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Axa Magnet - Presentasi AXA Magnet [ Maestro Global Network ] Terbaru
Creating the perfect blend with AXA IM’s Global Factors ...
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This document is intended for the use of professional or institutional investors only and should not be relied upon by retail investors. Circulation must be restricted accordingly. Any reproduction of this information, in whole or in part, is prohibited. Creating the perfect blend with AXA IM’s Global Factors - Sustainable Equity Strategy SCROLL TO TOP Important information The firm seeks to achieve its clients’ investment objectives primarily through reliance on the modelling of proprietary and 3rd party financial and non-financial data, information, and considerations, the sources, weights, and implementation of which may be subject to change and/or the discretion of the firm regardless of whether described herein or elsewhere. Although many of its investment approaches are driven by bottom-up stock selection akin to that of a traditional fundamental investor, the firm seeks to achieve its clients’ investment objectives primarily in reliance on analytical models. The goal of the firm’s systematic approach is not to replicate a perfect “model” portfolio; instead, like other long-term, fundamentally oriented investors, it seeks to create portfolios possessing ex ante those fundamental and statistically important characteristics reflecting our investment beliefs. The firm’s ability to implement its investment objectives depends on various considerations such as the models’ economic, analytical and mathematical underpinnings, the accurate encapsulation of those principles in a complex computational (including soſtware code) environment, the quality of the models’ data inputs, changes in market conditions, and the successful expression of the models' views into the investment portfolio construction process. Many of these have subjective elements that present the possibility of human error. While the investment process principally relies on models, the firm’s process also incorporates the investment judgment of its portfolio managers who may exercise discretion in attempting to capture the intent of the models, particularly in changing market conditions. The firm’s success in implementing its investment objectives may depend on the ability of portfolio managers and others to interpret and implement the signals generated by the models. The firm has established certain systematic rules and processes for monitoring client portfolios to ensure that they are managed in accordance with their investment objectives, but there is no guarantee that these rules or processes will effectively manage the risks associated with its investment process under all market conditions. While the firm employs controls designed to assure that our models are sound in their development and appropriately adapted, calibrated and configured, analytical error, soſtware development errors, and implementation errors are an inherent risk of complex analytical models and quantitative investment management processes. These errors may be extremely hard to detect, and some may go undetected for long periods of time or indefinitely. The firm’s controls, including our escalation policies, are designed to ensure that certain types of errors are subject to review once discovered. However, the effect of errors on our investment process and, where relevant, performance (which can be either positive or negative) may not be fully apparent even when discovered. When the firm discovers an investment process error in one of its models, it may in good faith and in accordance with its obligations, decide not to correct the error, to delay correction of an error, or develop other methodology to address the error, if not inconsistent with the client’s interests. Also, the firm generally will not disclose to affected clients investment process errors that are not the result of a contractual or regulatory breach, or that are non-compensable, unless it otherwise determines that information regarding the error is material to its clients. In Singapore, this document has been issued by AXA Investment Managers Asia (Singapore) Ltd. (Registration No. 199001714W). In other countries, this document has been issued by AXA Investment Managers Asia Limited. References to “AXA IM Asia” below shall be references to AXA Investment Managers Asia (Singapore) Ltd. or AXA Investment Managers Asia Limited as appropriate. This document and the information contained herein are intended for the use of professional or institutional investors and/or accredited investors only and should not be relied upon by retail investors. They have been prepared and issued for private informational and educational purposes only at the sole request of the specified recipients, and not intended for general circulation. They are strictly confidential, and must not be reproduced, circulated, distributed, redistributed or otherwise used, in whole or in part, in any way without the prior written consent of AXA IM Asia. They are not intended for distribution to any persons or in any jurisdictions for which it is prohibited. To the maximum extent permitted by law, AXA IM Asia makes no warranty as to the accuracy or suitability of any information contained herein and accepts no responsibility whatsoever for errors or misstatements, whether negligent or otherwise. Such information may be subject to change without notice. The data contained herein, including but not limited to any backtesting, simulated performance history, scenario analysis and investment guidelines, are based on a number of key assumptions and inputs, and are presented for indicative and/or illustrative purposes only. 