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AXA IM evolves its UK Growth strategy into UK Sustainable Equity

  • 02 November 2021

AXA Investment Managers (AXA IM) announces the launch of the AXA Framlington UK Sustainable Equity fund, which provides onshore investors with access to UK companies it believes demonstrate either leadership on sustainability issues through strong environmental, social and governance (ESG) practices (“leaders”), or those who have shown a clear commitment to improve their ESG practices (“companies in transition”).

The UK-domiciled fund is an official reshaping and rebrand of the AXA Framlington UK Growth fund, effective as of 13 September 2021. It forms part of AXA IM’s strategy to further develop its range of sustainable funds available to UK-based investors, signifying a growing demand for these strategies in the market. It is managed by Nigel Yates, who joined in January 2021 when he took over the management of the AXA Framlington UK Growth fund.

The strategy allocates at least 70% of its investment in shares of companies domiciled, incorporated or having significant business in the UK which the manager believes could provide positive returns. 80% of its investments in shares are in large and medium-sized companies, and up to 20% in small cap. 50% or more of the fund will be invested in ESG “leaders” and the manager will actively engage with “companies in transtion” on sustainability issues.

The strategy looks to capture secular growth through three sustainable growth themes - People, Planet and Progress:

  1. People – Ageing demographics and increased social awareness are creating powerful structural growth opportunities in areas such as healthcare, financial planning & leisure activities.
  2. Planet – The importance of limiting temperature rises is accelerating the need to dramatically cut carbon emissions, increase the amount of renewable energy and use the planet’s resources more sustainably.
  3. Progress – The relentless focus on digitisation provides a route towards sustainability, carbon neutrality, equality and improving skills worldwide. Companies also play a critical role in keeping us safe as more people move online.

Commenting on the launch, Nigel Yates, manager of the AXA Framlington UK Sustainable Equity fund, said: “We view ESG integration as part of expressing our conviction as long-term responsible investors, avoiding negative issues that can damage portfolio returns but also influencing management to take the right steps towards enhancing their sustainability profile and practices. We believe the UK market offers access to exciting businesses, many of which are benefiting from sustainable secular growth drivers, strong management teams and the UK’s quality corporate governance regime.”

John Stainsby, Head of Core Client Group UK, added: “The launch of the new strategy demonstrates our ongoing commitment to delivering sustainable, long-term value for clients while driving meaningful change for society and the environment. At AXA IM, we want to provide UK-based investors with access to a variety of sustainable strategies as the demand for responsible investing continues at pace. Following the launch of the UK Sustainable Equity fund, in addition to the Clean Economy fund launched back in August, we are aiming to add more funds to our sustainable fund offering for UK-based clients.



    Liquidity risk:

    Under certain market conditions, it may be difficult to buy or sell investments for a Fund. For example, smaller company shares may trade infrequently and in small volumes and corporate and emerging market bonds may be affected by the demand in the market for such securities carrying credit risk, particularly in times of significant market stress. As a result, it may not be possible to buy or sell such investments at a preferred time, close to the last market price quoted or in the volume desired. The Manager may be forced to buy or sell such investments as a consequence of Unitholders buying or selling Units in the Fund. Depending on market conditions at the time, this could lead to a significant drop in the Fund’s value.

    Equity risk:

    The value of shares in which a Fund invests fluctuate pursuant to market expectations. The value of such shares will go up and down and equity markets have historically been more volatile than fixed interest markets. Should the price of shares in which the Fund has invested fall, the Net Asset Value of the Fund will also fall. Funds investing in shares are generally more volatile than funds investing in bonds or a combination of shares and bonds, but may also achieve greater returns.

    ESG Risk:

    Applying ESG and sustainability criteria to the investment process may exclude securities of certain issuers for non-investment reasons and therefore some market opportunities available to funds that do not use ESG or sustainability criteria may be unavailable for the Fund, and the Fund's performance may at times be better or worse than the performance of relatable funds that do not use ESG or sustainability criteria. Prospectus for the AXA Framlington Range of Authorised Unit Trust Schemes, valid as at 28 July 2021.

    The selection of assets may in part rely on a proprietary ESG scoring process or ban lists that rely partially on third party data. The lack of common or harmonised definitions and labels integrating ESG and sustainability criteria at EU level may result in different approaches by managers when setting ESG objectives and determining that these objectives have been met by the funds they manage. This also means that it may be difficult to compare strategies integrating ESG and sustainability criteria to the extent that the selection and weightings applied to select investments may to a certain extent be subjective or based on metrics that may share the same name but have different underlying meanings. Investors should note that the subjective value that they may or may not assign to certain types of ESG criteria may differ substantially from the fund manager’s methodology. The lack of harmonised definitions may also potentially result in certain investments not benefitting from preferential tax treatments or credits because ESG criteria are assessed differently than initially thought.


    This press release should not be regarded as an offer, solicitation, invitation or recommendation to subscribe for any investment service or product and is provided for information purposes only. No financial decisions should be made on the basis of information provided.

    This promotional communication does not constitute on the part of AXA Investment Managers a solicitation or investment, legal or tax 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.

    Before making an investment, investors should read the relevant Prospectus and the Key Investor Information Document / scheme documents, which provide full product details including investment charges and risks. The information contained herein is not a substitute for those documents or for professional external advice.

    The products or strategies discussed in this document may not be registered nor available in your jurisdiction. Please check the countries of registration with the asset manager, or on the web site https://www.axa-im.com/en/registration-map, where a fund registration map is available.  Please note that the management company reserves the right, at any time, to no longer market the product(s) mentioned in this communication in the European Union country by notification to its authority of supervision in accordance with European passport rules. In particular units of the funds may not be offered, sold or delivered to U.S. Persons within the meaning of Regulation S of the U.S. Securities Act of 1933. The tax treatment relating to the holding, acquisition or disposal of shares or units in the fund depends on each investor’s tax status or treatment and may be subject to change. Any potential investor is strongly encouraged to seek advice from its own tax advisors.

    Past performance is not a guide to current or future performance, and any performance or return data displayed does not take into account commissions and costs incurred when issuing or redeeming units.

    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: 22 Bishopsgate London EC2N 4BQ

    In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.

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