Axa Framlington has re-opened George Luckraft’s £1 billion Equity Income fund to new investors. The firm re-introduced initial commission on the portfolio this week, after stopping the payments in March 2005 to discourage inflows.
Robert Bailey, the firm’s UK sales director, says the decision to re-open was taken for a number of reasons. He says: “We have discussed when to re-open the fund with George throughout the whole process. Ultimately, the decision is George’s and he is more than happy to do this.”
Bailey says a greater focus on promoting Luckraft’s Monthly Income fund has taken some of the pressure away from Equity Income. The monthly fund has grown from £108m at the end of March 2005, to more than £730m.
Bailey also points to stronger competition within the UK Equity Income sector as a whole. According to Morningstar, there are 14 equity income portfolios with assets in excess of £1 billion. The list is headed by Neil Woodford’s £8.8 billion Invesco Perpetual High Income and £6 billion Income funds.
Luckraft’s track record on the Axa funds is impressive. Data from Morningstar shows that both funds were ranked first quartile from September 2, 2002 to June 25, 2007.
The portfolios have struggled over the past 12 months with fourth-quartile rankings, but new investors will undoubtedly be attracted into Equity Income by Luckraft’s long-term figures.
Bailey says the firm will take a lower profile approach to marketing the fund. “We will not advertise the fund as widely as before. You will not see the big poster campaigns we ran two years ago,” he adds.