Woodford Equity Income: 1 Year On

When Neil Woodford announced he was departing Invesco Perpetual panicked investors sold out of his equity income funds and billions of pounds moved into the new launch

Emma Wall 8 June, 2015 | 4:44PM

It has been 12 months since Neil Woodford launched his Equity Income fund. Investors who had backed the star manager during his 25 year tenure at Invesco Perpetual waited patiently for eight months for Woodford to launch Equity Income following his shock exit from Invesco. But once the eponymous fund was available to retail investors, cash poured in at a record rate, taking the fund to billions under management in a matter of months.

Now, a year on, the fund sits at £6.2 billion, and has returned an impressive 18% since launch. Morningstar analysts rate the fund Bronze, and it sits on many ‘buy’ lists, recommended as a core holding. There have been a few hiccups along the way. At a dinner before the fund’s launch Woodford said that he would be investing in banks for the first time in a decade, confident that the worst of the banking crisis was behind the sector. Fast forward just four months and the income manager dropped HSBC (HSBA) like a hot potato, scared off by ever mounting fines levied at high street lenders.

“In recent weeks, I have started to become more concerned about one particular risk: that of ‘fine inflation’ in the banking industry,” Woodford said last September. “Clearly, banks have attracted many fines in the post-financial crisis world as regulators and policy-makers have cracked down on past and ongoing wrongdoings in the industry. The size of the fines, however, appears to be increasing.”

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
HSBC Holdings PLC325.55 GBP0.00
LF Woodford Equity Income A Sterling Acc13.41 GBP4.04
Woodford Patient Capital Trust26.36 GBP1.77

About Author

Emma Wall  is former Senior International Editor for Morningstar

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