Axa IM renames impact fund as rivals multiply

Axa Investment Managers has renamed its gender diversity equities strategy as it seeks to compete with international rivals.

Axa Investment Managers has renamed its gender diversity equities strategy as it seeks to compete with international rivals.

Axa WF Framlington Mix in Perspectives will now become the Women Empowerment fund, Portfolio Adviser can reveal. The $19m fund launched in February 2017. Julie Lamirel was initially lead manager on the portfolio, but when she left in July 2017 to become senior investment manager at sister company Architas handed the reins to Anne Tolmunen (pictured).

The name change took place on 3 August.

Tolmunen says: “We’ve seen a lot of new products propping up with catchy names, like the Girl Fund in the UK and the Her ETF and the She ETF.”

The original name reflected seed funding from parent group Axa, Tolmunen added. “The Mix in Perspectives was really to reflect our own roots because that’s the name of our own internal women’s network.” She added ‘mixité’ in French is a synonym for diversity.

But that didn’t necessarily travel as they speak to investors in various countries outside France, including Australia, the UK, the US, she said.

Companies’ senior management and boards must be at least 20% female to be included in the fund’s investible universe. Signatories to the United Nations Women’s Empowerment principles are also automatically included, a factor that also informed the new name.

Earlier this year Helena Morrissey helped LGIM launch a passive fund focused on female representation in companies, which is known as the Girl fund. State Street Global Advisors launched the SSGA Gender Diversity Index ETF, under the ticker She, ahead of International Women’s Day in 2016. Today the She ETF has assets totaling $344.2m. The Evolve Funds’ North American Gender Diversity Index ETF launched in September 2017, under the ticker Hers.

UK advisers gave a mixed assessment when Morrissey launched the Girl fund in May.

Hollywood drives change

Enquiries about the fund have picked up since the start of the year.

Tolmunen partially attributed that to Hollywood, stating the Me Too movement had helped put women empowerment in the spotlight. The movement is more than a decade old, but came to prominence in October 2017 when US actresses and actors, starting with Alyssa Milano, began tweeting about their experiences of sexual assault in the industry.

However, Tolmunen said the UK leads when it comes to government action on the issue of gender equality, pointing to required reporting on the gender pay gap introduced this year. Companies with 250 staff or more have been required by law to release information on their gender pay gap.

“Suddenly all those companies have had to report on numbers they’d rather not report on even if they put out disclaimers about apple-to-apple comparisons.

“If it starts to go backwards or doesn’t progress it isn’t going to look good. That’s an effective tool in my view to bring change. This forces companies to ask themselves questions.”

The investment industry came off particularly badly in the required reporting. Women at fund groups were paid on average 29.5% less than male staff. At wealth management firms the gender pay gap was over 50% higher with women paid 40.9% less than their male colleagues on average.

Low beta defensive strategy

The fund would sit in a portfolio’s global equities allocation, said Tolmunen, who began her career in European then US equities before becoming deputy portfolio manager on the Global Talent fund, which focused on family-controlled businesses.

Facebook, Microsoft and Nike are among the fund’s top holdings.

Its beta is lower than the market at 0.96 over the last year, according to the July factsheet, resulting in a defensive tilt, she said. The fund therefore underperformed in Q4 2017, a market  that “lifted all boats”, but outperformed in the market selloff in Q1 this year, she said.

Axa WF Framlington Women Empowerment performance

1m 3m 6m 1yr
AXA World Funds Framlington Women Empowerment 3.25% 9.01% 14.29% 14.21%
Offshore Equity
International sector
3.58% 6.20% 12.19% 10.56%
MSCI AC World index 4.03% 5.85% 12.96% 13.67%
Source: FE Analytics

Private banks have shown a lot of interest in the fund, while a French confederation of trade unions that has focused on narrowing the gender pay gap is also an investor.

– This article first appeared on ESG Clarity‘s sister site Portfolio Adviser.