HL recommends Axa Framlington small-cap switch

Hargreaves Lansdown has advised investors in yet another small-cap fund to switch to Standard Life Investments, with Axa Framlington UK Smaller Companies the latest in its targets.

Meera Patel, a senior analyst at the adviser, says Chris St John took over the Axa Framlington fund in March 2008, reorganising the portfolio in an attempt to improve ailing performance.

“The fund has lagged further behind its peers”

“This has had little impact and the fund has lagged further behind its peers,” she adds.

“The vehicle has a focus on industrial and technology sectors, which have performed well since St John took over, but he has failed to capture gains. Our analysis shows that the primary cause of these disappointing returns is poor stock selection.”

Patel says the manager has now had sufficient time to demonstrate his ability, and sees see no significant reason why the stock selection within the portfolio will improve. (article continues below)

Once again, she counsels a move to the Standard Life Investments UK Smaller Companies fund, the best UK small-cap offering over five years.

Hargreaves notes the stock picking talent of manager Harry Nimmo, who looks for companies with proven business models and recurring revenues.