Investors looking for a truly diversified UK fund should consider AXA Framlington UK Select Opportunities, according to Andy Parsons (pictured), head of investment research at The Share Centre.

This morning FE Trustnet research showed that mid cap funds have outperformed their large cap rivals over the long-term, but AFI panellist Andy Parsons believes that this fund offers investors access to both that sort of growth potential as well as the more defensive properties of large cap stocks.

FE Alpha Manager Nigel Thomas, who heads up the fund, has a weighting of 53.82 per cent to the FTSE 100, but also seeks to add growth with the help of a 35.92 per cent exposure to the FTSE 250.

"Thomas has clearly proven over varying time periods and tough economic challenges that he has an ability to identify some of the very best investment opportunities," Parsons said. 

"He has been at the helm of the fund since September 2002 and brings his vast experience of stock picking to the table." 

According to data from FE Analytics, AXA Framlington UK Select Opportunities has returned 199.59 per cent since Thomas took over, more than double that of the IMA UK All Companies sector average of 98.07 per cent.

Performance of fund vs sector over 10-yrs



Source: FE Analytics

The five crown-rated fund has consistently performed well against its competitors and is in the top quartile of its sector over one, three, five and 10 years. 

Parsons praised the manager’s handling of a broad remit that allows him to select stocks from any sector and on different bases.

"The portfolio is diversified, typically holding around 80 stocks. There are no specific stock or sector constraints although exposure to any particular company is unlikely to exceed 3 per cent of the fund." 

"Stocks are selected in several ways. Thomas seeks a mixture of opportunities from circumstances such as recovery, growth, value, consolidation or even a complete management change, the introduction of new products, or technological change." 

AXA Framlington UK Select Opportunities is currently overweight in industrials, with an exposure of 23.58 per cent compared with 13 per cent from the IMA UK All Companies average. 

According to FE Analytics, its largest holding is the engineering firm Weir Group and it has more than 3 per cent in each of Royal Dutch Shell, Vodafone and GlaxoSmithKline. 

More unconventionally, the manager is unafraid of exposure to more volatile energy mid caps, with FTSE 250 firm Premier Oil also a top-10 holding.

The fund is considerably underweight financials.

According to data from FE Analytics, Thomas has outperformed his peer group composite in seven out of the last 10 years. He has also beaten his competitors in the previous two falling markets. 

The fund holds £3.2bn worth of assets and has a total expense ratio (TER) of 1.56 per cent.