Royal London has moved a large pension mandate from Invesco Perpetual to Fidelity following the departure of Neil Woodford.
‘The fund manager has left Invesco Perpetual and our investment advisory committee (IAC) has concerns around the new manager’s process and ability to deliver outperformance given the large amount of assets the fund currently holds,’ stated Royal London.
‘After extensive analysis into all the alternative solutions available, the IAC has decided it is appropriate to replace the underlying investment with the Fidelity MoneyBuilder Dividend fund.’
Fidelity MoneyBuilder Dividend is managed by Citywire AA-rated Michael Clark (pictured), and Royal London noted its ‘strong performance track record whilst maintaining very similar characteristics to the Invesco Perpetual Income fund’.
In Citywire’s 99-strong UK Equity Income sector, Fidelity MoneyBuilder Dividend and Invesco Perpetual Income are tied in fourth place for their Sharpe ratio over the past three years.
Fidelity MoneyBuilder Dividend has a slightly better maximum drawdown for the period, though, of 5.2% compared with Invesco Perpetual Income’s 6.1%. Both are top decile in the peer group.
On a total return basis, Fidelity MoneyBuilder Dividend has generated 49.9% through the three years compared with Invesco Perpetual Income’s 47.9%.
‘Royal London’s decision to add Michael Clark’s fund is further endorsement of the strength of our UK equity income franchise,’ said Ben Waterhouse, head of UK retail sales at Fidelity Worldwide Investment.
Royal London’s move follows one by Citibank earlier this year, which handed a pension mandate from Invesco Perpetual High Income to Citywire A-rated Derek Stuart’s Artemis UK Special Situations fund, citing similar concerns about Barnett’s ability to assume Woodford’s mantle.