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. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent. If any fund is highlighted in this communication (the “Fund”), its offering document or prospectus contains important information on selling restrictions and risk factors, you should read them carefully before entering into any transaction. It is your responsibility to be aware of and to observe all applicable laws and regulations of any relevant jurisdiction. AXA IM Asia does not intend to offer any Fund in any country where such offering is prohibited. For Hong Kong investors: The authorisation of any fund by the Securities and Futures Commission in Hong Kong (“SFC”) does not imply official approval or recommendation. SFC authorization of a fund is not a recommendation or endorsement of a fund nor does it guarantee the commercial merits of a fund or its performance. It does not mean the fund is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors. Where any of the Funds is not authorized by the SFC, the information contained herein in connection with such unauthorized Fund is solely for the use of professional investors in Hong Kong. Materials exempted from authorization by the SFC have not been reviewed by the SFC. For Singapore investors: In Singapore, this document is issued by AXA Investment Managers Asia (Singapore) Ltd. (Registration No. 199001714W) and is intended for the use of Institutional Investors and/or Accredited Investors only as defined in Section 4A of the Securities and Futures Act (Cap. 289) and must not be relied upon by retail investors. Circulation must be restricted accordingly. As an exempt financial adviser under the Financial Advisers Act (“FAA”), AXA IM Asia is exempted from complying with certain business conduct rules (including but not limited to Sections 25, 27 and 36 of the FAA) when providing financial advisory services to Accredited Investors or Expert Investors, each as defined in the Financial Advisers Regulations. For Taiwan investors: The offer, distribution, sale or re-sale of fund units/shares in Taiwan requires approval from and/or registration with Taiwanese regulatory authorities. To the extent that any units/shares of the Funds are not so licensed or registered, such units/shares are made available in Taiwan on a private placement basis only to banks, bills houses, trust enterprises, financial holding companies and other qualified entities or institutions (collectively, “Qualified Institutions”) and other entities and individuals meeting specific criteria (“Other Qualified Investors”) pursuant to the private placement provisions of the Rules Governing Offshore Funds. No other offer or sale of such units/shares in Taiwan is permitted. Taiwanese purchasers of such units/shares may not sell or otherwise dispose of their holdings except by redemption, transfer to a Qualified Institution or Other Qualified Investor, transfer by operation of law or other means approved by the Taiwan Financial Supervisory Commission. For Thailand investors: Nothing in this document shall constitute in any manner whatsoever a proposal to make available, offer for subscription or purchase or to issue an invitation to purchase or subscribe for any securities in Thailand or a proposal to implement any of the foregoing in Thailand nor has this document been approved by or registered with the Securities and Exchange Commission of Thailand (“SEC”). No person receiving a copy of this document may treat the same as constituting an invitation or offer to him in Thailand and such person shall not distribute or make available this document in Thailand. The issuer of this document shall not be liable in any manner whatsoever in the event this document is distributed or made available to any person in Thailand receiving a copy of this document. Since no application for approval has been or will be made to the SEC for the offering of the securities, or for the registration of this document, the securities shall not be offered for subscription or purchased or made available, whether directly or indirectly, in Thailand. It is the sole responsibility of recipients wishing to take any action upon this document to satisfy themselves as to the full observance of the laws of Thailand, to comply with all relevant government and regulatory approvals, and to comply with all applicable laws, including but not limited to exchange control laws. For Malaysian investors: As the recognition by the Malaysian Securities Commission pursuant to Section 212 of the Malaysian Capital Markets and Services Act 2007 has not been / will not be obtained nor will this document be lodged or registered with the Malaysian Securities Commission, the shares referred to hereunder (if any) are not being and will not be deemed to be issued, made available, offered for subscription or purchase in Malaysia and neither this document nor any other document or other material in connection therewith should be distributed, caused to be distributed or circulated in Malaysia. © 2020 AXA Investment Managers. All rights reserved. Design & Production : Internal Design Agency | 18-HK-010604 | Photo Credit : GettyImages Whatever you prefer, all coffees contain a small number of key ingredients - beans, water, milk, sugar – which are combined in different ways to match your preference. But a good coffee also requires judgment and skill in sourcing, roasting and grinding the