Mr Lowcock said the income yield on Invesco’s high income fund “struggled to live up to its name”, and argued on many occasions was actually lower than the income fund, adding the new fund would need to honour the high income name and the fund objectives.
Ben Seager-Scott, director of investment strategy at Tilney Bestinvest, said he thought this was an “understandable move” for Woodford, particularly with the search for income being a major theme in the era of ultra-low interest rates.
“With no end in sight there’s every reason to think demand will remain strong for these kind of products,” he said, adding the income and high income strategies proved a successful strategy at Mr Woodford’s “old shop”.
“One thing to bear in mind when you’re investing for income is that, in some ways, you’re constraining your manager by requiring an income, whereas in a go-anywhere UK equity fund the manager can look for returns from any part of the market.
“There’s also the well-known issue of dividends being relatively concentrated in the UK, presumably one reason Woodford IM are specifically looking to be able to hunt overseas.
Despite saying he holds Mr Woodford in very high regard, Mr Seager-Scott said it would depend on the details as to whether he would buy the fund.
Darius McDermott managing director of Chelsea Financial Services, said the fund would be a “natural extension” to his existing products, and will mean he is “freed from the overseas restriction”, giving him greater flexibility.
“I think this is demand-driven; it’s likely some of the investors wanted access to Neil’s expertise investing in large cap companies, without the unquoted growth stocks.”
katherine.denham@ft.com
