The manager's UK Select Opportunities fund endured a poor 2016, a return of 4 per cent putting him fourth quartile versus peers and underperforming the FTSE All-Share by almost 13 percentage points.
Mr Thomas pointed the finger at cyclical stocks' recovery and the international earners that benefited from sterling's 16 per cent fall against the dollar.
His relative returns have improved slightly this year amid a stabilisation in the pound, but the manager warned he would not be able to prevent further underperformance were 2016's market environment to return.
"Sterling might drop [again] and there's nothing I can do about that. Anthony Bolton famously [underperformed] for three years, I’m quite capable of doing that as well if this environment carries on," Mr Thomas said, referring to the veteran Fidelity manager's time in charge of its China Special Situations fund.
Speaking at Chelsea Financial Services' investment dinner, Mr Thomas, whose fund is up 4.5 per cent compared to 7.3 per cent for the index this year, added he would not review his underweight position in banks despite the sector's return to form.
The sector has returned 36 per cent in the last 12 months, compared with the FTSE All-Share's 24 per cent.
But the manager said the average return on equity from banks over the long-term was not satisfying, and said the sector remained extremely cyclical in nature.
"As an investment area, it's not the right one for me, there is better elsewhere," Mr Thomas said - making exception for his 2 per cent holding in HSBC.
Mr Thomas added: "You can just about make the case for HSBC which is coming out of its 2003 mistake of buying Household International [a high-risk US lender] but you don't need to own 6 per cent like the index. They're out of [crisis surrounding other financials] because they have nothing to hide and have been through it all."
Despite the manager's bearishness, sectors such as banks, energy and commodities have benefited from improved sentiment towards cyclical stocks over the past 12 months. But it is international earners which have performed most notably in the UK, driven by sterling's post-EU referendum fall against most major currencies.
In keeping with this drop, the second half of 2016 also saw investors grow more cautious on domestic-focused shares, many of which populate the Axa IM fund's top ten holdings.
As a result of this shift in market leadership, Mr Thomas has now underperformed the index over one, three and five years. However, in the three and five years prior to 2016, Mr Thomas exceeded the FTSE All-share by 19 and 24 percentage points respectively.
The veteran manager, whose fund has witnessed more than £700m in outflows in the last year according to Morningstar, said he believed a more sanguine domestic environment would allow company fundamentals, rather than political and macroeconomics, to exert the greatest influence over share prices once more. The dispersion between individual UK share prices has picked up in 2017, which should in theory present active fund managers with a better environment in which to outperform their benchmarks.
One area of focus for Mr Thomas going forward would be the UK e-commerce space, somewhat demonstrated by the 4.9 per cent holding in online estate agent Rightmove.
"The UK is a leading country in e-commerce. It has embraced online," Mr Thomas said highlighting 6.1 per cent of the country's GDP is in e-commerce, second only behind China's 7 per cent.
