Axa IM’s multi-cap to target broad spread of stocks

Axa IM’s multi-cap to target broad spread of stocks

Axa Investment Managers’ Chris St John is not looking to go “off piste” with his new multi-cap fund, but will lower stock concentration compared with his mid-cap vehicle.

Mr St John is set to run the Axa WF Framlington UK fund – which launched last week – as his first solo multi-cap portfolio. He currently manages the company’s UK Mid Cap vehicle.

He said stocks in the Mid Cap fund would form the “core” of the offshore multi-cap product. But the overall number of stocks in the latter will rise to a maximum of 90 holdings, in order to accommodate smaller firms.

Article continues after advert

“In essence it will be a mid-cap fund with a bit of freedom either side [of the market-cap spectrum]. It will have a broad spread throughout the FTSE All-Share index, with exposure to the Alternative Investment Market,” he said.

While the fund is unlikely to include any stocks not held elsewhere on the Framlington equities desk, Mr St John said he would venture away from Nigel Thomas’s UK Select Opportunities fund and include more specialist firms.

Mr St John said he was looking to add Arm Holdings, which is held by Jeremy Gleeson in his Axa Framlington Global Technology fund but is not in Mr Thomas’s portfolio.

He will also target smaller stocks, such as travel agency On The Beach and Gym Group.

Mr St John is deputy manager on the UK Select Opportunities fund and is in line to succeed Mr Thomas when he retires.

The UK Mid Cap vehicle has a stock limit of 80, but the additional 10 positions will allow Mr St John to hold small caps without becoming too large a shareholder in a given stock.

“A concentrated portfolio doesn’t lend itself to small-cap investing. I want to be able to hold 20 or 30 basis points of the fund in a company,” he said.

The new fund would not have an even three-way split between small, mid and large caps, he added. However, it will follow the same principle as the UK Select Opportunities fund and Henry Lowson’s UK Smaller Companies vehicle in terms of investing in growth stocks offering sustainable dividends.

Mr St John said: “Some 95 per cent of the fund will be in [stocks held in] the UK Select Opportunities, my Mid Cap and the small-cap funds.

“But there will also be stocks held by Jamie Hooper in the UK Growth fund and some by the specialist desk.”