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AXA Framlington Monthly Income and Equity Income - fund merger

Heather Ferguson | Fri 24 April 2015

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.

The AXA Framlington Equity Income Fund will be merged into the AXA Framlington Monthly Income Fund with effect from 25 April 2015. George Luckraft has managed both funds since September 2002 and will continue to manage the consolidated fund.

With new pension freedoms, and interest rates at historic lows, investors are increasingly demanding more frequent income from their investments. The two funds have a large degree of overlap in terms of investment focus and strategy. As such, the manager feels the AXA Framlington Monthly Income Fund, which pays a monthly income, is a more attractive alternative to the Equity Income Fund which distributes income twice a year. In addition, as both funds are relatively small, AXA anticipates the merger leading to greater economies of scale and lower charges.

Whereas many UK Equity Income managers focus on large, high-yielding companies, George Luckraft tends to invest significantly in smaller companies. Over the past five years, both the Equity Income and Monthly Income Funds have had around two thirds invested in small and medium-sized companies. This weighting to higher-risk small and medium-sized firms has positively impacted returns when this area has performed well but when these companies suffer, as they have done since September 2014, the fund has struggled.

Our view on the manager

George Luckraft's long-term track record is uninspiring. Since he assumed responsibility for the funds in September 2002, they have both underperformed the FTSE All Share Index and the peer group. Our analysis suggests the manager's stock selection has been disappointing for a number of years. We would like to see a significant improvement in performance, driven by stock selection, before considering the AXA Framlington Monthly Income Fund for inclusion on the Wealth 150 list of our favourite funds across the major sectors. Please note this should not be taken as a signal to make any changes to a portfolio, providing it continues to meet its objectives.

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Please note the fund’s charges can be taken from capital, which can increase the yield but reduce the potential for capital growth

Find out more about this fund including how to invest

Please read the key features/key investor information document in addition to the information above.

The value of investments can go down as well as up, this means you could get back less than you invested. Therefore all investments should be regarded with a long term view. No news or research item is a personal recommendation to deal. If you are unsure about the suitability of an investment please contact us for advice.
Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.


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