investing in the future innovations in thematic …...ecommerce penetration by country (% of total...

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INVESTING IN THE FUTUREInnovations in thematic investing

Matthew Lovatt – Global Head of AXA IM Framlington Equities

15 October 2019

For professional clients only. Not to be relied upon by retail clients.

Investments involve risks, including loss of capital.


Source: AXA IM, Visual Capitalist, BofAML Global Research, “Transforming the world – The 5 next years” October 2018.

Automotive Electricity Television Computer Mobile Internet Facebook WeChat

62

45

22

14 127 4 1

Years taken to hit 50 million users

Companies’ average lifespan in S&P500

1955: 61 years 2015: 17 years

Change…


Evolving economy investment themes

For illustrative purposes only.

ConnectedConsumer

E-commerce & FinTech

Software & Cloud

AI & Analytics

Transitioning Societies

Ageing & Lifestyle

CleanTech

Clean Energy

Smart Grid

Sustainable resources

RoboticsInternet of Things

Energy efficiency

Silver spending

Wellness and prevention

HealthTech

Automation

Social mobilityBasic needs

Urbanisation


For illustrative purposes only.

Old economy investment themes

Fossil Fuels

Diesel TransportOffshoring

Labour intensive processHardware

Desktop

Man-made medicine

Shorter retiring life

Quantityover Quality

Disease related drugs

High StreetRetail

Shopping malls & physical payments

TraditionalManufacturing

Brown-outs

Dependant cities

ScarceResources

Polarised wealth

Extreme povertyRural isolation

Old World


0

5

10

15

20

25

Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19

Historic performance of Evolving Economy vs Old Economy universe

Source: AXA IM, FactSet as at 30/06/2019. Graph is updated on a quarterly basis. For illustrative purposes only. Past performance of the AXA IM constructed thematic universes are not a guide to future performance. The figures provided do not relate to actual portfolios in the strategy. Actual portfolios are subject to the risks of portfolio management and trading, including but not limited to trading costs, market impact and fill rates, and may not resemble the universes presented herein as a result. The relative benchmark for the thematic universes is the S&P Global Broad Market Index. The returns and fundamental characteristics presented are for thematic universes constructed by AXA IM – Ageing & Lifestyle, Connected Consumer, Automation, CleanTech and Transitioning Societies. Thematic universe inclusion is based on revenue exposure and constituent weightings of the S&P Global Broad Market Index. The “Evolving Economy” universe contains index constituents with high or medium exposure to our themes. The “Old Economy” universe contains constituents with low and no exposure, which accounted for circa 40% of the S&P Global Broad Market Index market capitalisation as of 30/06/2019. The weighted average of the universes will equal the S&P Global Broad Market Index. CR09360/05-19

Evolving Economy vs Old EconomyRelative performance - 5 years to June 2019

23+ %

Evolving Economy +7.9%

Old Economy +4.3%

Return - 5YR Ann


Thematics exposure by sector

Source: FactSet/AXA IM - Thematic exposure by GICS sector within the S&P Global BMI. Companies with high or medium exposure to a theme considered thematic as at 30/06/2019. CR09360/05-19

0

2

4

6

8

10

12

14

16

18

CommServices

Cons Disc ConsStaples

Energy Financials Health Care Industrials Info Tech Materials Real Estate Utilities

Old Economy

Transitioning Societies

CleanTech

Automation

Connected Consumer

Ageing & Lifestyle


TRANSITIONING SOCIETIES

Source: AXA IM / OECD. For illustrative purposes only. Past performance is not a guide to future performance. No guarantee or representation is made that investmentobjectives stated will be achieved Each specific client or investors’ experience may vary. CR09360/05-19

137

1152

181375341

1152

313

3078

Africa &Middle East

"Developed"World

Latin America DevelopingAsia

2010 2030

1.8bn to

4.9bn

EM World’s Middle Class is growingPo

pu

lati

on

in m

illio

n


45%

55%

AGEING & LIFESTYLE

Source: Top chart: United Nations, Department of Economic and Social Affairs, Population Division (2017).Bottom chart: McKinsey Global Institute. Urban World: The Global Consumers to Watch, April 2016.