beans, adding the right amount of water, blending with the right type and amount of milk before adding sugar, or not… Keeping this in mind might help when it comes to thinking about factor investing. THE AXA IM BLEND To learn more about the AXA Global Factors - Sustainable Equity strategy, please click here How do you like your coffee in the morning? Cappuccino, flat white, latte or a strong espresso? What is factor investing? Factor investing may sound complex, but in essence, it’s nothing new. For decades, investors have tried to look for common characteristics in companies that are associated with identifiable and persistent return patterns. Faced with a vast number of stocks to choose from, factor investing allows investors to build a diverse portfolio of securities that have the right characteristics to help them meet their investment goals. Researchers have identified hundreds of different factors, but most fall into some well-known groupings: value, momentum, quality and low volatility . QUALITY MOMENTUM VALUE LOW VOLATILITY In the same way a good barista selects the best ingredients to create your perfect drink, factor investing blends the right factors to create an investment that can potentially deliver your desired risk/return outcome, oſten at a lower cost than traditional investing. What factors does the Sustainable Equity strategy focus on? A basic tenet of investing is that fundamentals drive stock prices over the long term. The factors we use, therefore, need to be linked to fundamentals. Our quantitative investment team, Rosenberg Equities, has over 30 years of experience in working with data and technology innovatively to build proprietary factors, based on detailed financial and non-financial data for over 20,000 companies worldwide.* * ESG data is not available for the entire universe. Quality Our primary factor focus is QUALITY . We seek out high-quality companies with a track record of sustaining profitability and delivering stable earnings growth. High-quality companies tend to experience less share price volatility, and may help dampen downside risk in falling markets. As earnings growth is also considered, this helps the strategy to participate in rising markets. As in your coffee- whatever your individual taste, if the beans aren’t high quality, you’ll notice the difference! Quality Low volatility We combine this with another factor: LOW VOLATILITY . People oſten think you need to take a risk to improve the chance of better returns. That may not have to be the case. Stocks with low levels of historic share price volatility have over time delivered better returns than stocks with higher volatility.* Having exposure to low volatility companies may lower the overall risk profile of a portfolio, and provide mitigation during market falls. * AXA IM Rosenberg Equities, December 2018. Volatility is based on a proprietary Rosenberg measure that combines beta and stock specific risk. Quality is based on a proprietary Rosenberg Equities measure of earnings quality. Low = bottom 30%, Middle = next 40%, High = top 30% according to a square-root-of-market cap (SRMC) weighting scheme within each region on a monthly basis. Universe is MSCI World. Returns do not include transaction costs and are gross of fees. Quality Low volatility ESG We further improve the fundamentals of the strategy by incorporating ESG information for every stock we cover. We believe that ESG information is vital to understanding a company’s future prospects, and is therefore important to be considered alongside its quality and volatility characteristics. We ensure that the strategy meets the AXA IM ESG Standards, and aims to deliver a better-than-benchmark ESG score and improved carbon/water intensity. As active stewards of your assets, AXA Investment Managers (AXA IM) also actively engages with the companies we invest in.* * No representation is made as to the outcome of engagement activities. Click here to read more about our ESG Standards The big change: How ESG is becoming vital to companies’ future prospects Water intensity The scientific consensus is that climate change is real-and society’s attitude is changing in line with the growing threat. Changes in regulation and consumer attitudes cannot be ignored – nor can long term trends such as scarcity of resources, shiſting weather patterns and global demographic trends. Because of this, we believe companies can no longer be viewed just through the lens of financial data. We therefore use ESG data alongside financial data to better understand how companies are positioned to navigate these changes. We believe thoughtful use of this data helps us capture better fundamentals, for example, our research shows that more diverse boards are better able to acquire future profitability, so we include diversity when we assess the quality of a company; by integrating ESG we aim to reduce risk and improve investment outcomes. To us, it’s the right way to invest. Strategy Universe 9,069 17,967 The water saved is equivalent to 7 Olympic swimming pools. Source: AXA IM, MSCI, Trucost.In tonnes per $million of revenue. Strategy refers to the representative account. The investment universe is the MSCI World Index. Data as of 30 June 2020 ESG Score Strategy 6.6 5.9 Source: AXA IM, MSCI, Trucost. Strategy refers to the representative account. The investment universe is the MSCI World Index. Data as of 30 June 2020 Universe Carbon Footprint Strategy Universe 140 215 The carbon saved is equivalent to 245.000 miles driven by the average passenger vehicle. Source: AXA IM, MSCI, Trucost.ESG score based on AXA IM scoring