Aberdeen Standard to take over Woodford Income Focus

Aberdeen Standard will take over the running of the Woodford Income Focus fund, which is expected to reopen by February 

Holly Black 20 December, 2019 | 9:54AM

woodford

Aberbeen Standard is to take over the running of Woodford Income Focus, with the fund expected to be open again by February.

Link Fund Solutions, the authorised corporate director of Woodford’s funds, has told investors it had appointed ASI to manage the fund, which suspended trading in October when Neil Woodford confirmed he would close his firm Woodford Investment Management.

Link said the fund would remain suspended while ASI repositions the portfolio and reviews its income yield target. It expects to update investors around January 13, 2020 on progress and to confirm the date the fund will be reopened.

ASI has also agreed to waive its management fee until May 31, 2020, which will be a welcome gesture to many investors.

Woodford Income Focus initially stayed open to investors after the gating of its sister fund Woodford Equity Income in June. But it suffered heavy outflows by investors concerned about both performance and contagion risk. It still has assets under management of £267 million and is down 6.6% year to date.

High Conviction Strategy

Since its suspension, the fund has returned 5.63%, marginally lower than its benchmark the FTSE All-Share Total Return Index, which is up 5.67%.

The fund will now be renamed ASI Income Focus and will be run with a “high conviction” strategy, with around 30 stocks in the portfolio. Aberdeen Standard’s Charles Luke and Thomas Moore will take over the running of the fund from December 31.

Luke currently runs the ASI UK Income Equity fund, which is rated three stars by Morningstar and has returned 25.3% year to date. It has also produced annualised returns of 8.1% over 10 years, however Luke has only managed the fund since 2017.

Moore manages the ASI UK Income Unconstrained Equity fund and Aberdeen Standard Equity Income Trust (ASEI). Both have a Bronze Morningstar Analyst Rating and Morningstar analyst Peter Brunt says of the fund: “With a talented manager at he helm and solid analytical backing, we continue to find this strategy an attractive option for investors seeking income growth.”

Andrew Millington, head of UK Equities at Aberdeen Standard, said: “We recognised the issues that may have weighed on the minds of investors in the fund over the past months and we are resolute in our determination to turn things around for them.

“We will reposition the fund into a focused portfolio of our favoured, liquid UK equity income names aiming to generate sustainable long-term income growth for its investors.”

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Aberdeen Standard Equity Inc Trust Ord408.00 GBX0.74

About Author

Holly Black  is Senior Editor, Morningstar.co.uk

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