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Investors pull £625m a month from Invesco

Investors pull £625m a month from Invesco

Investors withdrew £7.5bn from the open-ended funds managed by Invesco in the year to the end of August, according to data from Morningstar.

The figure equates to an average of £625m per month for the past 12 months, with £929m being withdrawn in the month of August alone.

In total £1.7bn was withdrawn from UK open-ended funds in August 2019, meaning Invesco was responsible for half of the net outflow across the whole market. 

The Morningstar data contained better news for Schroders however.

The firm had net inflows of £121m in August. This was the first month in a year that Schroders had investors putting more cash in than they withdrew, and it was Schroders' best month for inflows since late 2017. 

Chart 1: Total flows by firm 

Total Estimated Net Flows£millions  
    
Fund GroupsAugust 191 yearAsset £bn
BlackRock9221,604£125
Aviva4955,08059
LGIM1091,41246
Invesco-929-7,51046
Royal London274575943
Fidelity861,57040
Baillie Gifford2692,74837
M&G-182-11,36935
Schroders121-3,26734
BNY Mellon-193-498230

Source: Morningstar

Over the past year Invesco had outflows of £7.5bn, with its Total Return fund contributing £1.9bn towards this, while its Income and High Income funds also suffered large outflows.

An representative of Invesco said: “The net flow picture improved in the second quarter versus the prior quarter across both our active and passive capabilities, while sales levels remained generally strong for the firm. 

"Invesco continued to see strength in its ETF capabilities, reflecting evolving demand as clients react to uncertainty in the market environment.

"We anticipate demand for active capabilities will return once these global issues are resolved and markets normalise. 

"In addition, we expect renewed traction in our active strategies with the redomiciling of the local Oppenheimer capabilities and the launch of our Model Portfolio Service.”

Mark Barnett’s Income and High Income funds, which were once managed by Neil Woodford prior to his departure to set up his own firm in 2014, have lost at least £7.5bn of assets as a result of outflows over the past three years.

The funds have struggled in performance terms as well with the Income fund, which has now shrunk to £2.71bn, losing 5 per cent over the past three years, compared with a return of 20 per cent for the average fund in the sector in the same time period.  

The High Income fund has shrunk in size to £6bn, having been £10bn when Mr Woodford departed, and has lost 4 per cent over the past three years in performance terms. 

Darius McDermott, managing director at Chelsea Financial Services, said: “The UK equities team at Invesco have always been a bit contrarian and used the value style of investing, and that is a style that has been out of favour for a while in the wider market.

"I also think the funds run by Mark Barnett have suffered a little bit of a contagion from the suspension of the Woodford Equity Income fund, as there are quite a few holdings that both managers have.”

Many of the poorly performing investments that have blighted the performance of Mr Woodford's funds over the past year, such as Provident Financial and Burford Capital, were also held in the funds run by Mr Barnett.