methodology. Strategy refers to the representative account. The investment universe is the MSCI World Index. Data as of 30 June 2020 While we use technology to process enormous amounts of data, it’s our people that make the difference. Whether its actively researching new data, developing more advanced models or engaging with companies, our team of investment experts are focussed on building the bridge between today and our client’s tomorrow. ASSOCIATED RISKS WITH THE STRATEGY The capital is not guaranteed. The strategy 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. Counterparty Risk: Risk of bankruptcy, insolvency, or payment or delivery failure of any of the strategy's counterparties, leading to a payment or delivery default. Risk linked to Method and Model: attention is drawn to the fact that the strategy is based on the utilisation of a proprietary share selection model. The effectiveness of the model is not guaranteed and the utilisation of the model may not result in the investment objective being met. Operational Risk: Risk that operational processes, including those related to the safekeeping of assets may fail, resulting in losses. ESG Score is the internal scoring methodology developed within Responsible Investment Team of AXA IM. ESG Score is a proprietary AXA Investment Managers metric that reflects a company/country’s performance across a range of environmental (E), social (S), and governance (G) criteria, ultimately providing each company/country with a score scaling from 0-10 (worst to best). An ESG score may not be available for all of the stocks in the universe.
Transcript of Creating the perfect blend with AXA IM’s Global Factors ...
This document is intended for the use of professional or institutional investors only and should not be relied upon by retail investors. Circulation must be restricted
accordingly. Any reproduction of this information, in whole or in part, is prohibited.
Creating the perfect blend with AXA IM’s Global Factors - Sustainable Equity Strategy
SCROLL TO TOP
Important informationThe firm seeks to achieve its clients’ investment objectives primarily through reliance on the modelling of proprietary and 3rd party financial and non-financial data, information, and considerations, the sources, weights, and implementation of which may be subject to change and/or the discretion of the firm regardless of whether described herein or elsewhere. Although many of its investment approaches are driven by bottom-up stock selection akin to that of a traditional fundamental investor, the firm seeks to achieve its clients’ investment objectives primarily in reliance on analytical models. The goal of the firm’s systematic approach is not to replicate a perfect “model” portfolio; instead, like other long-term, fundamentally oriented investors, it seeks to create portfolios possessing ex ante those fundamental and statistically important characteristics reflecting our investment beliefs. The firm’s ability to implement its investment objectives depends on various considerations such as the models’ economic, analytical and mathematical underpinnings, the accurate encapsulation of those principles in a complex computational (including software code) environment, the quality of the models’ data inputs, changes in market conditions, and the successful expression of the models' views into the investment portfolio construction process. Many of these have subjective elements that present the possibility of human error. While the investment process principally relies on models, the firm’s process also incorporates the investment judgment of its portfolio managers who may exercise discretion in attempting to capture the intent of the models, particularly in changing market conditions. The firm’s success in implementing its investment objectives may depend on the ability of portfolio managers and others to interpret and implement the signals generated by the models. The firm has established certain systematic rules and processes for monitoring client portfolios to ensure that they are managed in accordance with their investment objectives, but there is no guarantee that these rules or processes will effectively manage the risks associated with its investment process under all market conditions. While the firm employs controls designed to assure that our models are sound in their development and appropriately adapted, calibrated and configured, analytical error, software development errors, and implementation errors are an inherent risk of complex analytical models and quantitative investment management processes. These errors may be extremely hard to detect, and some may go undetected for long periods of time or indefinitely. The firm’s controls, including our escalation policies, are designed to ensure that certain types of errors are subject to review once discovered. However, the effect of errors on our investment process and, where relevant, performance (which can be either positive or negative) may not be fully apparent even when discovered. When the firm discovers an investment process error in one of its models, it may in good faith and in accordance with its obligations, decide not to correct the error, to delay correction of an error, or develop other methodology to address the error, if not inconsistent with the client’s interests. Also, the firm generally will not disclose to affected clients investment process errors that are not the result of a contractual or regulatory breach, or that are non-compensable, unless it otherwise determines that information regarding the error is material to its clients.
