Axa’s Thomas hails US ‘renaissance’
The manager of the £3.2bn Axa Framlington UK Select Opportunities fund said cheap natural gas supplies would help protect the US economy from high oil prices.
Mr Thomas said US oil imports could drop from 9m to 2m barrels a day by 2020, replaced by internal supplies and gas generation as industrial firms bring manufacturing jobs back to the US.
He said: “Wage increases in China, vastly inflated Chinese real estate and transportation costs, combined with the tragic natural disasters in Thailand and Japan, have given many US companies more ‘near shore’ options. It is now cheaper to build a manufacturing site in Tennessee than China.”
The manager hailed his portfolio’s US exposure, particularly chemicals firm Elementis, which he said had increase profits 40 per cent in its February 28 annual results. Other companies in his fund heavily reliant on the US economy are energy services provider Hunting, Shire Pharmaceuticals, BBA Aviation, Pearson, Spirent Communications and Experian.
Mr Thomas has also invested significantly in technology stocks, also with a US bias.
“Innovation and penetration of smart mobile devices is creating new companies and investment in businesses doing things differently,” the manager said. “The development of ‘ubiquitous computing’ brings the internet, retailing, entertainment and information directly to an individual and this leads to massive investment by companies to accommodate this through investment in software, infrastructure, bandwidth, semiconductors, batteries and content.”
The Axa Framlington UK Select Opportunities fund posted a top quartile return of 18.1 per cent over five years to May 10, according to Morningstar, compared with an IMA UK All Companies sector average fall of 2.9 per cent.