AXA Financial Fund Guide – April 2010 2010 For Financial Adviser use only. This document has been FINANCIAL approved for use by Financial Advisers only and should not be distributed to, or relied upon by retail clients. FINANCIALa reliable financial partner The AXA Financial proposition consists of over 50 funds, across 18 fund managers and 13 sectors that have been selected by the independent fund selection process. The goal is to provide both choice and conviction within each sector to facilitate the construction of appropriate and flexible investment portfolios for your clients. Market Capitalisation/Financial Strength 35.0 30.0 25.0 20.0 €bn 15.0 10.0 5.0 0 BBB+ A A A+ AA– AA AA– AA Irish Life AIB Bank of Standard AVIVA Great-West Zurich AXA Ireland Life Life Co Market capitalisation and financial strength rating of parent group. All ratings are from S&P and relate to long term debt where a financial strength rating is unavailable. Market capitalisation and financial strength as at December 4th, 2009. 3 Introduction Contents Welcome to the updated AXA Financial Fund Guide. This is a step-by-step, reference guide to our Tailored Page Selection of funds. 3 Introduction The guide provides, in easy to follow sections, details 4 The Way Forward and information on the fund sectors, fund groups and 6 Fund Groups Overview the funds themselves. 7 Funds by Sector In addition, summary charts and tables are provided 7 Asia Pacific ex Japan Equity Sector to aid you in your investment planning with your 8 Eurozone Equity Sector clients. 10 Global Emerging Equity Sector 12 International Equity Sector This guide is part of an extensive library of aids 15 Irish Equity Sector designed and aimed at helping you, the adviser. 15 Japan Equity Sector For further information please contact us directly 16 North American Equity Sector or visit our website www.axafinancial.ie. 18 Specialist Equity Sector 20 UK Equity Sector 22 Managed Sector 23 Property Sector 24 Fixed Interest Sector 26 Cash 27 Fund Groups 30 Funds Sector Overview 31 Fund Index AXA Financial provides one tax structure – hundreds of investment choices 4 The Way Forward AXA Financial offers over 50 funds on a single fund platform (The Tailored Selection). AXA Financial does NOT promote an in-house fund manager. Our entire focus is on the AXA Financial Investment Process. This process distinguishes the AXA Financial fund offering from the typical fund offering available in the Irish market. The process is split into two phases as discussed below. The AXA Financial Investment Process The quantitative analysis secures that Qualitative Phase The AXA Financial Investment Process factors such as luck are not inadvertently The qualitative phase of the Investment distinguishes the AXA Financial fund credited and that emotion does not enter Process begins with a high level review offering from the fund selection available the selection process at any stage. The of the fund, analysing the fund’s history from competitors. The process comprises team of a dozen fund analysts can then from a number of aspects. It then moves a quantitative and a qualitative phase. be sure that their time is spent on only to examine the constituent holdings of those funds most likely to succeed from a each fund from a number of perspectives Quantitative Phase quantitative perspective. including industrial sectors, market We are unique in that we employ a capitalisation, geographical allocation proprietary fund screening tool that The existence of a clear audit trail from and foreign currency exposures. The AXA exercises sufficient rigour to reduce the sourcing to selection of funds is a further fund analysts also look for any biases and universe of funds (excess 30,000) to a compelling recommendation for the establish how various underweight and number that can be passed through a Investment Process. This transparency overweight holdings relative to benchmark qualitative screening phase. This filtering provides comfort to clients and investment and sector average have influenced ensures that the number of funds passed advisers alike. The process also performance and volatility. to the qualitative phase is manageable eliminates the requirement for extensive while ensuring that no funds that exhibit and time consuming research by the Each fund manager is formally interviewed performance consistency (as measured investment adviser. by our analysts. The interviews are by a range of parameters and not just important as they grant valuable insight investment return) are missed. The funds emerging from the quantitative into how fund managers structure phase of the analysis are shaped by and process information that leads to Measuring a fund by its performance qualitative analysis. Our fund analysts rely investment decisions. Ultimately, the only tells one story. Each fund needs to on their experience, various backgrounds analysts are looking to assess how any be measured against a number of other and disciplines to rigorously interview and past out-performance will be sustained in salient parameters. Our analysis uses assess fund managers. The purpose of the future. 