In Singapore, this document has been issued by AXA Investment Managers Asia (Singapore) Ltd. (Registration No. 199001714W). In other countries, this document has been issued by AXA Investment Managers Asia Limited. References to “AXA IM Asia” below shall be references to AXA Investment Managers Asia (Singapore) Ltd. or AXA Investment Managers Asia Limited as appropriate.
This document and the information contained herein are intended for the use of professional or institutional investors and/or accredited investors only and should not be relied upon by retail investors. They have been prepared and issued for private informational and educational purposes only at the sole request of the specified recipients, and not intended for general circulation. They are strictly confidential, and must not be reproduced, circulated, distributed, redistributed or otherwise used, in whole or in part, in any way without the prior written consent of AXA IM Asia. They are not intended for distribution to any persons or in any jurisdictions for which it is prohibited.
To the maximum extent permitted by law, AXA IM Asia makes no warranty as to the accuracy or suitability of any information contained herein and accepts no responsibility whatsoever for errors or misstatements, whether negligent or otherwise. Such information may be subject to change without notice. The data contained herein, including but not limited to any backtesting, simulated performance history, scenario analysis and investment guidelines, are based on a number of key assumptions and inputs, and are presented for indicative and/or illustrative purposes only.
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.
Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.
If any fund is highlighted in this communication (the “Fund”), its offering document or prospectus contains important information on selling restrictions and risk factors, you should read them carefully before entering into any transaction. It is your responsibility to be aware of and to observe all applicable laws and regulations of any relevant jurisdiction. AXA IM Asia does not intend to offer any Fund in any country where such offering is prohibited.
For Hong Kong investors: The authorisation of any fund by the Securities and Futures Commission in Hong Kong (“SFC”) does not imply official approval or recommendation. SFC authorization of a fund is not a recommendation or endorsement of a fund nor does it guarantee the commercial merits of a fund or its performance. It does not mean the fund is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors. Where any of the Funds is not authorized by the SFC, the information contained herein in connection with such unauthorized Fund is solely for the use of professional investors in Hong Kong. Materials exempted from authorization by the SFC have not been reviewed by the SFC.
For Singapore investors: In Singapore, this document is issued by AXA Investment Managers Asia (Singapore) Ltd. (Registration No. 199001714W) and is intended for the use of Institutional Investors and/or Accredited Investors only as defined in Section 4A of the Securities and Futures Act (Cap. 289) and must not be relied upon by retail investors. Circulation must be restricted accordingly. As an exempt financial adviser under the Financial Advisers Act (“FAA”), AXA IM Asia is exempted from complying with certain business conduct rules (including but not limited to Sections 25, 27 and 36 of the FAA) when providing financial advisory services to Accredited Investors or Expert Investors, each as defined in the Financial Advisers Regulations.
For Taiwan investors: The offer, distribution, sale or re-sale of fund units/shares in Taiwan requires approval from and/or registration with Taiwanese regulatory authorities. To the extent that any units/shares of the Funds are not so licensed or registered, such units/shares are made available in Taiwan on a private placement basis only to banks, bills houses, trust enterprises, financial holding companies and other qualified entities or institutions (collectively, “Qualified Institutions”) and other entities and individuals meeting specific criteria (“Other Qualified Investors”) pursuant to the private placement provisions of the Rules Governing Offshore Funds. No other offer or sale of such units/shares in Taiwan is permitted. Taiwanese purchasers of such units/shares may not sell or otherwise dispose of their holdings except by redemption, transfer to a Qualified Institution or Other Qualified Investor, transfer by operation of law or other means approved by the Taiwan Financial Supervisory Commission.
