Axa's Peirson buys Burberry after share price fall

20 July 2012 | By Gary Jackson

Richard Peirson has introduced Burberry to the Axa Framlington Managed Balanced fund to capitalise on the fashion house’s continued expansion.

Peirson added the luxury fashion brand to his £375.8m portfolio on the back of share price weakness in June. Burberry shares hit 1,586p in April but fell to 1,298p by mid-June.

In the fund’s factsheet to the end of June, the manager says: “This iconic luxury consumer brand has significant growth opportunities, particularly in emerging economies such as China.

“Growth should come from both an expansion of retail outlets and from their digital platforms.”

He adds that Burberry’s shares are attractively valued when compared with those of other luxury goods companies, despite being expensive against the overall equity market.

Burberry shares continued to fall this month, dropping to 1,158p on July 12 after the group’s first-quarter sales growth came in below analyst estimates. Sales grew 11 per cent to £408m, while the market was expecting them to exceed £415m.

The stock has since risen as the group placed pressure on fragrance partner Interparfums to offer it a new license agreement with more favourable terms.

The Axa Framlington Managed Balanced fund is ranked first quartile over one, three and five years as well as shorter timeframes. Peirson has managed the portfolio since 1994.

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