The firm said that each area is already investable via listed equities and represents multi-decade growth themes with greater than 10% year-on-year growth potential.
The five themes are designed to “better align with the … rapidly evolving economy” and include ageing and lifestyle led by Dani Saurymper, which focuses on extended life expectancy; the connected consumer, overseen by Jeremy Gleeson, covering the e-commerce value chain; and automation, headed up by Tom Riley, targeting the application of robotics across a variety of industries.
It will also consider cleantech under Amanda O’Toole, focusing on low-carbon economy solutions and sustainability, and transitioning societies under Anne Tolmunen, who will look at changing consumer patterns and economic inclusion.
Mark Beveridge, global head of Framlington Equities at Axa IM said one reason for the restructuring was because companies are increasingly becoming multi-sector businesses, meaning “traditional sector definitions do not apply any longer.”
He said: “Equity investment is changing. While globalisation has made geographical listing less relevant for investors, sector definitions have also not evolved over time; the reality is that markets and companies have.
“Knowing companies, meeting their management teams and being a long term active manager is essential in identifying companies that are exposed to these growth themes. Passive investing relies too heavily on companies which fall neatly under sector definitions, meaning investors risk missing out on the more nuanced growth opportunities these themes can deliver.
“We are convinced that the themes we have identified will accelerate over the next decade and believe investors have to adapt. In recognition, we have adapted our internal research capabilities by identifying five main long-term growth thematics within the ‘evolving economy’.”
Although Axa IM said active bottom up stock picking is still the main driver of Framlington Equities, the thematics will compliment existing fundamental research.
Mark Hargraves, head of global strategies at Framlington Equities, added: “This is not new for us, just a proactive, more structured way of identifying the growth opportunities prevalent in the evolving economy to clients.
“Ultimately by adapting our internal research focus this enables us to optimise research activities to fully capture the investment implications of these five thematics that are influencing the global economy.
“This provides an additional way to identify true growth companies with pricing power and competitive advantage, without being constrained by the traditional barriers of sectors. Many companies are no longer respectful of these sectors and are changing, so are we.”
