Skandia is to close its versions of the Invesco Perpetual Income and High Income funds and move investors into a new mandate managed by Neil Woodford.
The mandates, which had £640 million of assets, were in Skandia's life fund range and run as mirror versions of the Invesco Perpetual retail funds. The switch will take place on October 9.
Skandia said in a statement: 'The Skandia Invesco Perpetual income funds were previously managed by Neil Woodford. Following the launch of the Woodford Investment Management Equity Income fund we have decided to transfer assets from the Skandia Invesco Perpetual funds into the OMW Old Mutual Woodford Investment Management fund so that investors continue to benefit from the proven investment expertise of Neil Woodford.'
Rivals Hargreaves Lansdown has waded in, questioning whether the move constitutes a discretionary decision. Senior analyst Laith Khalaf said: ‘We suspect Skandia will be the first in a line of life companies who switch Invesco Perpetual investors into Woodford’s new fund. This is still a pretty bold move. Life companies do close funds from time to time because of lack of investor interest, but to switch from one manager to another in this way is a highly discretionary call.
‘On one level the switch does make some sense- most savers will have invested to get access to Woodford in the first place. However closing the Invesco funds down leaves no option for those investors who are happy with the job Mark Barnett has done and who want to stick with him.’
But Skandia refuted Hargreaves' comments, pointing out that investors wishing to stick with Barnett can do so by switching into the Skandia Invesco Perpetual Strategic Income fund, which he runs for the firm, ahead of the transfer.