10 parameters including investment the interview is to seek an understanding return, maximum loss, volatility and of the processes that fund managers The level of interaction between the team correlation. Additionally, due to the follow and how they can sustain superior of AXA fund analysts and fund groups is nature, complexity and volatility of the performance into the future. extensive and this is illustrated by the fact underlying investments, measuring funds that there are in excess of 1000 research- over static 1, 3 and 5 year time periods is The power of this assessment is the based contacts with fund groups annually. inappropriate. The primary objective of the combined inputs from various fund This highlights the depth of the knowledge quantitative analysis is to find consistency. analysts to produce an evaluation of the base within the team of analysts. Each fund is compared with each other specific fund. With over 150 years of It is important to note, that once a fund fund within its peer group across 156 experience within the fund analyst team, secures a place on the Tailored Selection, different time periods for each parameter. it ensures that each fund is assessed it is not necessarily there to stay. Each The analysis then weights observations thoroughly. fund is continuously monitored to ensure with greater weight given to more recent that the parameters that it satisfied on its results. initial selection are maintained. 5 AXA Financial – Diversification when investing helps to reduce risk by allocating investments providing choice, among various financial instruments, industries and other categories. The goal is to maximise return by investing in different areas that would each react differently conviction and Choice to the same event. flexibility AXA Financial differs from traditional product providers, who promote in-house fund managers and a limited choice of external funds, by offering access to an unbiased range of external funds. The Fund Selection Process applies a rigorous and uniform research approach to each fund selected. Conviction AXA Financial recognises that your needs can change with time, personal experience and necessity, and that your investments should be able to evolve and change with them. Because the funds and sectors within Evolution are all available through the one tax structure, selections and decisions can be changed at any stage Flexibility throughout an investment lifecycle. Consistently Consistent Investment performance is often have reviewed the investment We believe that the consistency of presented as a snapshot in time performance of the Tailored these performance figures is more with selected funds and selected Selection for the 5 year periods powerful than any performance time periods used to position fund to each of last four quarter ends snapshot over any specific time performance in the best light. At (31st March 2009, 30th June period. In volatile investment AXA Financial, we believe that 2009, 30th September 2009 times, these numbers should give consistent performance is more and 31st December 2009). confidence to the professional important and more valuable for The percentage of the Tailored Investment Adviser. the investor in the long run. Our Selection funds with a five year Source – Financial Express Irish fund sectors Investment Process is designed performance history that fall in the to achieve this consistency. top two quartiles were 93%, 86%, To illustrate the effectiveness 89% and 90% for each of these five of the Investment Process, we year periods. 6 Fund Groups Overview The following table provides a simple one page synopsis of the international fund groups associated with our Tailored Selection of funds. Further information on each of the fund groups can be found on page 27. No of AXA AUMs as at Financial Fund Group Website Founded AUMs Date Funds http://www.allianzglobalinvestors.com/en/Pages/default. Allianz aspx 1890 €1.0 trillion 31/12/2009 2 Baillie Gifford http://www.bailliegifford.com/ 1908 £56 billion 31/12/2009 2 10 http://www.blackrock.co.uk/Intermediaries/index.htm (incl 7 Blackrock 1988 $3.2 trillion 30/09/2009 passive funds) Fidelity http://www.fil.com/ 1969 $210 billion 30/09/2009 4 First State http://www.firststate.co.uk/HomeEnGB.aspx#2 1911 £70.8 billion 31/07/2009 3 Gartmore http://www.gartmore.com/ 1969 £21 billion 30/09/2009 2 Invesco http://www.invescoperpetual.co.uk/portal/site/splash-uk