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Investors seek alternatives after Woodford quits Invesco
What should investors in Woodford's Invesco Perpetual income funds and Edinburgh investment trust do now?
Investors were reconsidering their holdings in Neil Woodford’s giant funds after the shock announcement that he is to leave Invesco Perpetual to start his own firm.
Citywire A-rated Woodford, manager of £26 billion of investors’ money in the Invesco Perpetual Income and High Income funds and the Edinburgh investment trust, will leave Invesco Perpetual in six months’ time.
See the full story on Woodford’s exit here.
Henley-based Invesco, which has £70 billion in funds under management, may struggle to retain investors who are expected to follow Woodford out of the funds.
The reaction from investors was already evident in the share price of the Edinburgh trust which fell 5% on Tuesday, to 572p, the steepest fall of all FTSE 250 stocks.
Financial advisers and wealth managers either said they would no longer recommend investors put their money in Woodford’s funds, or that they would wait for more details of the fund manager’s plans.
Alan Sippetts, an investment director at Heartwood, said the firm was likely to sell its small position in the Income fund as a result of the news.
'My immediate reaction is that Neil Woodford is so pivotal in running that fund that I would recycle the money immediately into our staple of preferred investments,' he said.
Sippetts’ top UK equity income picks include funds run by Majedie, Heronbridge and JO Hambro Capital Management.
‘We would expect to see some outflows given Woodford’s track record and investors are likely to follow him once he moves next year,’ said Ben Williams, investment manager at Saunderson House.
‘However, Mark Barnett employs a similar contrarian value investment approach and we would expect performance under the new manager to be fairly similar,’ added Williams of the Invesco fund manager who is to replace Woodford on both the Income and High Income funds.
See our comparison of the performance of Woodford and Barnett here.
More about this:
Look up the funds
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Look up the fund managers
More from us
- Neil Woodford to leave Invesco Perpetual
- Neil Woodford v Mark Barnett: how do their numbers compare?
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