Axa to consolidate its multi-manager funds

Axa Investment Managers is to consolidate its range of nine multi-manager funds into five Ucits III-compliant Oeics. The new funds will adopt a hybrid of manager of managers and fund of funds approaches.

The group currently provides a range of four MultiManager and four Select funds as well as the fettered Axa Balanced fund of funds.

The MultiManager range of unit trusts was launched in July 2000 followed by the Select range of Oeics in November 2001, both as unfettered funds of funds. Two of the Select funds (Income and Growth) changed to a core/satellite hybrid investment style in August 2004. These portfolios use a manager of managers portion making up the core holdings and a number of satellite funds add flexibility.

As a result of the restructuring including a number of fund mergers, Axa plans eventually to adopt this hybrid approach for all five funds, with the new MultiManager Income and MultiManager Growth portfolios using it from the start. The other funds will follow once they reach critical mass. The funds may also invest in other asset classes, including property.

Axa director of UK multi-manager investment Robert Wilson says: “This hybrid of styles means we can take advantage of the strong points of both the manager of managers and fund of funds approaches.”

Wilson (pictured) argues that the lower institutional levels of fees, control of the investment mandate and transparency of underlying assets are advantages within a manager of managers approach. The fund of funds element opens up the universe of portfolio management styles and range of skills from different asset houses.

“It makes sense to combine funds under new Ucits III rules. Because of the existing client base and vast distribution on the life side it is important to offer a range of funds that suit our clients,” he says.

The new Axa MultiManager fund range will include Balanced, Cautious Income, Dynamic, Income, and Growth funds. Axa’s multi-manager team of 11 investment professionals, headed by Simon Ellis, will run the portfolios. The fund mergers are expected from the end of July and are subject to unitholder approval.