Axiom International Ethical Fund (Hedged)

An option of HEDGED or UNHEDGED portfolios of dynamic and growing companies undergoing positive change, within a robust ethical framework.

May 2022 - Monthly REPORT

Axiom Investors - May 2022


  1. New positions initiated in Global Pharmaceutical business Eli Lilly, And consumer good giant Nestle
  2. We exited our holding in Trex which will be affected by a slowdown in US housing activity, and Block due to their exposure to cryptocurrencies, as well as the deteriorating prospects for Afterpay
  3. We continue to believe that positive earnings revisions will be the most likely factor to drive outperformance at this point in the economic cycle


During May 2022, the Pengana Axiom International Ethical Fund (Hedged) (“Fund”) generated a return of -2.5%, underperforming the benchmark, the MSCI All Country World Total Return in AUD (Hedged), by -2.3%.

Portfolio Manager Bradley Amoils recently held a Portfolio and Investment Update webinar which can be found below. Financial planners may also complete a short questionnaire available HERE for CPD points.


Top Holdings (alphabetically)

Alphabet Inc
United States
Communication Services
Alphabet Inc. operates as a holding company. The Company, through its subsidiaries, provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce, and hardware products.
United States
Consumer Discretionary, Inc. is an online retailer that offers a wide range of products. The Company products include books, music, computers, electronics and numerous other products. Amazon offers personalized shopping services, Web-based credit card payment, and direct shipping to customers. Amazon also operates a cloud platform offering services globally.
Asml Holdings
Information Technology
ASML Holding N.V. develops, produces, and markets semiconductor manufacturing equipment, specifically machines for the production of chips through lithography. The Company services clients worldwide.
United States
Health Care
Danaher Corporation designs, manufactures, and markets professional, medical, industrial and commercial products, and services in the sectors of test and measurement, environmental, life sciences, dental, and industrial technologies.
Estee Lauder Cos Inc
United States
Consumer Staples
The Estee Lauder Companies Inc. manufactures and markets a wide range of skin care, makeup, fragrance, and hair care products. The Company's products are sold in countries and territories around the world.
United States
Information Technology
Microsoft Corporation develops, manufactures, licenses, sells, and supports software products. The Company offers operating system software, server application software, business and consumer applications software, software development tools, and Internet and intranet software. Microsoft also develops video game consoles and digital music entertainment devices.
ServiceNow Inc
United States
Information Technology
ServiceNow, Inc. provides enterprise information technology (IT) management software. The Company designs, develops, and produces prepackaged computer software, cloud services, and IT service management platform. ServiceNow serves customers throughout the United States.
Sony Group Corp
Consumer Discretionary
Sony Group Corporation manufactures and distributes electronics products and provides related solutions. The Company produces televisions, cameras, mobiles, audio and video products. game equipment, and more. Sony Group also engages in game production, movie production, music production, and other businesses.
TE Connectivity
United States
Information Technology
TE Connectivity Limited provides engineered electronic components, network solutions, undersea telecommunication systems, and wireless systems. The Company designs, manufactures, and markets products for customers in industries ranging from automotive, appliance, and aerospace and defense to telecommunications, computers, and consumer electronics.
Tesla Inc
United States
Consumer Discretionary
Tesla Inc. designs, manufactures, and sells high-performance electric vehicles and electric vehicle power train components. The Company owns its sales and service network and sells electric power train components to other automobile manufacturers. Tesla serves customers worldwide.

Sector Breakdown

Capitalisation Breakdown

Region Breakdown




Pengana Axiom International Ethical Fund (Hedged)1

The Class was established in 1 July 2017. From June 2021 Axiom was appointed as the investment manager for the Fund.

Axiom Appointed
June 2021
1Y 3Y
Since Fund
July 20173
Since Strategy
July 20044
Fund: APIR (HHA0002AU)2,3

Managed by Axiom from June 2021
-2.5% -15.3% -15.3% 4.5% 6.0%
Current Strategy (Partial Simulation)5

Axiom Global Equity Strategy
10.3% 9.7% 9.5% 9.6%
Index (Hedged)6 -0.2% -4.4% -4.4% 12.3% 9.3% 9.3% 9.5%

Swipe horizontally to see all columns




The headwind for growth orientated strategies continued through May.  The market sold off sharply in the early part of the month as  concerns around increasingly restrictive monetary policy and the COVID-related economic slowdowns in China weighed on sentiment. However, the market ended the month reasonably flat as some evidence of “peaking” inflation (i.e. improved personal consumption expenditure in the US) started to emerge.  There is less evidence in Europe, where German CPI grew +7.9% year over year, compared to +7.2%, driven by higher commodity prices and a strong US dollar, and German retail sales only rose +2.5% year over year, which was significantly less than the consensus expectations of +4.4%

Against this backdrop, Axiom continues to focus on dynamic growth stocks.  We believe positive earnings revisions will be the most likely factor to drive outperformance at this point in the economic cycle. The Fund continues to be overweight in information technology and consumer discretionary, and has moved into a slight overweight position in healthcare.  We remain underweight in financials, energy, and materials and have reduced our position from overweight to underweight in industrials.

