Axa to merge four funds into two

Axa Framlington plans to amalgamate four funds into two at the end of May, subject to unitholder approval.

Blue Chip will be merged into UK Growth to create a fund with more than 100m in assets. Meanwhile, the 55m NetNet and 20m Nasdaq funds, both managed by Nick Evans, will become Global Technology. Evans, who joined the firm in 2000, will run the combined portfolio.

Robert Kyprianou, chief executive officer, says of the two technology-related funds: “Nick feels the funds are currently somewhat specific and constrained. It is about creating a global roaming technology product. We are convinced it is the right thing to do.”

Following the amalgamation, NetNet investors will see a reduction in the annual management charge from 1.75% to 1.5%.

NetNet was launched in May 1999, in response to demand for internet-related products. According to data from Axa, the fund suffered dramatically when the technology bubble burst in 2000. The fund fell by 27.6% over one year to the end of March 2002 and by 40.8% to March 2003.

Nasdaq fared slightly better in the same period but still posted negative returns. Kyprianou (pictured) denies performance prompted the merger and points to recent strong returns from both portfolios.

Blue Chip and UK Growth, run by Chris Murphy until his recent departure to Morley, are temporarily being managed by Nigel Thomas. The funds have similar investment objectives. “This was on the cards before Chris left us,” says Kyprianou. “Having two funds in the same space doesn’t make sense.”

Kyprianou aims to recruit a permanent replacement for Murphy “by the summer” and says that candidates are coming forward. “We are now in the market for a large-cap growth manager and we have already received some CVs,” he says. “It is early in the process but we are confident the Framlington franchise will be supportive to finding a high-quality candidate.”

In a separate move, the management of the Gilt and Pan European Bond funds, run by Richard Peirson and Chris Armstrong respectively, will be delegated to Axa Investment Managers. The portfolios will be run by the 10-strong fixed income team, led by Denis Gould.