A number of our readers are stuck in no-man’s land, trying to decide what to do with the large amount of capital they hold in Woodford’s Invesco Perpetual Income and High Income funds. The £33bn the manager runs between the two mandates suggests that these products are more than just a core holding in many of your portfolios.
At the time of writing, nearly a third of our readers said they planned to pull their money from the Invesco funds as a result of the star manager’s departure.
As always seems to be the case at this time of year, the conversation in our office seems to be dominated by football. For those of you who are well into your fantasy football leagues, Woodford signing off is akin to a first choice centre-back from one of the big-four sitting out injured – those steady, reliable points may go missing as you have to rely on the rest of your team to pick up the slack.
But in Woodford’s case, long-standing and in fact outperforming fund manager Mark Barnett is stepping into his shoes, so it remains to be seen whether investors would be better off putting their money in a number of other UK Equity Income portfolios or if it is worth sticking with Invesco Perpetual’s new front man.
As we pointed out earlier today, Barnett has actually returned more than Woodford over one, three, five and 10 years.
Over the last decade, he has made 233.28 per cent compared with 182.83 per cent from Woodford, according to FE Analytics.
Performance of managers over 10yrs
Source: FE Analytics
However, there are a number of other options out there – the likes of FE Alpha Managers Adrian Frost and Adrian Gosden on their outperforming Artemis Income fund or FE Alpha Manager Francis Brooke’s leading Trojan Income portfolio.
Investors are really spoiled for choice.
Personally, I think anyone with a portion of their ISA or pension in the Invesco Perpetual Income or High Income funds would be better served by not taking a knee-jerk reaction.
Woodford does not leave until April. This means Barnett has several months to get warmed up on the massive funds and if performance is wobbling on outflows, you can take your time and really consider which of the milieu of UK Equity Income funds out there truly suits your needs.
And who knows, you could be kicking yourself if Barnett turns out to be the golden boot-winning striker to Woodford’s dependable defender.
Still, as any football fan knows, you need every player on the team to be at their best in order to win the league. We’ve dedicated the next issue of FE Trustnet Investazine to the best of the best fund managers in every walk of the investment world – those that have earned the coveted FE Alpha Manager rating.
These managers have the ability to perform in both rising and falling markets and have stood the test of time.
For more information on these managers and how to best use them within your portfolio, download the next edition of Investazine, out on 29 October.
