The £2.8bn fund aims to achieve capital growth by investing in a portfolio of UK listed companies. FE Alpha Manager Nigel Thomas – who heads up the fund – has gained a reputation as one of the top stock-pickers in the industry.
The fund has consistently been in the top quartile for performance over the industry’s standard one-, three-, five- and 10-year periods and data from FE Analytics shows that it has beaten the UK All Companies sector average in each of the last 10 calendar years.
Performance of fund vs sector over 10-yrs
Source: FE Analytics
The fund has also been more stable than the average fund in the sector. Over five years its annual volatility score is 18.11 per cent while the average fund scores 18.22 per cent.
The IFA's view
"Whenever I’ve met Nigel Thomas he’s been able to talk in remarkable detail about any of the stocks in his portfolio," said Tim Cockerill, head of collectives research at Rowan Dartington.
"He’s known as an out-and-out stock-picker but he’s also very conscious of macroeconomics as well. He’s outperformed year after year irrespective of markets and while the fund is made up predominantly of FTSE 250 stocks he’s prepared to take small positions in smaller high-risk stocks to boost performance."
"Right now the fund has the flavour of a gradual shift from defensives into more positive stocks. Thomas has been adding to his position in miners such as BHP Billiton and has sold tobacco company Imperial."
Alternatives
M&G Recovery is probably the first fund that comes to investors' minds when looking for a UK growth fund. Like AXA Framlington UK Select Opportunities, FE Alpha Manager Tom Dobell’s fund has a proven record over a long period. The investment process focuses on finding unloved companies that are going through a transition or a period of poor performance but nevertheless are deemed to have good long-term prospects.
For investors who can afford to accept a little more risk, Ed Legget’s Standard Life UK Equity Unconstrained fund offers a more aggressive and concentrated portfolio with a higher weighting to cyclical stocks.
Verdict
The AXA Framlington UK Select Opportunities fund may not be the weapon of choice for most investors but its predictability and consistent returns make it suitable as a core component of any portfolio. The fund is gaining favour with many IFAs and its record over the long-term is impossible to ignore. Manager Nigel Thomas is one of the most experienced stock-pickers in the industry and has proven to be a safe pair of hands in all markets.