Head To Head

HEAD-TO-HEAD: Axa IM versus T Rowe Price

FSA compares two global equity funds: The Axa Framlington Global Technology Fund and the T Rowe Price Global Technology Equity Fund.

by Francis Nikolai Acosta 28 August 202030 November 2020

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INVESTMENT APPROACH

Both the Axa and T Rowe funds invest in global technology stocks and employ a bottom-up approach to investing.

At first glance, both funds look similar. For example, the offerings have a tilt toward US-listed companies, although the Axa fund has a higher allocation to the market, according to McDermott.

Country/regional allocation

Axa IM		T Rowe Price
Country	%	Country	%
North America	86.28%	US	69.7
Emerging markets	6.31%	China	7.4
Developed Apac (ex-Japan)	1.32	Canada	4.4
Europe (ex-UK)	1.27	Taiwan	3.7
UK	2.01	Netherlands	3.5
		Singapore	3.2
		Germany	3.1
		South Korea	2.6
		Brazil	0.8
		Argentina	0.5

Source: Fund factsheets

In addition, both funds have Facebook, ServiceNow, Salesforce and Amazon.com on their top 10 holdings, according to their fund factsheets. The level of concentration of their top 10 holdings is also similar, lying between 35-40% of their portfolios.

Top 10 holdings

Axa IM		T Rowe Price
Company	%	Company	%
Apple	7.9%	Amazon.com	6.10%
Alphabet	6.5%	Alibaba	5.90%
Visa	3.6%	Shopify	4.40%
Qualcomm	3.0%	Netflix	4.30%
Facebook	2.8%	Taiwan Semiconductor Manufacturing	3.70%
ServiceNow	2.6%	Sea	3.20%
Paypal Holdings	2.5%	Salesforce.com	3.20%
Salesforce.com	2.4%	Facebook	3.20%
Amazon.com	2.4%	Slack Technology	2.80%
Cisco Systems	2.3%	ServiceNow	2.80%
Number of holdings	66	Number of holdings	50

Source: Fund factsheet

However, McDermott pointed out that both funds have some differences, particularly on the market-cap spectrum that they invest in.

According to him, the Axa fund is more open to investing in small- to medium-sized companies.

“[The Axa manager] believes the benchmark is populated with the successful technology companies of the past, not necessarily the future. He, therefore, looks for new technology with proven commercial viability,” McDermott said.

On the other hand, the T Rowe fund is more biased toward mid- to large-cap companies “that they believe are positioned to benefit from key secular trends and have long-term growth prospects”. cu

Market cap	Axa IM	T Rowe Price
Giant	34.31%	47.86%
Large	27.46%	36.17%
Mid	24.06%	11.20%
Small	5.00%	0.53%

Source: Morningstar Direct

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