For Thailand investors: Nothing in this document shall constitute in any manner whatsoever a proposal to make available, offer for subscription or purchase or to issue an invitation to purchase or subscribe for any securities in Thailand or a proposal to implement any of the foregoing in Thailand nor has this document been approved by or registered with the Securities and Exchange Commission of Thailand (“SEC”). No person receiving a copy of this document may treat the same as constituting an invitation or offer to him in Thailand and such person shall not distribute or make available this document in Thailand. The issuer of this document shall not be liable in any manner whatsoever in the event this document is distributed or made available to any person in Thailand receiving a copy of this document. Since no application for approval has been or will be made to the SEC for the offering of the securities, or for the registration of this document, the securities shall not be offered for subscription or purchased or made available, whether directly or indirectly, in Thailand. It is the sole responsibility of recipients wishing to take any action upon this document to satisfy themselves as to the full observance of the laws of Thailand, to comply with all relevant government and regulatory approvals, and to comply with all applicable laws, including but not limited to exchange control laws.
For Malaysian investors: As the recognition by the Malaysian Securities Commission pursuant to Section 212 of the Malaysian Capital Markets and Services Act 2007 has not been / will not be obtained nor will this document be lodged or registered with the Malaysian Securities Commission, the shares referred to hereunder (if any) are not being and will not be deemed to be issued, made available, offered for subscription or purchase in Malaysia and neither this document nor any other document or other material in connection therewith should be distributed, caused to be distributed or circulated in Malaysia.
© 2020 AXA Investment Managers. All rights reserved.
Design & Production : Internal Design Agency | 18-HK-010604 | Photo Credit : GettyImages
Whatever you prefer, all coffees contain a small number of key ingredients - beans, water, milk, sugar – which are combined in different ways to match your preference. But a good coffee also requires judgment and skill in sourcing, roasting and grinding the beans, adding the right amount of water, blending with the right type and amount of milk before adding sugar, or not… Keeping this in mind might help when it comes to thinking about factor investing.
THE AXA IM BLENDTo learn more about the AXA Global Factors - Sustainable Equity strategy, please click here
How do you like your coffee in the morning? Cappuccino, flat white, latte or a strong espresso?
What is factor investing?
Factor investing may sound complex, but in essence, it’s nothing new. For decades, investors have tried to look for common characteristics in companies that are associated with identifiable and persistent return patterns.Faced with a vast number of stocks to choose from, factor investing allows investors to build a diverse portfolio of securities that have the right characteristics to help them meet their investment goals.
Researchers have identified hundreds of different factors, but most fall into some well-known groupings: value, momentum, quality and low volatility.
QUALITY MOMENTUM
VALUE
LOW VOLATILITY
In the same way a good barista selects the best ingredients to create your perfect drink, factor investing blends the right factors to create an investment that can potentially deliver your desired risk/return outcome, often at a lower cost than traditional investing.
What factors does the Sustainable Equity strategy focus on?
A basic tenet of investing is that fundamentals drive stock prices over the long term. The factors we use, therefore, need to be linked to fundamentals. Our quantitative investment team, Rosenberg Equities, has over 30 years of experience in working with data and technology innovatively to build proprietary factors, based on detailed financial and non-financial data for over 20,000 companies worldwide.*
* ESG data is not available for the entire universe.
Quality
Our primary factor focus is QUALITY. We seek out high-quality companies with a track record of sustaining profitability and delivering stable earnings growth.
High-quality companies tend to experience less share price volatility, and may help dampen downside risk in falling markets. As earnings growth is also considered, this helps the strategy to participate in rising markets. As in your coffee- whatever your individual taste, if the beans aren’t high quality, you’ll notice the difference!
