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Neil Woodford’s flagship Income fund hits £10bn

Neil Woodford’s flagship Income fund hits £10bn

Neil Woodford’s flagship income fund has heralded the launch of his new focused mandate by hitting the £10 billion mark.

Wealth Manager has learnt the CF Woodford Equity Income fund, which raised a record £1.6 billion at its launch in June 2014, broke the £10 billion barrier late on Friday.

The fund has been one of the best-selling funds in the UK since launch as Woodford brought the impressive track record he established at his previous employers, Invesco Perpetual, to the fund.  Since launch it sits in the top quartile of its peer group, returning 35% versus the 23% gain in the peer group.

This is despite a relatively disappointing 2016 for Woodford as his zero weighting in oil and gas hit performance, with the fund returning just 3.2% in 2016, well below the 16.8% rise in the FTSE All Share.

Woodford admitted 2016 had ‘tested his resolve’ – and that of clients too.

Yet this did not stop investors keeping faith in Woodford, who built his reputation by refusing to invest in technology stocks during the dotcom bubble.

According to the annual Pridham fund sales report, Woodford’s eponymous investment firm was the sixth biggest selling asset manager in 2016, attracting net inflows of just over £1 billion.

The £10 billion landmark came on the eve of the launch of the Woodford Income Focus fund - the third fund in his business' stable.

The new fund, which yields around 1% more than the existing fund at 5%, will contain around 50 stocks.

Anticipation has been growing on the make-up of the fund, with Woodford indicating in a launch event last month he may even return to the banking sector for his new vehicle.  He also outlined why Brexit had made him more bullish. 

It is believed the fund will contain approximately 20 holdings which do not feature in his other funds.

The Income Focus fund also has the flexibility to invest internationally, although it’s expected to be predominantly focused on UK companies at launch.

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87/87 in Equity - UK Equity Income (Performance over 3 years) Average Total Return: -1.43%
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