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AXA WF Framlington Global Small Cap
Last NAV 176.2500 USD as of 25/02/20
The Sub-Fund seeks to achieve long-term capital growth measured in USD by investing in small capitalisation companies worldwide.
Synthetic Risk & Reward Information scale
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?
Fund manager comment : 31/01/20
While fears on the trade war front seemed to have subsided following the agreement reached in mid-December between China and the US, the outbreak of the Coronavirus dampened investors' enthusiasm in the second half of the month. The disruptions induced by a shutdown of numerous production chains as well as the limitation of flows in the country in order to contain this epidemic as quickly as possible could weigh on economic growth if they were to last. In Europe, growth remains disappointing. The UK officially left the European Union on January 31st, paving the way for 11 months of negotiations to find new trade deals. Financial markets reacted in dispersed order. The S&P 500 was roughly stable over the period while Japan and Europe fell. As for interest rates, yield curves decreased and flattened, both in Europe and in the US, reflecting the nervousness of investors and their confidence in central banks’ ability to support the financial system. The Dollar appreciated against the Euro and the Yen. The British pound rose against the Euro, as did the Swiss Franc. After a breakthrough above the 60-dollar threshold linked to the tensions between Iran and the US earlier in the month, the oil price returned to around 50 dollars. Elsewhere, gold continued to rise, and volatility indices picked up. The S&P Global Small Cap Index (total return, net, USD) started the year on negative note (-2.7% in January), behind its large cap counterpart which edged -1.0% lower. While Asian small cap equities were dragged down by the coronavirus, UK equities also underperformed. Meanwhile, North America and Europe were slightly more resilient. As for sector performance, outside of energy that posted a strong underperformance due to collapsing oil prices, consumer and cyclical sectors (industrials and materials) were also laggards. Elsewhere, lower yields benefited utilities, while real estate and IT ended the month flat. In January, AXA WF Framlington Global Small Cap significantly outperformed its comparative index, thanks to a strong selection across many sectors, notably IT, healthcare, energy, consumer discretionary and industrials. Our stock picking marginally detracted from returns within real estate and communication services. As for sector allocation, our underweight exposure to real estate and utilities cost us, but tended to be offset by our underexposure to materials. In the technology sector, our software holdings (Blackline, Pluralsight and LivePerson) posted strong gains, while some other parts of the sector were avoided amid the Coronavirus outbreak, which could cause serious production disruptions. In this context, with a renewed go-to-market motion as well as an SAP partnership that should start to bear fruit, financial close automation software player Blackline performed well. Similarly, after a turbulent year in 2019, burdened by execution issues around its sales organisation, investors are turning increasingly positive on Pluralsight's ability to reaccelerate its growth. With healthcare, the fund benefited from its position in Teladoc. The US-based telemedicine specialist announced the acquisition of InTouch Health, a virtual care provider, which was well received by market participants. InTouch provides a technology platform that serves many health systems spanning the entire spectrum of care while Teladoc's existing platform is primarily sold to employers and health plans that utilize the Teladoc network of providers. In the utilities sector, Ormat performed well. The operator of renewable energy plants announced it amended a power purchase agreement at its Puna geothermal plants in Hawaii, allowing Ormat to expand contracted capacity by 21%, extend the current contract term by 25 years while also setting the electricity price at a fixed rate for the term of the contract, thus reducing Ormat's exposure to oil price fluctuations. In the energy sector, heavily penalised by falling oil prices, GTT held well as investors found confidence in the recent momentum in its order intakes. In the communication services sector, Future weighed on performance following the release of a short seller report. In its report, Shadowfall Research argues the publisher of special interest magazines and websites overstated its organic growth and acquired low quality assets. Given the strong performance posted last year, this took a toll on the shares. Within consumer discretionary, the fund benefited from its positions in Bright Horizons and Planet Fitness, as both stocks continued their rally without any fundamental news intervening. Less positively, Samsonite and Salvatore Ferragamo performed poorly, penalised for their exposure to China amid the Coronavirus outbreak. In the industrials sector, while Edenred and Exponent contributed positively, Mastec and Nihon M&A detracted from returns. Despite an outstanding stock performance these past three years, Edenred, a leading French player in lunch vouchers, is increasingly considered as a payment company and valued accordingly, thus providing support for the shares. On the other hand, Japanese M&A specialist Nihon posted disappointing results for its third fiscal quarter. Despite a good deal pipeline, the number of buyside transactions closed declined during the quarter, which, in view of its high valuation weighed on the stock. Finally, within financials, Japanese pet insurer Anicom and Indonesian bank BTPS progressed well. Less positively, while Norwegian digital player Sbanken suffered in line with the rest of the European banking sector, American reinsurance company RGA also gave way, penalised by fears related to the coronavirus as well as by a disappointing quarterly print. In terms of portfolio activity, we took profits on holdings such as Blackline, Nihon M&A Center, Bank of Hawaii, Planet Fitness, and Future while we exited Blackbaud. Conversely, we continued to build our positions in Ormat and UOL Group, and added to ID Logistics and Samsonite. At this stage in a context of geopolitical uncertainties around, the portfolio is managed under the assumption of no real recovery of the growth of world output and as such of corporate profits. Central banks cannot repeat their 2019 policy. The US Presidential election could be influential throughout the year. In that respect the portfolio is balanced to cope with any volatility or transition in investment regime.
|Reference index||Start date||End date|
|Performance table||Net performance||Reference index||Start date||End date|
|Risk table||Fund volatility||Benchmark volatility||Tracking error||Information ratio||Sharpe ratio||Beta||Alpha|
|First NAV date||07/01/13|
|Asset class||FRAMLINGTON EQUITIES|
|Legal authority||Commission de Surveillance du Secteur Financier|
|Fund Manager||Isabelle DE GAVOTY|
|Co-manager||Antoine DE CREPY|
|Investment team||MT Framlington Small Cap Equity|
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.