Neil Woodford’s struggles have continued, with yet another significant fund buyer selling out of his £8.2bn Woodford Equity Income fund.
Nathan Seeney, multi-asset manager at Architas has exclusively revealed to FTAdviser why he has sold out of the fund.
Architas confirmed this afternoon (29 November) that its £900m range of multi-asset funds sold all of its £25m holding in the fund in September.
FTAdviser reported in September that Architas had reduced its holding in the fund, and was assessing whether to continue to hold it given its recent underperformance.
The fund has returned 0.4 per cent over the past year to 29 November, compared to a return of 12 per cent for the average fund in the IA UK Equity Income sector in the same time period. This ranks the fund the absolute worst performer in the sector.
This year has been marked by a series of set backs for the fund manager, with large holdings such as Provident Financial and Astra Zeneca suffering stark share price reversals
In addition, Mr Woodford’s view that the UK economy will perform better than the current consensus forecasts, has seen him heavily exposed to bank and property shares.
The Woodford Equity Income fund has shrunk from more than £10bn to £8.2bn over the past year.
The decision of Architas to withdraw its capital follows in the wake of Jupiter and Aviva both pulling their capital from the fund.
Mr Sweeney said while short-term performance has marred the fund, concerns about the longer term cemented his decision to pull out of Mr Woodford's flagship investment.
“We have taken the decision to remove the CF Woodford UK Equity Income fund from the Architas MA Active fund range.
"Woodford has clearly had a tough period and faced some stock specific headwinds. But short term performance issues are not a reason on its own for us to remove a fund from portfolios and overall we still like and rate both the manager and the fund.
“There are two main reasons for our decision.
"First, we have been reducing our exposure to UK equities in our active portfolios so have concentrated our holdings in fewer funds.
"And second we have chosen to focus on those managers we believe will offer more flexibility in what we expect to be a choppy environment where those companies that are perceived as weak, failing to deliver or transition are being marked down heavily by the market.
"We are therefore looking for active managers that have more flexibility to both take advantage of opportunities and also limit their losses.”
David.Thorpe@ft.com