84%

16%

+42% growth(+c.400m people)

USA

Consumption growth

…and will dominate consumption growth in healthcare and multiple industries

Share of population

1.4bn

1.0bn

2030

2018

Over 60s population will grow 5 times faster than the under 60s population…

Bigger than the 3rd largest

countryin the world

60+ yrspopulation (bn)


What % of global retail sales are transacted online ?

Source: AXA IM for illustrative purposes only.

• <15%• 15-30%• 30-50%• >50%• I don’t have the internet


CONNECTED CONSUMER

Online continues to take market share

14% (2018)22% (2023,E)

24% (2018)

34% (2023,E)

12% (2023,E)9% (2018)

eCommerce penetration by country(% of total sales)

Millenials are key

15.6 15.1

Millenials Baby Boomers

$173$203

Millenials Baby Boomers

Average amount spent per transaction(USD)

Average number of online transactions(per person per year)

17% (2018)

21% (2023,E)

5% (2018)9% (2023,E)

Source: LH Chart: Global Online Consumer Report, KPMG International 2017. RH Chart: Euromonitor, William Blair, Retail in a digital world, 2018. For illustrative purposes only. Past performance is not a guide to future performance.


How many robotic surgery procedures were performed in 2018?

Source: AXA IM for illustrative purposes only.

• 1,000• 10,000• 100,000• 1,000,000• 10,000,000


AUTOMATION

*Forecast. Source: AXA IM chart: IFR World Robotics 2018. Past performance is not an indicator of future returns or trends.

120 111 114 11360

121166 159 178

221254

294

381421

484

553

630

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 2020* 2021*

Worldwide annual supply of industrial robots(units in thousands)

2005-2013:+5% per year

on average

2014-2021:

+16% per year on average


CLEAN TECH

Source: AXA IM, Bank of America Merrill Lynch, The Clean Revolution, December 2017.

Beijing

Cigarettes per day equivalent

0 5 10 15 20 25Hazardous

VeryUnhealthyUnhealthy

Unhealthy for sensitive groupsModerateGood

Governments

Social awareness

Corporate behaviour

Realising the urgency - Air pollution in Asia


Global Thematic: bringing it all together

Source: AXA IM as at 30/09/2019. AXA WF Framlington Evolving Trends fund is the representative account of the Global Thematic strategy for illustration purposes. No assurance can be given that the strategy will be successful or that investors will not lose some or all of their capital. AXA IM reserves the right to modify any of the investment process described herein at its discretion. CR10177/08-19

8%1%

6%

2%

10%

9%

10%14%

7%

2%

7%

7%

6%0%

4%6%

AGEING & LIFESTYLE17%

CONNECTED CONSUMER

43%

AUTOMATION16%

CLEANTECH13%

TRANSITIONING SOCIETIES

10%

Aged Care (8%)

Silver Spending (1%)

Treatment (6%)

Wellness (2%)

Discovery (10%)

Decision (9%)

Delivery (10%)

Data & Enablers (14%)

Industrial Automation (7%)

Transport (2%)

Technology & Enablers (7%)

Recycling & Waste Reduction (0%)

Responsible Nutrition (7%)

Smart Energy (6%)

Spending (0%)

The Family (4%)

Progress (6%)


Global Thematic: ESG & Controversy

Source: Barra/FactSet/AXA IM as at 30/09/2019. CR11235/05-19

6.0 5.95.0 5.2

5.8 5.95.1 5.1

Regionally Adjusted ESG Score Environment Social Governance

5%

16%

52%

16%11%

0%8% 11%

34% 35%

10%2%

Level 0 Level 1 Level 2 Level 3 Level 4 Level 5

Controversy ExposureNo Level 5 controversy

Environment, Social & Governance (ESG) ScoreExclusion of ESG Score <2


Source: AXA IM. For illustrative purposes only.

Thematic & Impact map

IMPACT THEMATICSocial

impact

Economic impact/Transitioning societies

Environmental impact/ Clean tech

Ageing & Lifestyle

Connected consumer

Automation


Questions?


Important Information

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

This promotional 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.

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: 7 Newgate Street, London EC1A 7NX.

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

© AXA Investment Managers 2019

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