fund
AXA Framlington UK Smaller Companies Z
A fund investing across the UK Smaller Companies universe with allocation to AiM stocks.
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204.20p
Price (Inc)
These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.
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362.40p
Price (Acc)
These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?
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0.00%
Initial chargeSome funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!
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0.75%
Annual management charge
This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).
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0.85%
Ongoing charges
This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.
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0.10%
Yield
How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…
The fund aims to provide capital growth through investment in UK smaller companies. The focus is predominantly on companies with a market value in excess of £100 million, although the portfolio will have some allocation to companies with sub £100 million market capitalisation as well as larger stocks within the smaller companies’ universe, those with capitalisation in excess of £750 million. Manager Dan Harlow focuses on quality growth companies with strong management that are able to growth their business over the longer term.
Fund summary
| Sector | UK Smaller Companies |
| Structure | UNIT TRUST |
| Launched | April, 2012 |
| Size | £197m |
| Yield | 0.10% |
| Charging basis | Income |
| Dividends paid | 30 Jun, 31 Dec |
Charges
| Standard initial charge | 0.00% |
| Initial charge via Bestinvest | 0.00% |
| Additional bid/offer spread | 0.00% |
| Annual management charge | 0.75% |
| Ongoing charges figure | 0.85% |
Allocation
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Investment process
The investable universe consists of around 1500 stocks from the FTSE Small Cap, Numis Smaller Companies, FTSE Fledgeling index and Alternative Investment Market indices with market caps of up to £1bn. The manager's strategy is to invest in quality growth companies trading on attractive valuations. The investment process combines some top-down sector analysis and identification of key investment themes, including cyclical and industry trends, economic cycle, interest rates and currency fluctuations, which are combined with bottom-up stock selection. The manager favours companies with experienced management teams able to grow their businesses over the medium-term, companies with pricing power, high barriers to entry and diverse customer base. Lowson applies a valuation overlay, screening on earnings and yield growth, dividend growth, free cash flow and return on equity factors. The portfolio will typically include between 70 and 90 companies.
Dan Harlow took over the fund in June 2016, following the manager Henry Lowson leaving the business to pursue other opportunities. Harlow’s track record of co-managing the AXA American Growth fund is less relevant in our view; whilst Montanaro UK Smaller Companies IT manager by Harlow prior to joining AXA, admittedly followed a more value orientated GARP approach. As a result, we would need to see more evidence of the manager being able to add value in the UK Smaller Companies sector.
Manager research
Average monthly relative returns
- 16/17 0.00%
- 17/18 0.78%
- 18/19 0.31%
- 19/20 0.32%
- 20/21 0.52%
Bestinvest MRI
- 3 years 0.38%
- 5 years 0.00%
- Career 0.47%
- 3 years 98.00%
- 5 years 0.00%
- Career 100.00%
Performance figures are based on the average of monthly percentage returns relative to the benchmark index.
Dan Harlow
Harlow gained a first class honours degree in History from University of Southampton. After leaving University, Harlow taught in Kenya, worked as a researcher and writer for the Footprint Malaysia Handbook and has completed some freelance writing for a small internet company. Harlo has since developed his long-standing interest in financial markets and gained a valuable insight into the industry through a period of work experience in both equity sales, at Prudential Bache Securities, and fund management, at Smith and Williamson Group. After passing the Investment Management Certificate (IMC), he was given the Growth and Income Funds to look after in January 2004. He assumed management of the Montanaro UK Smaller Companies Investment Trust in April 2006. Harlow took over the management on the AXA Framlington UK Smaller Companies on 20/06/2016.
Track record
Dan Harlow has 4.5 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.47%. During the worst period of relative performance (from June 2018 - October 2018) there was a decline of 4% relative to the index. The worst absolute loss has been 33%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is more than 99%.
Periods of worst performance
| Absolute | -33.00% (January 2020 - March 2020) |
| Relative | -4.00% (June 2018 - October 2018) |
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.
Allocation
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Top 10 holdings
Data accurate as at 31 July 2020
| 3.05% | Discoverie Group Plc |
| 2.61% | Sdl |
| 2.58% | Gear 4 Music (Hldgs) Ltd |
| 2.57% | Jtc Plc |
| 2.51% | Aptitude Software Group Plc |
| 2.37% | Ekf Diagnostics Holdings Plc |
| 2.33% | Games Workshop Group |
| 2.3% | Future Plc |
| 2.22% | Speedy Hire |
| 2.15% | Cvs Group Plc |
| Source: Trustnet |
Sector breakdown
| Industrials | 21.00% |
| Consumer Services | 19.00% |
| Technology | 15.00% |
| Consumer Goods | 14.00% |
| Health Care | 14.00% |
| Financials | 12.00% |
| Oil & Gas | 2.00% |
| Basic Materials | 1.00% |
| Money Market | 1.00% |
Portfolio
70-90 stocks.
Constraints
Individual holdings are unlikely to exceed 3% of the portfolio, although no specific restrictions apply at stock level