15th October 2013
Thousands of investors have been hit with the “terrible” news that Invesco Perpetual is losing Neil Woodford, the star manager behind the group’s hugely popular Income and High Income funds writes Philip Scott.
Woodford who has been with the business for the past 25 years is leaving the group in April next year to set up his own fund management firm.
Between the Invesco Perpetual Income and High Income portfolios he is is responsible for some £25bn’s worth of investor cash and has long been lauded for his consistent and stellar performance.
Patrick Connolly, certified financial planner, Chase de Vere, says: “This is terrible news for Invesco Perpetual and will be a cause for concern for many investors who trust their investments and pensions with Neil Woodford.”
According to fund analyst FE Analytics, Woodford has amassed a 194% cumulative return for his investors over the past decade – some 84% ahead of the average.
Following Woodford’s departure, his colleague Mark Barnett will take over the two funds.
Advisers recommend those with existing holdings should review how much they currently have with Woodford and if necessary look to diversify into other funds.
Connolly adds: “It will be impossible for Invesco Perpetual to replace Woodford with somebody of similar standing because, particularly in the world of UK equity income funds, there is nobody of similar standing.
“However, there is no reason for investors to panic. Woodford is still running the same investment funds today as he did yesterday and this will continue until next April. We would advise investors not to invest new money in Woodford’s funds.”
Darius McDermott, managing director of fund broker Chelsea Financial Services comments: “This is probably the biggest news we’ve ever had in asset management and comes as a bit of a shock. It has huge implications for Invesco Perpetual as Neil currently runs just under half of the £71.8bn assets managed from the Henley Investment Centre.
“The two equity income funds have been the core of many investors’ portfolios for years now and it will be a huge blow to thousands of investors that Neil is leaving. If as rumoured, Neil’s intention is to start a new asset management business, I imagine it will generate an incredible amount of interest – not to mention assets – from launch.”
Suggested alternatives to Woodford’s funds from Connolly and McDermott include Artemis Income, Threadneedle UK Equity Income and Rathbone Income.