AXA Framlington Japan invests in Japanese companies of varying sizes but tends to have a slight bias towards smaller companies. The manager looks for firms with long-term growth prospects which are independent of short-term news flow or what is going on in the wider economy.
Our opinion
This fund has a clear and logical strategy and is well diversified. Whilst AXA Framlington Japan favours growth, its valuation discipline means it is less extreme in terms of style than some of its peers.
Company description
AXA Investment Managers (AXA IM) is the asset management arm of the eponymous French insurance giant. AXA IM’s equity investment team manages a range of qualitative and quantitative solutions. AXA IM’s qualitative equity strategies – which are actively managed - aim to generate high and consistent returns over the long term, investing in companies with high revenue growth and sustainable profit margins. The quantitative investment approach, driven by the ‘Equity QI’ team, combines vast sets of data and technology to seek investment opportunities on a global scale. AXA IM Equity was awarded the Elite Provider for Equities rating in 2015, 2016, 2018 and 2021.
Fund manager
Born and educated in Japan, Chisako is one of the most experienced Japanese managers in the industry, with more than 25 years’ experience. She joined AXA in 2006 having previously worked for Scottish Widows, Martin Currie, Scottish Provident and Scottish Life. Chisako has been lead manager on AXA Framlington Japan since 2010 and is based in Edinburgh.
After two lost decades, Corporate Japan has completely re-invented itself. I enjoy finding, contacting and connecting with these new 21st century businesses.
Chisako HardieFund manager
Investment process
AXA Framlington Japan invests in long-term structural growth companies. The team identifies thematic trends which generate ideas and inform their stock picking. Recent themes include; the globalisation of Japanese food, ageing populations, automation and the increased use of electronics in cars. Investments are often held for many years, but will be sold when they become fully valued. The team’s valuation discipline pushes them towards smaller companies where they can often find higher structural growth at a better price.
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 Chisako always engages with management teams of her portfolio holdings.
Risk
Japan has historically always been a volatile market. AXA Framlington Japan fund invests in a number of smaller companies which increases the level of risk, although this is mitigated by strong diversification. The portfolio usually contains around 100 holdings which limits the impact of any one stock on the portfolio. The top 10 holdings usually account for around 15% of the portfolio.
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