AXA Framlington Monthly Income R

Targets a yield of 125% of that of the FTSE All-Share from UK equities and bonds.

  • 248.80p Price (Inc)
  • 642.90p Price (Acc)
  • 5.25% 0.00% Initial charge
  • 1.50% Annual management charge
  • 1.59% Ongoing charges
  • 4.50% Yield

Prices as at 06 December 2019, fund data last updated 13 November 2009

This fund uses the "barbell" strategy pioneered by manager George Luckraft, combining traditional high yielding equities, lower yielding growth stocks and some bond exposure to target a yield of 125% of that of the FTSE All-Share. The manager has a successful long term record, but the bias to often illiquid small and mid cap stocks can lead to periods of significant divergence from the benchmark

Fund summary

Sector UK Equity Income
Structure UNIT TRUST
Launched October, 1984
Size £373m
Yield 4.50%
Charging basis Capital
Dividends paid 6th day of each month

Charges

Standard initial charge 5.25%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.50%
Ongoing charges figure 1.59%

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Investment process

The fund aims to combine a regular income with the potential for long term capital growth. The approach is similar to that of the AXA Framlington Equity Income fund but targets a higher yield, 125% of that produced by the FTSE All-Share, through the inclusion of fixed interest securities. The manager uses a "barbell" strategy, splitting the portfolio into three parts: - High quality stocks with attractive, sustainable yields; - Fixed income and convertibles (around 15% of the portfolio); - Equities with attractive growth characteristics but little or low yield. This inclusion of the latter, often mid and small cap stocks, means the fund can still prove successful in a period where traditional 'value' stocks are out of favour. Weightings between the styles are varied according to market conditions. Stock research is primarily bottom-up, using company meetings and traditional valuation analysis, but the manager also looks at macroeconomic factors that may affect the portfolio.

Whilst George Luckraft's use of the “barbell” approach to UK Equity Income investment has been popularised among sector peers, the individual stock selection following the financial crisis of 2008-09 led to relative under performance in an environment that should have suited Luckraft's style in allocating to small and mid-cap stocks. This was downgraded to a 1-star 'Sell' rating in October 2011 and has since appeared in our 'Spot the Dog' guide in 2013.

Manager research

Average monthly relative returns

  • 14/15 0.07%
  • 15/16 0.05%
  • 16/17 0.38%
  • 17/18 0.17%
  • 18/19 -0.16%

Bestinvest MRI

  • 3 years 0.13%
  • 5 years 0.10%
  • Career 0.04%
  • 3 years 99.00%
  • 5 years 96.60%
  • Career 86.40%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

George Luckraft

Born in 1959, Luckraft obtained an Engineering & Land Economy degree from Cambridge, before going on to join the then John Carrington & Co in 1980. He had over 20 years' continuous service through the evolution of John Carrington & Co into ABN AMRO (now Artemis), eventually becoming head of UK Equities. In September 2002 he joined Framlington (now AXA Framlington) to manage a number of their income mandates.

Track record

George Luckraft has 23.9 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.04%. During the worst period of relative performance (from January 2003 - March 2009) there was a decline of 52% relative to the index. The worst absolute loss has been 46%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 86%.

Periods of worst performance

Absolute -46.00% (May 2007 - March 2009)
Relative -52.00% (January 2003 - March 2009)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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Top 10 holdings

Data accurate as at 30 August 2019

5.55% Royal Dutch Shell
4.65% Bp
4.11% Glaxosmithkline
3.97% Ienergizer Ltd
3.5% Hsbc Hldgs
2.62% Anexo Group Plc
2.43% British American Tobacco
2.42% Astrazeneca Plc
2.25% Intermediate Capital Group
1.91% Vodafone Group
Source: Trustnet

Sector breakdown

Financials 32.00%
Industrials 14.00%
Oil & Gas 12.00%
Consumer Goods 8.00%
Money Market 8.00%
Health Care 7.00%
Consumer Services 5.00%
Technology 5.00%
Basic Materials 4.00%
Telecommunications 2.00%

Portfolio

The fund holds 80-100 stocks from across the market cap spectrum, including AiM. Typical maximum position size is 3.5% for FTSE 100 stocks, 2% for other holdings.

Constraints

Minimum one third weighting in FTSE 100 stocks.

Key Investor Information - Income

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Key Investor Information - Accumulation

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