AXA Framlington Biotech Fund aims to offer long-term capital appreciation by investing in companies involved in biotechnology, genomic and medical research globally. But, given that most of these companies tend to be in the US, the fund's geographical breakdown is concentrated here with close to 84 per cent of its assets. The rest of the fund's holdings are spread between the UK and Israel with smaller allocations to the rest of Europe.
Gemma Game has managed the fund, along with the Axa Framlington Health Fund, since 2010, having joined the group from BlackRock, where she was a portfolio manager on the global equities team responsible for the healthcare sector. Ms Game graduated from Cambridge University in 2001 where she read Pharmacology.
Ms Game reports that the biotech sector has enjoyed strong performance relative to broader equity markets, which is reflected in the fund's short-term performance. She expects the sector to maintain momentum supported by strong financials, positive clinical data and merger and acquisition activity.
The fund's performance has tended to lag its benchmark index, the Nasdaq Biotech, over the long term, posting third-quartile performance over five years. But it is still one of the better performers within the IMA specialist sector, placed within the top 20 funds in a sector that has over 100 funds.
Caveats are the fund's high total expense ratio - 1.85 per cent - and its high level of concentration. On top of the US bias, almost 50 per cent of the fund's assets are held in its top 10 holdings. While some might back the manager's high-conviction strategy given that biotech companies tend to be high-risk, high-reward plays, this is not a fund for widows and orphans.
| AXA FRAMLINGTON BIOTECH ACC (FRBIOA) | |||
|---|---|---|---|
| PRICE | 50.94p | SHARPE RATIO | 0.25 |
| SIZE OF FUND | £35.5m | 1 YEAR PERFORMANCE | 31.57% |
| No OF HOLDINGS | 63 | 3 YEAR PERFORMANCE | 49.26% |
| SET UP DATE | 31-Dec-01 | 5 YEAR PERFORMANCE | 48.69% |
| MANAGER START DATE | 18-Jun-10 | TOTAL EXPENSE RATIO | 1.85%* |
| BETA | 0.4 | YIELD | n/a |
| VOLATILITY | 1.91 | MINIMUM INVESTMENT | £1,000 initial, £50 monthly investment |
| TRACKING ERROR | 2.1 | MORE DETAILS | axaframlington.com |
Source: Investors Chronicle Funds Data, Axa Framlington, *Morningstar
Performance figures as at 8 July 2011
Top 10 holdings (as at 31 May 2011)
| Holding | Percentage |
|---|---|
| Amgen Inc | 7.0 |
| Celgene Corp | 6.9 |
| Alexion Pharmaceuticals | 6.2 |
| Teva Pharmaceutical Ind. ADR | 5.1 |
| Vertex Pharmaceuticals Inc COM | 5.0 |
| Pharmasset INC | 4.3 |
| Shire LTD ORD GBP 0.05 | 4.3 |
| Illumina | 4.1 |
| Gilead Sciences | 3.8 |
| Regeneron Pharma | 3.3 |
Sector Breakdown
| Sector | Percentage |
|---|---|
| Biotech Product | 67.04 |
| Speciality Pharma | 15.76 |
| Enabling Technology/Tools | 8.55 |
| Devices | 2.31 |
| Drug Delivery | 1.67 |
| Healthcare Services | 1.22 |
| Cash | 3.45 |
