AXA Framlington UK Mid Cap
AXA Framlington UK Mid Cap fund is unashamedly growth-orientated. While it naturally focuses on medium-sized companies, its manager will be pragmatic about including select opportunities from the smaller companies space, as well as letting winning mid-cap holdings grow into larger-sized companies.
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Chris is the lead portfolio manager for the UK Mid-Cap and UK Multi-Cap strategies. He joined Framlington Equities in 2005, managing UK small and mid-cap pension funds and initially leading the UK Smaller Companies strategy. He launched the UK Mid-Cap strategy in 2011 and has also contributed to the Multi-Cap strategy. Before Framlington, Chris worked at Foreign & Colonial, advancing from equity analyst to lead manager of four FTSE Small Cap funds and later UK small cap retail funds. He began his career at PricewaterhouseCoopers in 1995. Chris graduated with an Honours degree in Philosophy and Psychology from Durham University and became a Chartered Accountant in 1998.
Dan Harlow joined AXA IM in 2010, initially managing the UK Smaller Companies fund with Chris St John until November 2011. He then co-managed the AXA Framlington American Growth Fund before returning to lead the AXA Framlington UK Smaller Companies fund in June 2016. Prior to AXA IM, Dan was Head of UK Equities at Montanaro Asset Management, where he managed UK small cap portfolios, including the Montanaro UK Smaller Companies Investment Trust, achieving a 24% cumulative outperformance of the FTSE Small Cap ex IT benchmark from March 2006 to January 2010. Dan graduated from the University of Southampton with a BA (Hons) in History in 1999 and an MSc in International Relations in 2000.
Chris is the lead portfolio manager for the UK Mid-Cap and UK Multi-Cap strategies. He joined Framlington Equities in 2005, managing UK small and mid-cap pension funds and initially leading the UK Smaller Companies strategy. He launched the UK Mid-Cap strategy in 2011 and has also contributed to the Multi-Cap strategy. Before Framlington, Chris worked at Foreign & Colonial, advancing from equity analyst to lead manager of four FTSE Small Cap funds and later UK small cap retail funds. He began his career at PricewaterhouseCoopers in 1995. Chris graduated with an Honours degree in Philosophy and Psychology from Durham University and became a Chartered Accountant in 1998.
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Company Description
AXA Investment Managers (AXA IM) is the asset management arm of the eponymous French insurance giant. AXA IM’s equity investment team manages a range of qualitative and quantitative solutions. AXA IM’s qualitative equity strategies – which are actively managed - aim to generate high and consistent returns over the long term, investing in companies with high revenue growth and sustainable profit margins. The quantitative investment approach, driven by the ‘Equity QI’ team, combines vast sets of data and technology to seek investment opportunities on a global scale. AXA IM Equity was awarded the Elite Provider for Equities rating in 2015, 2016, 2018 and 2021.
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Quote from the Fund Manager
We use our eyes, ears, experience and judgement to seek out companies that can grow to become much larger businesses over time.
Cristopher St John
Lead Manager
Investment process
Manager Chris St John will look for companies that are high quality (both financially and in terms of their management teams) that can show sustained profitability, and that exhibit future growth potential.
The first stage of Chris’s process is a thematic overview looking at key themes that should drive growth going forward, such as increasing life expectancy, digital transformation and a low-carbon economy.
The second stage is individual company analysis. Chris will look at factors such as the management’s track record in delivering earnings and its funding strategy. He will also look for positive signs such as a company experiencing organic growth, exhibiting good pricing power and having high barriers to entry. He will also look at quantitative factors like earnings yield and growth and dividend growth potential to demonstrate how efficient the company is at operating its business.
Chris will then meet company management. This is a very important part of the process. It allows him and his team to test their analysis and interpretation against the people who are set to implement it.
Having established the investment case for a company, Chris then moves on to valuations. Here, he will look at a variety of metrics for comparison purposes. While he wants to find growth, he doesn’t want to overpay for it.
Risk
While benchmarked against the FTSE 250 (ex Investment Trusts) AXA Framlington UK Mid Cap fund can run into the larger cap FTSE 100 (up to 15%), as well as own some names in the AIM and FTSE Small Cap markets. Due to the fund having slightly different exposure to the benchmark, it will often have higher exposure to companies with revenues from across the globe. This may lead to a larger impact from global currency movements. Risk parameters include positions up to 4% and an independent risk team will monitor risk at individual holding and portfolio level.
ESG
ESG - Limited
As a firm, AXA has company-wide investment restrictions based on specific ESG risks – an approach that has been very forward thinking. It monitors and excludes multiple industries for all assets under management (e.g: controversial weapons, palm oil and soft commodities). It has also recently enforced and strengthened its stance on coal-based power production with limits and exclusions on revenue, power generation, expansion and mining development. Beyond this, the fund has no further restrictions. Governance is, however, an important consideration, and Chris always engages with management teams of his portfolio holdings.
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