AXA IM is to launch the first offshore access fund to its UK investment team. The World Funds Framlington UK will be managed by Chris St John who will take an unconstrained multi-cap approach.
The fund will, however, have a structural bias to mid-and small-cap companies relative to the FTSE All Share, which is where the manager expects to generate returns.
Mr St John will seek to identify undervalued growth opportunities, using a bottom-up, high-conviction stock selection process. He will be supported by Nigel Thomas, who is currently deputy on both of Mr St John’s open-ended funds.
Both have experienced relative success since launching the UK mid cap fund, delivering 114 per cent return since launch in March 2011 and outperforming the FTSE All Share by 39 per cent net of fees.
The Luxembourg-domiciled Sicav fund is due to launch on 2 March and will be available for distribution in the UK, France, the Netherlands, Sweden, Finland, Norway, Denmark, Austria, Belgium, Germany, Italy, Switzerland and Spain in due course.
The introduction of this fund can be viewed as a good opportunity for investors, especially those comfortable with the additional risk carried by small companies.
Mr St John should provide an additional layer of confidence, seeing as his current fund, the AXA Framlington UK Mid Cap, produced growth of 18.86 per cent against a sector average of 4.44 per cent over the past year. It has also appeared in the top 10 per cent of performers at every measure over the past three years.
However, although small-caps have seen fertile growth in recent times, the past six months have seen an average loss of over 10 per cent. So returns could be particularly volatile and should only be considered by those with a high risk appetite or who want to diversify within a larger portfolio.
If the manager’s approach is tried and tested, as the company claims, then this could be a welcome addition to any large or speculative investment portfolio, but he will almost certainly have to outperform the sector in what looks to be a challenging year for markets.