Woodford Investment Management  

New Woodford fund tops charts for March

New Woodford fund tops charts for March

Fund manager Neil Woodford’s most recent offering was most popular fund last month as investors scrambled to access the star manager’s income offering.

The recently launched £58.5m CF Woodford Income Focus fund was the most popular fund in March, followed by Woodford’s £9.9bn CF Woodford Equity Income fund, which had been the most traded in February, according to The Share Centre.

Andy Parsons, head of investments at The Share Centre, said Woodford’s Income Focus fund in top spot was “unsurprising” due to the publicity around its launch last month and specific investment focus on income, with a “tried and true” manager at the helm.

“For the first time in years, Neil Woodford has been knocked off the top spot by, well himself actually.”

In February the Equity Income fund, which launched in June 2014, was the top traded fund as a result of being sold more times that it was purchased over a monthly period, potentially as investors sold out in preparation of the Income Focus launch, according to Mr Parsons.

Gavin Haynes, managing director at Whitechurch Securities, said that he was not surprised about the new Woodford fund’s popularity as it can act as a “complement” to the existing fund.

“It is a more defensive version of the flagship Equity Income and the attractive yield as well as potential for ‘modest income growth’ make it an attractive proposition if the dividend growth can be achieved,” Mr Haynes said.

Adrian Lowcock, investment director at Architas, said that the fund’s popularity makes sense as it offers investors a combination of high yield with an experienced fund manager.

“Woodford’s ability to attract investors remains strong and his long term track record is impressive, even though last year was tougher.  Woodford also offers what many managers fail to communicate a clear robust process which doesn’t deviate with market trends. He is very consistent,” Mr Lowcock said.

But Ben Yearsley, director of Shore Financial Planning, said while the Woodford name tends to attract money “like bees to a honeypot”, but warned investors that once the small cap names are stripped out of the new fund, there will likely be significant overlap with the previous Woodford fund.

“I wonder how many of those investors realise there will likely be lots of cross over with the existing fund, which no doubt they will already own. Absolutely nothing against the new fund, but you don't need it if you already own the existing Woodford equity income fund,” Mr Yearsley said.

Ryan Hughes, head of fund selection at AJ Bell, said that the Income Focus fund was also one of the top ten most popular funds on AJ Bell’s platform as well, but cautioned investors about overexposure to one investment strategy or manager.

“There is likely to be a high degree of overlap in the stocks that are owned in both Equity Income and Income Focus and therefore investors may unwittingly be increasing their risk rather than reducing it by investing in the new fund if they already own the Equity Income fund,” Mr Hughes said.