Quality
Low volatility
We combine this with another factor: LOW VOLATILITY.
People often think you need to take a risk to improve the chance of better returns. That may not have to be the case. Stocks with low levels of historic share price volatility have over time delivered better returns than stocks with higher volatility.* Having exposure to low volatility companies may lower the overall risk profile of a portfolio, and provide mitigation during market falls.
* AXA IM Rosenberg Equities, December 2018. Volatility is based on a proprietary Rosenbergmeasure that combines beta and stock specific risk. Quality is based on a proprietaryRosenberg Equities measure of earnings quality. Low = bottom 30%, Middle = next 40%, High =top 30% according to a square-root-of-market cap (SRMC) weighting scheme within each regionon a monthly basis. Universe is MSCI World. Returns do not include transaction costs and aregross of fees.
Quality
Low volatility
ESG
We further improve the fundamentals of the strategy by incorporating ESG information for every stock we cover. We believe that ESG information is vital to understanding a company’s future prospects, and is therefore important to be considered alongside its quality and volatility characteristics. We ensure that the strategy meets the AXA IM ESG Standards, and aims to deliver a better-than-benchmark ESG score and improved carbon/water intensity. As active stewards of your assets, AXA Investment Managers (AXA IM) also actively engages with the companies we invest in.** No representation is made as to the outcome of engagement activities.
Click here to read more about our ESG Standards
The big change: How ESG is becoming vital to companies’ future prospects
Water intensity
The scientific consensus is that climate change is real-and society’s attitude is changing in line with the growing threat. Changes in regulation and consumer attitudes cannot be ignored – nor can long term trends such as scarcity of resources, shifting weather patterns and global demographic trends. Because of this, we believe companies can no longer be viewed just through the lens of financial data. We therefore use ESG data alongside financial data to better understand how companies are positioned to navigate these changes.We believe thoughtful use of this data helps us capture better fundamentals, for example, our research shows that more diverse boards are better able to acquire future profitability, so we include diversity when we assess the quality of a company; by integrating ESG we aim to reduce risk and improve investment outcomes. To us, it’s the right way to invest.
Strategy Universe
9,069 17,967The water saved is equivalent to
7 Olympic swimming pools.Source: AXA IM, MSCI, Trucost.In tonnes per $million of revenue. Strategy refers to the representative account. The investment universe is the MSCI World Index. Data as of 30 June 2020
ESG ScoreStrategy
6.6 5.9Source: AXA IM, MSCI, Trucost. Strategy refers to the representative account. The investment universe is the MSCI World Index. Data as of 30 June 2020
Universe
Carbon FootprintStrategy Universe
140 215The carbon saved is equivalent to 245.000 miles
driven by the average passenger vehicle.Source: AXA IM, MSCI, Trucost.ESG score based on AXA IM scoring methodology. Strategy refers to the representative account. The investment universe is the MSCI World Index. Data as of 30 June 2020
While we use technology to process enormous amounts of data, it’s our people that make the difference. Whether its actively researching new data, developing more advanced models or engaging with companies, our team of investment experts are focussed on building the bridge between today and our client’s tomorrow.
ASSOCIATED RISKS WITH THE STRATEGY The capital is not guaranteed. The strategy 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. Counterparty Risk: Risk of bankruptcy, insolvency, or payment or delivery failure of any of the strategy's counterparties, leading to a payment or delivery default. Risk linked to Method and Model: attention is drawn to the fact that the strategy is based on the utilisation of a proprietary share selection model. The effectiveness of the model is not guaranteed and the utilisation of the model may not result in the investment objective being met. Operational Risk: Risk that operational processes, including those related to the safekeeping of assets may fail, resulting in losses.
ESG Score is the internal scoring methodology developed within Responsible Investment Team of AXA IM. ESG Score is a proprietary AXA Investment Managers metric that reflects a company/country’s performance across a range of environmental (E), social (S), and governance (G) criteria, ultimately providing each company/country with a score scaling from 0-10 (worst to best). An ESG score may not be available for all of the stocks in the universe.
