Axiom International Ethical Fund

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

August 2022 - Monthly REPORT

Monthly Report


  • Equity markets weakened upon fears that global interest rates would stay higher for longer, which especially impacted growth stocks
  • Share prices continued to receive some support from reasonably strong company earnings
  • The Fund returned -3.7% in August, while the benchmark returned -2.0%


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.
United States
Information Technology
Apple Inc. designs, manufactures, and markets personal computers and related personal computing and mobile communication devices along with a variety of related software, services, peripherals, and networking solutions. Apple sells its products worldwide through its online stores, its retail stores, its direct sales force, third-party wholesalers, and resellers.
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.
Gartner Inc
United States
Information Technology
Gartner, Inc. provides research and analysis on the computer hardware, software, communications, and related information technology industries. The Company's business segments includes research, consulting, measurement, events, and executive programs.
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.
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.
Visa Inc
United States
Information Technology
Visa Inc. operates a retail electronic payments network and manages global financial services. The Company also offers global commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities.

Sector Breakdown

Capitalisation Breakdown

Region Breakdown




Pengana Axiom International Ethical Fund

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

1M 1Y
Axiom Appointed
June 20211
3Y 5Y
Since Fund
July 20172
Since Strategy
July 20043
Fund: APIR (HOW0002AU)1,2

Managed by Axiom from June 2021
-3.7% -26.1% -7.3% 5.0% 7.6% 7.3%
Current Strategy (Partial Simulation)4

Axiom Global Equity Strategy
6.6% 10.6% 10.8% 7.4%
Index5 -2.0% -10.3% -0.5% 7.4% 10.1% 9.7% 7.1%

Swipe horizontally to see all columns




During August, the Fund underperformed the benchmark, the MSCI All Country World Index by 1.7%.

Growth-inclined stocks weakened upon expectations that interest rates would need to be higher for longer to bring inflation back under control. Global value stocks outperformed growth by 1.9% in August. 

The underperformance of growth companies occurred despite the continued moderation in inflation. The US Core Personal Consumption Expenditure (PCE) Price Index rose 4.6% year-on-year in August, down from the 4.8% July increase.

The more negative market sentiment followed a speech by Federal Reserve (Fed) Chair Jerome Powell at the Federal Reserve’s annual Jackson Hole conference. He detailed the Fed’s plan to slow inflation through higher interest rates, which reflected a willingness to tolerate higher unemployment and slower economic growth.  

This shifted market expectations towards a higher peak in interest rates next year and a longer pause before eventual monetary easing. This brought a 0.60% increase in the yield of the interest rate-sensitive two-year US Treasury bond, wider credit spreads and lower equity market valuations.

The US dollar continued to strengthen in August, pressuring European and emerging market economies. Meanwhile, commodity prices, except for European natural gas prices, continued to moderate, with the price of Brent crude oil falling by 5%.

Economic news varied by region, with stronger July US manufacturing and labour market data, while Europe and China continued to deteriorate.  Eurozone purchasing managers’ data were weaker in July, indicating the sector is contracting, while regional inflation continues to accelerate (rising 4.3% year-on-year in August, from 4.0% in July). 

China’s manufacturing activity continued to contract in July while services activity continued to moderate.  Rolling COVID-related lockdowns in China continue to constrain economic activity. 

The Fund retains its focus on dynamic growth stocks as positive revisions to earnings per share (EPS) should continue to drive outperformance, despite the economic uncertainty. The Fund continues to overweight information technology, consumer discretionary (especially companies with exposure to electric vehicles) and health care. It remains underweight financials, energy, and utilities.

The Fund’s stock selection in the information technology and materials sectors contributed to relative performance, while it detracted in health care and consumer staples. Samsonite, Gartner and Uber were the strongest contributors to performance, while ASML, Zoetis and Danaher were the most significant detractors.

Samsonite, the US-based travel baggage manufacturer, reported better-than-expected results in August, driven by strong earnings in Europe and Latin America. This offset shipping issues and COVID lockdowns that impacted results in North America and China respectively. Earnings before interest, tax and depreciation (EBITDA) margins exceeded expectations, while guidance for 2022 sales and margins both increased ahead of investor expectations. 

Similarly, the US-based technology consultancy Gartner reported improved revenue and margins, while future earnings guidance was revised higher, ahead of investor expectations. The company continues to compound earnings growth ahead of expectations due to its high sensitivity to accelerating revenue growth.  

Uber outperformed the market upon strong second quarter EBITDA, which was 37% ahead of expectations. This followed higher take rates – the fee charged by Uber to drivers of its ride hailing and Eats businesses. The company’s third quarter EBITDA guidance was also 15% ahead of expectations.  

Following strong outperformance in July, the fortunes of ASML, the Netherlands-based chipmaker supplier, reversed significantly in August as the semiconductor cycle deteriorated. The Fund remains underweight to semiconductor stocks, but it maintains a position in ASML as its sales orders this year are well ahead of expectations. This brings the opportunity for the company to outperform next year as the semiconductor cycle develops.

