The AXA World Funds Framlington Digital Economy fund seeks to invest in global growth companies that contribute to the overall value chain of the digital economy across discovery, decision-making and delivery of goods and services. The fund also invests in companies which act as ‘enablers’ for traditional businesses looking to transition to the digital economy.
What is the digital economy?
Rapid advances in technology have significantly improved consumers’ experiences of shopping online, and digitally-savvy companies now offer a broader selection of goods, faster delivery, secure payments and 24/7 mobile access. E-commerce represents the part of this new digital economy that consumers are most familiar with today, and internet retailing is expected to grow at an average rate of 14% per year globally over the next five years1.
But the digital economy describes much more than individual retailers’ digital stores, and new selling points have proliferated across social media, apps, search engines and web portals, all battling to monetize rising web traffic from potential customers. The digital economy thus describes the vast universe of companies operating across all touchpoints of the consumer’s online journey, from product discovery to delivery. It also includes companies which act as ‘enablers’ for traditional businesses looking to take advantage of the expanding digital opportunity set.
Why invest?
The fund aims to provide investors with long-term growth, by investing in companies which contribute to the overall value chain of the digital economy. This spans customers’ initial discovery of products and services, decision-making, payment and delivery, as well as the companies providing support to traditional businesses looking to develop their digital presence.
Access the long-term potential of the rapidly expanding digital economy.
Supported by mobile commerce growth in developed markets and rising internet usage in emerging markets, internet retailing is expected to grow at an average rate of 14% per year over the next 5 years1. We believe this represents a significant structural opportunity for investors seeking long-term growth2.
Gain exposure to a diversified and growing universe.
Even at the early stages of this long-term trend, the digital economy represents a diverse, multi-cap universe of companies operating across multiple sectors not typically captured in traditional technology indices.
Benefit from an actively managed, unconstrained approach.
With more than 400 meetings with technology executives each year, our detailed coverage of the investment universe helps us identify companies that we believe to display above-average growth prospects in this emerging theme.
2 Please note that expectations of growth are no guarantee of future performance.
Where does the digital economy fund invest?
Discovery of the product
How people search for and discover products and services, i.e. online search, digital marketing, advertising and social media, e.g. Facebook, Tencent (Chinese web service provider).
Decision making
E-commerce companies, web portals and mobile apps which provide consumers with convenient and reliable product choices, e.g. Amazon, Priceline (online travel agency).
Delivery
Companies that help facilitate payments and logistics to keep pace with consumers’ increasing expectations of same-day delivery, e.g. PayPal (digital payments), Kion (warehouse automation).
Data and enablers
Digital companies that act as ‘enablers’ for traditional businesses looking to adapt to the fast evolving digital landscape, e.g. Tableau, Splunk (help companies understand and use data).