Three investment themes for 2023
It’s that time of year when everyone reaches for their crystal balls to predict what sectors could...
AXA Framlington Global Technology
An unconstrained fund that invests in technology companies from around the world. Its lack of benchmark constraints means it is free to invest in 'new technology' rather than 'old commodity' companies. Jeremy Gleeson has successfully run this fund since 2007 and has been specialising in technology since 1998.
Our opinion
It is important in any fund to avoid the losers but no more so than in the technology sector. Jeremy's level-headed commitment to finding new opportunities with strong commercial potential, and ignoring yesterday's winners, coupled with his and his team's vast experience, may make the AXA Framlington Global Technology fund an appealing option for investors seeking technology exposure.
Company description
AXA Investment Managers (AXA IM) is the asset management arm of the eponymous French insurance giant. It’s equity franchises are split into two brands: Framlington Equities and Rosenberg Equities. The latter focuses on systemic investment (using quant-based modelling), while the former is run by active fund managers. AXA Framlington Equities was awarded the Elite Provider for Equities rating in 2015, 2016, 2018 and 2021.
Fund manager
The lead portfolio manager is Jeremy Gleeson. He has managed the AXA Framlington Global Technology fund since June 2007. Previously, he was senior portfolio manager on the technology desk at Close Investments. Jeremy is a CFA Charterholder and has 18 years’ experience managing global technology equities. He has a BSc (Hons) in mathematics and a Masters in systems engineering, both from Cardiff University.
Jeremy is ably supported by Tom Riley, who is the lead portfolio manager of their Robotech strategy and the global industrials/automation specialist. Steve Kelly, manager of Elite Rated AXA Framlington American Growth, also supports Jeremy on this fund.
Technology breakthroughs aren't always anticipated, which makes the sector all the more exacting to invest in.
Jeremy GleesonFund manager
Investment process
Individual stock picking ultimately drives portfolio construction, with each holding exposed to one or more key themes that are expected to underpin technology sector growth over the coming years. Jeremy looks for companies with progressive-thinking management, dominant positions, above-market growth and sustainable or improving profitability. He believes the benchmark is populated with the successful technology companies of the past, not necessarily the future. He therefore looks for new technology with proven commercial viability. The fund is typically comprised of 55-75 stocks, with a bias towards small and medium-sized companies. This is a high conviction strategy with a relatively low turnover of companies.
ESG
ESG - Limited
As a firm, AXA has company-wide investment restrictions based on specific ESG risks – an approach that has been very forward thinking. It monitors and excludes multiple industries for all assets under management (e.g: controversial weapons, palm oil and soft commodities). It has also recently enforced and strengthened its stance on coal-based power production with limits and exclusions on revenue, power generation, expansion and mining development. Beyond this, the fund has no further restrictions. Governance is, however, an important consideration, and Steve always engages with management teams of his portfolio holdings.
Risk
Technology is inherently risky but by avoiding the blue-sky companies (good ideas but zero income and burgeoning development costs) and waiting for companies to fully develop their products, the fund is more likely to avoid the pitfalls that affected technology funds in the early 2000s.
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