Barnett to Run Woodford's Edinburgh Trust

The board of Edinburgh Investment Trust has confirmed that from today Mark Barnett of Invesco Perpetual will take over from Neil Woodford as fund manager

Emma Wall 28 January, 2014 | 2:58PM
Facebook Twitter LinkedIn

Thousands of investors in the Edinburgh Investment Trust (EDIN) at last have clarity over the future of the closed-end fund's management.

Star equity income fund manager Neil Woodford announced he was leaving Invesco Perpetual in October and giving up both the Edinburgh Trust and his two open-end funds. Today the Edinburgh board confirmed Invesco would continue to run the trust, and it would be managed by Mark Barnett.

Although Woodford is not leaving Invesco until the end of April, Barnett will take over management of Edinburgh from today.

Morningstar analysts say that the Edinburgh Trust will remain Under Review until the team has a chance to meet with Barnett after the appointment. 

Closed-end fund analyst Jackie Beard says the appointment is good news for existing Edinburgh investors.

"The decision to retain Invesco will mean that investors are not subjected to transfer costs or exit fees. The board has also announced a reduction in the annual fee to 0.55% and the performance fee, which is great news," she said.

"Barnett is a good manager with a proven track-record and he has learned a lot working alongside Woodford for the past 13 years."

During Woodford's five-year tenure EDIN grew 60%. Barnett has a similarly impressive track-record, albeit with much smaller funds. He manages two other UK equity trusts; Perpetual Income & Growth (PLI) and Keystone Investment Trust (KIT)

The similarity between the trusts has lead to predictions the three trusts will be merged. 

"Barnett's appointment is very positive development for Edinburgh Investment Trust and for the sector as a whole," said John Newlands of stock broker Brewin Dolphin.

"It also raises the intriguing possibility of a new merged 'super-trust’, though it may be a considerable challenge to establish which trust and which Board might emerge victorious."

There are some concerns regarding Barnett's workload from May 1, when he will take over the management of Woodford's two open-end funds, which equate to around £20 billion under management. 

"Barnett will be taking over Woodford’s funds in May 2014, and that brings some uncertainty: namely, the likely management of redemptions at those funds, reduced resources in the UK equity team and the loss of Woodford’s macro views among them," said Beard.

"Nonetheless, Barnett is a seasoned investor who has demonstrated his own success."

When Woodford announced his departure, his open-end funds Invesco Perpetual Income and Invesco Perpetual High Income saw considerable outflows as investors panicked about his successor being able to match Woodford's past performance. The Edinburgh Trust has not suffered any loss in performance since the announcement.

Woodford has since confirmed he will be joining Oakley Capital Management where he will head up the firm's asset management arm.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Edinburgh Investment Ord735.00 GBX0.14Rating
Invesco UK Eq High Inc UK Inc335.85 GBP-0.88Rating
Invesco UK Equity Inc UK Inc1,324.17 GBP-0.78Rating
Keystone Positive Change Investment Ord223.00 GBX-0.45Rating

About Author

Emma Wall  is former Senior International Editor for Morningstar

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures