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INVESTING IN THE FUTUREInnovations in thematic investing

Matthew Lovatt – Global Head of AXA IM Framlington Equities

18 June 2019

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


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 Transport

Offshoring

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


Historic performance of Evolving Economy vs Old Economy universe

Source: AXA IM, FactSet as at 31/12/2018. 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 strategy is not yet live and to the extent it becomes available for investment, an investor’s actual experience may vary. 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 52% of the S&P Global Broad Market Index market capitalisation as of 31/12/2017. The weighted average of the universes will equal the S&P Global Broad Market Index. CR09360/05-19

-5

0

5

10

15

20

25

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

%

Evolving Economy vs Old EconomyRelative performance - 5 years to December 2018

Evolving Economy 8.08

Old Economy 4.98

Return - 5YR Ann

20+ %


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 31/12/2018. CR09360/05-19

0

2

4

6

8

10

12

14

16

18

CommunicationServices

ConsumerDiscretionary

ConsumerStaples

Energy Financials Health Care Industrials InformationTechnology

Materials RealEstate

Utilities

Old Economy

Transitioning Societies

CleanTech

Automation

Connected Consumer

Ageing & Lifestyle


Thematics: A growth investment philosophy

Source: AXA IM. For illustrative purposes only. Past and projected performance is not a reliable indicator of future results.

Investable growth themes

Thematic “Purity”

Company knowledge

1 2 3• +10% yoy revenue growth

potential

• Expanding investment universe with sufficient diversification

• High level of purity related to the themes

• >70% of the portfolio in high & medium exposure stocks

• Strong track record of adding value in Technology Investing

• Bias of small & mid cap opportunities


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

4.9bnEM World’s Middle Class is growingP

op

ula

tio

n in

mill

ion


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

Consumptiongrowth

…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 country

in the world

60+ yrs old population (bn)


CONNECTED CONSUMER

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.

Online continues to take market share

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

17% (2018)

21% (2023,E)

24% (2018)

34% (2023,E)

5% (2018)9% (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)


AUTOMATION

*Forecast. Source: AXA IM- chart: IFR World Robotics 2018. Performance results of the past are no indicator for any 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 thousand)

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


9%

3%

6%

3%

10%

8%

7%10%

9%

2%

6%

1%4%

6%

3%4% 3%

AGEING & LIFESTYLE

25%

CONNECTED CONSUMER

35%

AUTOMATION18%

CLEANTECH11%

TRANSITIONING SOCIETIES

10%

Aged Care (9%)

Silver Spending (3%)

Treatment (6%)

Wellness (3%)

Discovery (10%)

Decision (8%)

Delivery (7%)

Data & Enablers (10%)

Industrial Automation (9%)

Transport (2%)

Technology & Enablers (6%)

Recycling & Waste Reduction (1%)

Responsible Nutrition (4%)

Smart Energy (6%)

Basic needs (3%)

Changing consumption (4%)

Urbanisation and infrastructure (3%)

Global Thematic: bringing it all together

Source: AXA IM as at 31/05/2019. 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


Global Thematic: ESG & Controversy

Source: Barra/FactSet/AXA IM as at 30/04/2019. CR11235/05-19

6.0 6.05.0 5.1

5.8 5.95.1 5.1

Regionally Adjusted ESGScore

Environment Social Governance

7%14%

48%

19%12%

0%8% 11%

33% 35%

10%2%

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

Controversy ExposureNo Level 5 controversy

ESG ScoreExclusion of ESG Score <2


Source: AXA IM for illustrative purposes only as of May 2019.

Thematic & Impact map

IMPACT THEMATICSOCIAL IMPACT

ECONOMIC IMPACT /TRANSITIONING SOCIETIES

ENVIRONMENTAL IMPACT /CLEAN TECH

AGEING & LIFETYLE

CONNECTED CONSUMER

AUTOMATION


Questions?


APPENDIX


AXA IM Framlington Equities

1AXA IM as at 31/12/2018 unless otherwise stated. For illustrative purposes only. Past performance is not a guide to future performance. No assurance can be given that the strategy will be successful or achieve its objectives. Information may be provided for reference only and does not represent the experience of the strategy/fund nor is it intended as a representation or warranty by AXA IM or any other persons or entity as to the actual composition of or performance of any future investment.

GROWTH AT REASONABLE PRICE

ACTIVE MANAGEMENT

STOCK SELECTION

COMPANY MEETING

FUNDAMENTAL RESEARCH

HIGH ACTIVE SHARE

LONG-TERM CONVICTION

JUDGEMENTAL APPROACH

LOW TURNOVER

£44billion of assets

3global financial centres

50Investment Professionals

19Portfolio managers average

years’ experience

Key Figures


Existing expertise in global and disruptive themes

Source AXA IM and FactSet as at 31/03/2019. 1: Performance of the Global Equity. Basis: Gross of Fees in USD. Comparative benchmark: MSCI AC World Net TR. 2: Performance of the Global Robotech. Basis: Gross of Fees in USD. Comparative benchmark: MSCI AC World Net TR. 3:Performance of the AXA Framlington Global Technology. Basis: Gross of Fees in USD. Comparative benchmark: MSCI World Information Technology Net TR. 4: Performance of the Digital Economy Equity. Source FactSet, Basis: Gross of Fees in USD. Comparative benchmark: MSCI AC World Net TR.. The deduction of fees reduces the level of return. Past performance is not a guide to future performance. AXA IM claims compliance with the *Global Investment Performance Standards (GIPS). Please refer to the full GIPS Compliant Report attached at the end of this presentation for overall information.

+33%

+6%

+124%+108%

80

100

120

140

160

180

200

220

240

260

Aug-10 May-11 Feb-12 Nov-12 Aug-13 May-14 Feb-15 Nov-15 Aug-16 May-17 Feb-18 Nov-18

AXA Framlington Global Core Equity Composite, USD

MSCI AC World Total Return Net

80

90

100

110

120

130

140

150

160

170

180

Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18

AXA Framlington Global Robotech Composite

MSCI AC World Net TR

+62%

+36%

Global Equity strategy1

Cumulative performance since inception on August 2010 Global Robotech strategy2

Cumulative performance since inception (08/12/2015)

Digital Economy strategy4

Cumulative performance since inception (24/10/2017)

+321%

+213%

50

100

150

200

250

300

350

400

450

Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18

Global Technology strategy (Gross, USD)

MSCI World Information Technology Net TR

Global Technology strategy3

Cumulative performance since Jeremy Gleeson took over the strategy on June 07

85

90

95

100

105

110

115

120

125

130

135

Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19

AXA Framlington Digital Economy strategy (Gross, USD)

MSCI AC World Net TR


Our RI and Impact offering

Source : AXA IM as of 30/09/18. Non audited figures. 1AXA IM Joint Ventures have a specific approach with regards to ESG scoring and stewardship

• AXA IM’s exclusion policies• ESG scoring• Stewardship (voting and engagement)

• AXA IM ESG standard guidelinesAnd/Or

• ESG integration into investment decisions at the level which best fits client needs and objectives And/Or

• ESG Score/KPI Objectives

• AXA IM ESG standard guidelines• Eligible universe defined according to ESG criteria• Target a positive outcome on environment/social • Measure of key impact indicators• Active engagement with companies

SUSTAINABLE INVESTING ASSETS

ESG INTEGRATION

AXA IM’S ESG EMBEDDED

AV

OID

IDEN

TIFY

INV

EST

IMP

AC

TOUR OFFERING


ESG Embedded

Source: AXA IM, for illustrative purpose only.

ControversiesVoting &

EngagementSpecialist ESG Research

IntegratedBroker

Research

QuantitativeSupport

External Qualitative Research

Framlington:CompanyResearch

RI Team: BlueSky /

Educational / Thematic

Internal Qualitative Research

PORTFOLIO MANAGERS

AXA IM’S ESG EMBEDDED


ESG Integration

Source: AXA IM for illustrative purposes only. * Qualitative review & governance. ** Comply or Explain approach

• Companies with a revenue generated by thermal coal equal to 30%, or

• Companies with > 30% of coal in the energy mix, or

• Rising coal capacities (> 3000 MW), or

• Companies with an annual coal production > 20 Million Tones (MT)

• Companies with more than 20% of their revenue coming from tar sands extraction

• Pipeline developers with more than 20% of their revenues coming from tar sands

• Tobacco producers

• Companies breaching the United Nations Global Compact (ie. controversies)*

CLIMATE RISK POLICY

TOBACCO

DEFENSE

ESG QUALITY • Tight monitoring of AXA IM ESG scores below 2**

• White phosphorus weapons manufacturers

UNGC VIOLATIONS

In addition to AXA IM sectorial policies:

Controversial Weapons

Palm Oil

Soft Commodities

Coal

Exclusion of

ESG INTEGRATION


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 ortax 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

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