Turning to attribution, the Fund underperformed in the communication services, industrials, and information technology sectors. Tesla, Gartner, and Live Nation were the largest relative detractors. China’s COVID lockdowns in Shanghai continued to impact Tesla’s production, and the shares were further pressured by volatility related to founder/CEO Elon Musk’s proposed acquisition of Twitter.   Gartner reversed April’s strong performance as strong earnings and a raise to full-year guidance was sold on heightened investor expectations. Sony, Danaher, and Blackstone were our top relative performers in May.  Sony reported strong results and provided positive forward-year guidance with particular focus on their semiconductor division.  Danaher’s shares rebounded strongly late in the month along with broader markets. It was pleasing to see MSCI recognising their improved governance practices with an upgrade to their ESG rating.

Our biggest portfolio changes during the month were allocating capital away from consumer discretionary and industrial sectors, and continuing to downsize in information technology.  Tesla, Recruit and Atlas Copco were the largest position reductions.  For Tesla, the production impacts from the COVID lockdown in Shanghai are making us more cautious about near-term operational fundamentals warranting a decrease in exposure. We significantly reduced our holding in Recruit prior to their earnings announcement as we had concerns around slowing trends in their core job placement portal.  Slowing global economic growth also poses risks to Atlas Copco. One of the Strategy’s largest additions was Novo Nordisk.  In addition to very strong operating results, our tracking of script data indicates that key drug Ozempic continued to track above consensus expectations.

We initiated new positions in Eli Lilly and Nestle.  Eli Lily is a global pharmaceutical company currently benefitting from the dual drivers of a duopoly with Novo Nordisk in the GLP-1 class of diabetes treatments which is tracking ahead of expectations, and continuing to gain share from the breast cancer drug Verzenio, which is capturing the majority of new patient starts.  For Nestle, our analysis indicates upside for a number of  their businesses including premium coffee and pet food as pricing power and the limited price elasticity of demand are driving revenue growth above consensus expectations.

We exited two names during the month, Block and Trex.  Block’s exposure to cryptocurrencies, as well as the deteriorating prospects for the recently acquired Afterpay BNPL (Buy-Now-Pay-Later) business drove us to exit the remaining small position.  Trex, a leading provider of alternative “wood” products, primarily made from recycled materials, will be negatively impacted by the slowdown in US housing activity as increasing mortgage rates impact affordability.





  • FEES * Management Fee: 1.35% p.a
  • Minimum initial investment $10,000
  • FUM AT MONTH END A$ 45.99m
  • BenchmarkMSCI All Country World Total Return in AUD (Hedged)

Fund Managers

Bradley Amoils

Managing Director/Portfolio Manager

Andrew Jacobson

CEO/Chief Investment Officer


The Pengana Axiom International Ethical Fund (Hedged) invests in companies that are dynamically growing and changing for the better, more rapidly than generally expected and where the positive changes are not yet reflected in expectations or valuation.

The Global Equity Strategy seeks dynamic growth by concentrating its investments in global developed markets, and may also invest in companies located in emerging markets.

The investment manager is Axiom Investors, a Connecticut-based global equity fund manager formed in 1998 with over US$19billion in assets under Management.


Harding Loevner International Fund
Harding Loevner International Fund
Axiom International Ethical Fund
Axiom International Ethical Fund
Axiom International Ethical Fund (Hedged)
Axiom International Ethical Fund (Hedged)
Australian Equities Fund
Australian Equities Fund
High Conviction Property Securities Fund
High Conviction Property Securities Fund
Global Small Companies Fund
Global Small Companies Fund
WHEB Sustainable Impact Fund
WHEB Sustainable Impact Fund
Emerging Companies Fund
Emerging Companies Fund
High Conviction Equities Fund
High Conviction Equities Fund
Pengana International Equities Limited (ASX: PIA)
Pengana International Equities Limited (ASX: PIA)
Private Equity Trust (ASX: PE1)
Private Equity Trust (ASX: PE1)
Alpha Israel Fund
Alpha Israel Fund

1. From 4 June 2021 the capital component of the foreign currency exposure for the Fund is hedged back to Australian dollars.
2. Axiom was appointed fund manager as of 5 May 2021. June 2021 represents the first full month of Axiom managing the Fund.
3. Inception date 1 July 2017. Figures shown are calculated from the continuous performance of both the current and previous strategies. For performance see row labelled Fund: APIR (HHA0002AU) in the table above which is the continuous performance of both the current and previous strategies.
4. Axiom Global Equity Strategy inception 1 Jul 2004.
5. Prior to 1 June 2021, the Axiom Global Equity Strategy performance (labeled ‘Current Strategy (Partial Simulation)’ and shown in the shaded area) includes the strategy performance simulated by Pengana from the monthly gross USD returns of the Axiom Global Equity strategy. The Axiom Global Equity Strategy performance does not include the Pengana ethical screen
6. Prior to 4 June 2021 hedged performance has been simulated by Pengana for both the Fund and Index. This was done by: 1) using 3 month rolling forwards to hedge movements in the AUD/USD spot rate, and 2) deducting the Pengana International Ethical Fund (Hedged) management fee of 1.35% p.a. from the Fund’s performance.
From 4 June 2021, index performance is from the MSCI All Country World Total Return in AUD (Hedged). Prior to 4 June 2021, index performance is simulated from the MSCI All Country World Total Return in USD
7. Performance for periods greater than 12 months are annualised. Net performance figures are shown after all fees and expenses, and assume reinvestment of distributions. No allowance has been made for buy/sell spreads. Past performance is not a reliable indicator of future performance, the value of investments can go up and down.
8. Annualised standard deviation since inception.
9. Relative to the MSCI All Country World Total Return in AUD (Hedged).
*For further information regarding fees please see the PDS available on our website.