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Woodford Equity Income hits £10bn

Neil Woodford may have pipped arch rival Terry Smith in getting his flagship equity income fund over £10 billion in assets for the first time.

 
Woodford Equity Income hits £10bn

Neil Woodford may have pipped arch rival Terry Smith in getting his flagship Woodford Equity Income  fund over £10 billion in assets for the first time.

Citywire understands the fund, which raised a record £1.6 billion at its launch in June 2014, broke the landmark figure on Friday, which may put it ahead of Fundsmith Equity which stood at £9.8 billion at the end of February.

We won't know for sure until we get figures for the end of this month in a few weeks' time.

Excluding institutional cash funds and funds denominated in currencies other than sterling, there are very few funds with more than £10 billion in assets. One of Woodford's old funds - the £11 billion Invesco Perpetual High Income - is an obvious example, as is the £25 billion Standard Life Investments Global Absolute Return Strategies fund and Richard Woolnough's M&G Optimal Income fund. 

Both Fundsmith and Woodford Equity Income have been among the country's top-selling investments in recent years with Citywire A-rated Woodford and AAA-rated Smith enjoying star billing among investors for their impressive track records and clear investment philosophies.

The continued growth in Woodford Equity Income follows a relatively difficult 2016 which Woodford admitted had ‘tested his resolve’ with the fund lagging the FTSE All-Share's total return of 16.8% with a gain of just 3.2%.

Nevertheless, Woodford’s investment firm was still the sixth biggest selling asset manager in 2016, attracting net inflows of just over £1 billion, according to the Pridham report.

Hitting the £10 billion mark comes as Woodford prepares to launch the Woodford Income Focus fund, the third in his stable. It will offer a higher yield and hold more overseas stocks and therefore might have been expected to curb inflows into the main income fund.

Like its big sister, Woodford's new fund will enjoy the marketing support of Hargreaves Lansdown, unlike Fundsmith which has gathered its assets without a specific recommendation from the country's largest investment broker. 

8 comments so far. Why not have your say?

Pensioner

Mar 20, 2017 at 17:50

Yes. But you fail to mention he had a good leg up from his former employer Invesco Perpetual. If memory serves me right Invesco almost immediately invested 3 billion + with his new venture. Where as Terry Smith kicked off Fundsmith with his own £25 million from scratch with no Fund Manager experience to boot. No compare!

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Lyn888

Mar 20, 2017 at 19:01

Absolutely agree with you. Bought both funds within a couple of months of one another - up 20% with Woodford, but Fundsmith is up 45% - so no contest as far as I'm concerned.

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Mark Yu

Mar 20, 2017 at 20:04

Hush hush of his patient capital investment trust which is almost 10% down in two years while market worldwide, especially UK and US in which it invests, has broken record after record.

Don't buy the argument that one needs to be patient and only judges it in five or even ten years' time. That is not the script at launch as if it had been made clear that it will only outperform in 5 or 10 years time why would anybody should subscribe to it at launch?

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albion

Mar 20, 2017 at 22:20

Citywire, please tell us of your relationship with Woodford as to your reason for having articles on him every week or even more.

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Anthony Tinslay

Mar 21, 2017 at 20:57

The word "LEMMINGS" comes to mind, BIG or Extra Big is not always beautiful. The investors should use the same criteria when considering these funds as they would with almost any other.

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a t

Mar 25, 2017 at 09:46

Well said Mark Yu - (from someone who bought in to the Woodfords Patient Capital Trust @ £1.14 now trading at 92.30)

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FrankFrank

Mar 25, 2017 at 16:26

Be adventurous. Buy Manec Growth, OCF 3.28%. Quality does not come cheap.

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Pulpos

Apr 02, 2017 at 20:03

It does not seem that Woody had a "clear philosophy" when he launched his 1st Fund: it is a mixture of caps and unlisted stocks! , in contrast to his former high income fund at Invesco, where he HAD to keep to a strict selection of holdings with reliable yields. At that time he had a great philosophy- staying well clear from risky investments.

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