Fund of the week: Axa’s ready-made portfolio

Its moniker may lack glamour, says Mark Dampier of Hargreaves Lansdown in The Independent, yet Axa Framlington Managed Balanced is “the type of fund most investors should own”. This is because it includes equities, bonds and cash, making it a “ready-made portfolio”.

The strategy behind the fund, launched in 1992, is to seek capital growth by investing 80% in shares and the rest in cash and bonds. It can buy securities in any worldwide economic sector that manager Richard Peirson believes shows above average profitability. So far this approach is paying off.

According to Trustnet.com, the fund delivered a return of 13.3% over one year, 26.5% over three years and 28.6% over five years. Its annual charge, meanwhile, is a reasonable 1.25%. By striking a balance between bonds, cash and equities Peirson also reduces volatility.

A high equity weighting means that “if the good times return then he will be there to take advantage”, says Frank Talbot on Citywire.co.uk, while the bond and cash position “provides insurance against the situation getting worse”.

The secret of the veteran fund manager’s success is favouring FTSE 250 companies. These, notes Dampier, have largely beaten the FTSE 100 in the last ten years. Around 48% of his holdings are British stocks, with about 40% international shares, selected by other specialist Axa Framlington managers.

Despite Britain’s economic gloom, Peirson remains optimistic about the opportunities in the FTSE 250. For investors seeking diversification, Axa Framlington Managed Balanced offers “an aggressively positioned mixed asset fund” that’s well worth a look, says Talbot.

Contact: 0845-777 5511.

Axa Framlington managed balanced fund

Axa Managed Balanced top ten holdings

Name of holding % of assets
Axa Fram. Emerging Markets 3.0
Treasury 5% gilt 2025 2.6
Germany 0.75% BDS 13/09/13 2.4
HSBC Holdings 2.2
Royal Dutch Shell 2.1
Treasury 2 1/2% IDX-linked gilt 2.0
GlaxoSmithKline 1.6
Vodafone 1.4
BP 1.4
Diageo 1.4

Merryn

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