AXA WF UK Equity: September 2025 fund update

• The fund has been managed by Chris St John since its launch in 2016

• The fund tends to invest more in small and medium-sized companies than lots of peers in the IA UK All Companies sector

• The fund hasn’t performed as well as the FTSE All Share index

• This fund does not feature on our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The AXA WF UK Equity fund aims to grow an investment by investing in UK companies of all sizes. It has more in higher-risk small and medium-sized companies than some peers, so could work well alongside funds focused on more established, larger companies. The manager's focus on high-quality companies means it could also sit well alongside value funds that invest in companies believed to be overlooked and undervalued.

Manager

Chris St John is lead manager of this fund. He joined AXA Investment Managers in 2005 and has lots of experience managing funds focused on small and medium-sized UK companies. The AXA WF UK Equity fund launched in 2016 and gives the manager freedom to invest in UK companies of any size.

He’s supported in managing the fund by Nigel Yates. Yates began his career as a financial analyst at NFU Mutual and spent 20 years with the business, progressing to fund manager over that period. He joined AXA in 2021 as a UK portfolio manager.

St John and Yates are supported by the rest of AXA's UK Equities investment team and can also draw on the specialist knowledge of other fund managers from across the business where necessary.

Process

The manager looks for themes that are likely to drive stock market growth over the long term and thinks about how they could change consumer behaviour. Then he identifies companies likely to benefit as those themes develop over time.

St John and his team aim to invest in companies with specific characteristics, including high barriers to entry for competitors, the ability to raise prices without impacting demand for their products or services, and an experienced senior management team. They think the calibre of management teams is particularly important within small and medium-sized businesses because they can have a greater influence on the company's overall success.

Meeting those managers is a critical part of the team’s investment process. First-hand information and insight allows St John to test the quality of the company’s leadership, scrutinise their business model and evaluate the management team’s strategy to grow the business.

Over the last year, the manager has made some changes to the fund. The amount invested in companies listed in the FTSE 100 (the largest 100 companies listed in the UK) has increased with the manager finding more opportunities here, with investments in companies listed on the AIM market, typically smaller companies, coming down.

St John has added kitchen supplier Howden Joinery and defence business Babcock to the fund.

Culture

The company was formed in the 19th century, with the name AXA introduced in 1985. AXA bought specialist investment manager Framlington in 2005. AXA's investment culture is based on proactivity and collaboration, with research shared across AXA's equity investment teams. Chris St John is a well-incentivised fund manager who has remained loyal to AXA for a number of years and we think he's dedicated to the UK Equity team.

Please note the AXA WF UK Equity fund is an offshore fund so investors are not normally protected by the UK Financial Services Compensation Scheme.

ESG Integration

At AXA, ESG specialists are split between a central team and the various investment teams. The firm’s internal research, analysis and rating database provides ESG information on thousands of companies. The system considers the ratings awarded by a variety of different providers, with the aim to arrive at a more balanced view. The scores can be challenged by portfolio managers and amendments will be considered by the ESG Monitoring and Engagement Committee following a period of analysis and discussion.

White phosphorus-based weapons, those involved in the worst controversies, those with particularly low ESG scores and violators of the UN Global Compact are excluded from AXA’s range of funds that actively promote ESG characteristics. Companies involved in controversial weapons, tobacco, palm oil (those that haven’t achieved ‘sustainable palm oil’ status), soft commodities, coal, unconventional oil & gas and those that have a significant impact on biodiversity are excluded from all AXA IM funds. These firm level exclusions mean that Glencore and tobacco companies are not available for the manager to invest in.

The firm provides a good level of transparency on its voting and engagement work, which includes an annual Stewardship report, and frequent responsible investment-related articles.

This fund is not run to a sustainable mandate.

Cost

The fund has an annual ongoing fund charge of 0.76%, but through Hargreaves Lansdown you can secure an ongoing saving of 0.18%, which means investors pay a net on-going charge of 0.68%. Our platform charge of up to 0.45% per annum also applies, except in the HL Junior ISA, where no platform charge applies.

Performance

Since the fund’s launch in 2016, it hasn’t performed as well as the broader UK stock market. Over this timeframe the fund has delivered returns of 59.19%*, lagging behind the 109.34% return from the FTSE All Share index.

While the fund performed well for several years after its launch, the last few years have been difficult. It tends to invest more than the FTSE All Share index in medium and smaller-sized companies, which haven’t performed as well as larger companies in recent years. The fund’s growth bias has also posed a headwind as the value style of investing has held up better.

Over the last year, the fund has delivered returns of -0.05%, lagging behind the 12.58% return from the FTSE All Share index.

Our analysis suggests that the fund’s investments in technology related businesses and companies sensitive to the economic cycle have posed headwinds to performance. At a stock level, its investments in media business Future, building materials manufacturer Marshalls and identity technology company GB Group have been the largest detractors from performance. On the other hand, some of the fund’s investments have performed well. Telecomms business Currys, financial solutions provider Alpha Group and copper mining business Antofagasta all contributed to the fund’s performance.

Our analysis suggests that, for several years, the manager hasn’t consistently added value through stock selection. This is a key factor we analyse when assessing a fund manager, and represents their ability to pick strongly performing companies regardless of what size or sector they’re in. Because of this, and the fact we currently have a higher level of conviction in other funds in the UK sector, this fund doesn’t currently feature on the Wealth Shortlist.