and Italy, raising fears of a global epidemic and a global recession. Faced with the collapse of equity indices, some central banks, including the Fed, could act faster than expected. In the US, despite a relatively low number of cases, the partial shutdown of the production in China is beginning to be felt in the latest surveys, with both the manufacturing and services PMIs showing signs of deteriorations. This led Fed Chairman Jay Powell to step in and state that the Fed would use its tools and act as appropriate if the coronavirus was to pose more risks to economic activity. Meanwhile, Europe has not managed to escape the spread of the virus. Italy was on the frontline with around 1,700 cases identified while France and Germany have reported 130 cases. Yield curves, both in Europe and the US, decreased significantly, with the ten-year US Treasury note hitting new lows while the German ten-year yield now sits in even deeper negative territory. Over the first half of the month, the dollar strengthened considerably against the euro, but then reversed its gains toward the second end of the month. Elsewhere, oil prices continued to fall while volatility indices spiked. In this context the S&P Global Small Cap Index (total return, net, USD) posted a negative performance over the month (-8.88% in February), behind its large cap counterpart closing the month down 7.86%. While Asian small cap equities were dragged down by the coronavirus, UK equities also underperformed. Meanwhile, the rest of Emerging Markets and Europe were slightly more resilient. As for sector performance, energy companies continued to underperform due to collapsing oil prices, and cyclical sectors like materials, industrials, financials and consumer discretionary were also laggards due to fears of a macro slowdown. Elsewhere, health care and IT were less impacted by the selloff thanks to their less cyclical features. In February, AXA WF Framlington Global Small Cap significantly outperformed its comparative index, thanks to a strong selection across several sectors, notably consumer discretionary, healthcare and industrials. On the other hand, stock picking detracted from returns within the financial and communication services sectors. Sector allocation also contributed to the fund’s outperformance. Our overweight to consumer discretionary cost us but tended to be offset by our underexposure to materials. In a declining market, our cash allocation had a positive contribution. Within consumer discretionary, IDP Education, an Australian educational service provider, significantly outperformed on the back of strong results reassuring the market on its growth profile. Bright Horizon Family Solution, a childcare and early educational service provider, also contributed positively after the publication of solid results. The company continued to increase its sales density within its customer base and showed an ongoing market share gain as testified by the pipeline of new business. On the negative side, IBJ, the Japanese marriage consulting company, experienced a sharp price correction, due to fears arising from the virus outbreak and events restriction in the region. Within health care, Teladoc Health contributed positively. The Telemedicine provider published strong results with significant membership growth in the past year. The trend is expected to continue over 2020, testifying the ongoing penetration of telemedicine within the industry. On the short-term, the company is well positioned if the coronavirus outbreak were to continue. In the industrial sector, the fund benefitted from Exponent, a US based engineering and scientific consulting business. The company’s results showed resilience in its business model as well as the efficiency of its new proactive sales strategy. On a less positive note, MasTec, a leading North American infrastructure company focused on telecommunications, oil & gas and power markets, detracted to fund performance. Notwithstanding the fact that the company is well positioned to benefit from the 5G deployment, the drop-in oil prices might have hurt investor sentiment. In the IT sector, RealPage, Blackline and Edenred performed strongly while LivePerson and BenefitFocus were penalized. RealPage, a software and data analytics provider for the real estate industry, and Blackline, a leader in finance and accounting software, both posted good results. The former anticipated a reacceleration of its organic growth, and the latter confirmed its ongoing market penetration above expectations both on reported figures as well as for 2020. EdenRed, a leading player in employee benefits and payment solutions, continued to be sought after thanks to new growth opportunities both in terms of services and new geographies. On the other hand, LivePerson, despite an improving top-line, has been heavily penalized by increased needs for investment. BenefitFocus continued to suffer on investors’ concerns over its 2020 trajectory. Within communication services, New Work, the professional social network in the DACH region, detracted to fund performance. The company published its full year results with solid growth and margin expansion, but the growth level continued to slowdown as a result of declining job openings in Germany and a slower penetration of the B2B segment. Within Financials BTPS, an Indonesian financial service provider focused on financing women micro entrepreneurs, detracted to fund performance. The stock was prone to profit taking following the strong performance. In terms of portfolio activity, we took profits on holdings such as Bank of Hawaii and Teladoc. We reduced our exposure to Pluralsight and exited BenefitFocus. On the other hand, we opened a new position in Pool, the leading US wholesaler of swimming pool supplies and reinforced our positions on Samsonite, Trainline, Kemper, ID Logistic and LivePerson.

Performance

Performance chart

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Risk table

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Price table

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NAV

First NAV date 07/01/13

Administration

Distribution country

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

Fees

Ongoing Charges 1.16%

Fund facts

Currency USD
Start date 07/01/13
Asset class FRAMLINGTON EQUITIES
RI fund yes
Legal authority Commission de Surveillance du Secteur Financier

Portfolio management

Fund Manager Isabelle DE GAVOTY
Co-manager Antoine DE CREPY
Investment team MT Framlington Small Cap 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.

Literature