The Woodford Patient Capital Trust rocketed to one of the most bought trusts in October following the announcement that Schroders would take over the fund.
According to data from Interactive Investor, published yesterday (November 5), the trust made a late entry into the top 10 most bought trusts on its direct to consumer platform in October, reaching third place following the Schroders news despite experiencing more sells than buys for the majority of the month.
The consumer platform stated the trust saw more sells than buys for most of the month but a late surge propelled it to third place on the list in what was a “rollercoaster month for the trust”.
This was backed up by the trust’s share price which rose 25 per cent (from 32p per share to 37p per share) on October 24, the day of the announcement.
The share price of a trust is likely to go up if more investors are interested in the shares as it means there is a better secondary market for the product. If there is more demand for the shares, those selling them can raise the price.
Moira O'Neill, head of personal finance at Interactive Investor, said: “This was clearly a late surge, since for much of the month investor views were split.
“With the announcement that the trust is due to be taken over by Schroders, it looks like discount opportunists made a quick swoop, clearly hoping that new management will put it back on track and view the recent underperformance and widening in discount as a good buying opportunity.”
Paul Gibson, financial planner at Granite, agreed, adding the change to Schroders would give investors a sense of stability while speculators might feel the large discount would narrow.
He thought active fund management would always have its followers, however, noting there used to be some that thought Mr Woodford was a “good bet”.
Overall the big name fund managers dominated throughout the month.
The popularity of Fundsmith, Lindsell Train and Vanguard showed no signs of waning as only two of the top 10 funds — Fidelity Global Technology and Legal & General International Index — were not managed by the three dominant asset managers.
| Rank | Funds | Investment trusts |
| 1 | Fundsmith Equity | Scottish Mortgage |
| 2 | Lindsell Train Global Equity | Finsbury Growth & Income |
| 3 | Vanguard LifeStrategy 80% Equity | Woodford Patient Capital |
| 4 | Vanguard LifeStrategy 60% Equity | City of London |
| 5 | Lindsell Train UK Equity | The Renewables Infrastructure Group |
| 6 | Vanguard LifeStrategy 100% Equity | Smithson |
| 7 | Vanguard FTSE Developed World ex UK | Allianz Technology |
| 8 | Vanguard US Equity Index | Henderson Far East Income |
| 9 | Fidelity Global Technology | F&C Investment Trust |
| 10 | Legal & General International Index Trust | BlackRock Throgmorton |
Source: Interactive Investor
Ms O’Neill added: “The bestselling funds and investment trusts will come as little surprise for those in investment circles - Fundsmith and Lindsell Train have been a tough act to follow, although Vanguard are unlikely to be complaining, hogging five of the top ten places.
“It is unlikely to be solely performance that investors are exclusively chasing – these are managers with clear strategies who stick to their knitting.”
It was the same in the Sipp space as yesterday Interactive Investor data showed well-known funds were most popular among self-invested personal pension investors using the platform, with Fundsmith being the frontrunner.
October’s top funds also provided further evidence that active management has taken a hit in recent months, with six of the 10 top spots filled with passive strategies.
Just yesterday a report showed the mounting cost pressures on advisers coupled with a lack of faith in active management had helped fuel the rise in popularity of passive funds.
The investment trust sector saw buyers backing sticking with big names as Baillie Gifford’s Scottish Mortgage Trust, the largest in the UK market, secured the top spot.
This was despite a blip in performance which has seen its share price fall 10 per cent since the start of August and its NAV discount widen. The trust has since responded to this by buying back millions of pounds worth of shares.
Finsbury Growth & Income, the second best selling trust, is co-managed by Nick Train, also co-manager of the Lindsell Train Global Equity fund.
Interactive Investor acquired adviser platform Alliance Trust Savings from Alliance Trust earlier this year but last week it was announced Embark is to take over the adviser platform.
ATS' direct to consumer customers will stay with Interactive Investor.
imogen.tew@ft.com
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