Investments  

Investors rush to Woodford trust after Schroders deal

Investors rush to Woodford trust after Schroders deal

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.