Woodford Equity Income Upgraded by Fund Analysts

Morningstar fund analysts have upgraded Neil Woodford's UK equity income fund to a Silver Rating thanks to low fees and a positive performance record

Emma Wall 18 August, 2016 | 10:09AM
Facebook Twitter LinkedIn



Emma Wall: Hello, and welcome to Morningstar. I'm Emma Wall and I'm joined today by Senior Fund Analyst, Pete Brunt.

Hi, Pete.

Peter Brunt: Hi, Emma.

Wall: So, we've just heard that the analyst team here at Morningstar has upgraded Woodford Equity Income. What's the news?

Brunt: That's right. So, when Neil Woodford started this company we obviously took a while to sort of understand how things were then. We came up with a Bronze rating. I think we've been taking our time to kind of understand how he has been running things there. It's been a couple of years now.

Things have settled a little bit. They had a bit of turnover at the beginning within their non-investment side of things and the stuff. We're a bit more comfortable with how he is running money. There's also been some changes that they've brought on, on the fee side of things, which we view very positively. And yeah, I mean, both of those things together have made us raise the rating to Silver.

Wall: And this is not the highest fund analyst rating that Neil has held from Morningstar in his career. He had a Gold rating when he was at Invesco Perpetual. But the fund he is running now looks quite different from that fund he was running back then, doesn't it?

Brunt: Yeah, I mean, there are differences. He runs the same strategy, same investment approach. It's a combination of his macro views on the market and so he is using stocks as well. Where the difference is, he is running a little bit more money in unquoteds which obviously require a lot more due diligence in the investment. We feel reassured there given that he has got quite a big team.

He has got five analysts that are pretty much focused entirely on the unquoted sector. So he is very well informed with the open-ended space. He probably has the largest team there. And he is also just a little bit further down the cap scale in the listed companies' area. He is not running as much money as he was at Invesco Perpetual. The fund is still over $9 billion.

Wall: Not a small fund though, is it, $9 billion?

Brunt: No. Exactly. So, we're sort of closely monitoring that and seeing how it goes. But generally, we feel very comfortable giving him a Silver rating.

Wall: Pete, thank you very much.

Brunt: No problem.

Wall: This is Emma Wall for Morningstar. Thank you for watching.

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
LF Equity Income C Sterling Acc0.98 GBP0.00

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