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.
RESTRICTEDProperty of AXA IM. Reproduction prohibited without the prior consent of AXA IM
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…
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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
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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
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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
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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
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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
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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)
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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
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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.
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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
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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
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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
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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%)
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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
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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
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Questions?
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