While the Fund significantly reduced exposure to pet care companies earlier this year, the holding in US-based animal drug group Zoetis detracted from relative performance during August. This followed concerns that inflation may negatively impact consumer discretionary spending on pet care. 

US-based diversified technology group Danaher underperformed the market in August as growth companies weakened. This followed strong performance in July following its well-received earnings results. The company continues to outperform expectations across its core life sciences and diagnostic businesses. Its low debt levels may enable it to take advantage of opportunities to grow through acquisition over the medium term.

The Fund’s biggest change during the month was a capital allocation away from communication services and information technology and into the industrial sector. 

US-based global entertainment company Live Nation was the largest position reduction, despite continued strong earnings results. However, incoming data on the impact of inflation on discretionary consumer spending given the high ticket prices of live events led to a substantial reduction in the position.

The Fund continued to reduce its semiconductor exposure via further sales to the small positions in Advanced Micro Devices and STMicroelectronics. Data continues to deteriorate despite both companies reporting strong near-term results. 

The Fund’s position in the Canadian fertilizer group Nutrien was substantially reduced during August, as demand in the global potash market was impacted by high prices. However, the addition of Albemarle, a global leader in lithium production, resulted in a broadly unchanged weighting to the materials sector.  

The Fund did not exit any positions in August.

The Fund’s largest position increase during August was to Gartner, following strong second quarter earnings results. The Fund’s updated financial modelling of the company shows further incremental upside potential to 2023 earnings and free cash flow. 

The Fund continued to add to its holding in the French luxury design house Hermes during August. Data continued to demonstrate the strength of the high-end consumer market and the company’s product positioning. 

The Fund continued to further increase its recently established position in the US-based business advisory firm FTI Consulting. The stock provides counter-cyclical economic exposure due to its leading position in corporate restructuring and litigation services consulting.

The Fund initiated a position in US-based specialty chemicals manufacturer Albemarle during the month. The company has continued to increase its lithium contract sale prices ahead of investor expectations, these are now closer to spot rates observed in the market. This repricing opportunity appears to be sustainable given the favourable long-term supply/demand fundamentals in the global lithium market.  

Two holdings, Danaher and Callaway, received upgrades from MSCI’s ESG ratings service. Danaher’s upgrade was driven by improvements to the firm’s whistle-blower protection policies and changes to product quality and safety measurement practices. Danaher leads its peer group in quality management, supplier training, and ISO 13485 certifications. 

US-based Callaway Golf Company’s ESG upgrade was driven by the reduction in single-use plastic packaging within the firm’s golf equipment and accessories business. MSCI now views Callaway’s single-use plastics exposure as ‘low’ given the company’s implementation of package ‘lightweighting’ and use of alternative materials.





  • FEES * Management Fee: 1.35% p.a
  • Minimum initial investment $10,000
  • FUM AT MONTH END A$ 282.28m
  • BenchmarkMSCI All Country World Total Return Index (net, AUD)

Fund Managers

Bradley Amoils

Managing Director/Portfolio Manager

Andrew Jacobson

CEO/Chief Investment Officer


The Pengana Axiom International Ethical Fund 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

Prior to June 2021, the Axiom Global Equity Strategy performance (shown in the shaded area) includes the strategy performance simulated by Pengana from the monthly gross returns of the Axiom Global Equity strategy. This simulation was done by: 1) the conversion of US-denominated gross returns to AUD, 2) applying the fee structure of the stated class. The simulation does not include the Pengana ethical screen. From June 2021 the strategy performance is the performance of the Pengana Axiom International Ethical Fund.

1. Axiom was appointed fund manager as of 5 May 2021. June 2021 represents the first full month of Axiom managing the Fund.
2. 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 (HOW0002AU) in the table above which is the continuous performance of both the current and previous strategies.
3. Axiom Global Equity Strategy inception 1 Jul 2004.
4. Prior to June 2021, the Axiom Global Equity Strategy performance (labeled ‘Strategy (Partial Simulation)’ and shown in the shaded area) includes the strategy performance simulated by Pengana from the monthly gross returns of the Axiom Global Equity strategy. This simulation was done by: 1) the conversion of US-denominated gross returns to AUD, 2) applying the fee structure of the stated class. The simulation does not include the Pengana ethical screen. From June 2021 the strategy performance is the performance of the Pengana Axiom International Ethical Fund.
5. MSCI All Country World Total Return Index in AUD.
6. 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. Please refer to the PDS for information regarding risks. Past performance is not a reliable indicator of future performance, the value of investments can go up and down.
7. Annualised standard deviation since inception.
8. Relative to the MSCI All Country World Total Return Index in AUD.
*For further information regarding fees please see the PDS available on our website.