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Woodford raises £553 million for Income Focus fund

Woodford raises £553 million for Income Focus fund

by Dylan Lobo Apr 19, 2017 at 11:52

Citywire A-rated Neil Woodford has raised £553 million for his higher-yielding Income Focus fund.

The fundraising makes the Income Focus fund one of the UK's most popular fund launches, although the amount raised is below the £1.6 billion the Woodford Equity Income fund gathered at launch, or the £800 million for the Woodford Patient Capital (WPCT) investment trust.

The new fund is targeting a dividend of 5p per unit in its first full calendar year in 2018, having launched at 100p and will invest in a portfolio of around 55 stocks. As with his other funds, Woodford intends to publish the names of all the stocks in the portfolio once the first factsheet is published.

'I am very excited by the income prospects of the companies within the portfolio,' said Woodford. 'In a low interest world, an income-focused equity portfolio is an attractive proposition for investors, while the lack of geographic restraints allows me to access quality income stocks regardless of their location.'  

The inflows lift total assets under management at Woodford Investment Management to £17 billion.

'After speaking to private investors, intermediaries and platforms last year, we knew there was an appetite for a new equity fund targeting a higher income,' Woodford Investment Management chief executive Craig Newman said.

'Aligned with Neil’s outlook for the investment opportunity, the fantastic response highlights investors’ continued interest and requirement for high quality income streams in today’s economic environment.' 

Laith Khalaf, senior analyst at online stockbroker Hargreaves Lansdown, said: 'Neil Woodford's new offering has proved a hit with investors, which isn't too surprising given his pedigree, low management charges, and the fund's focus on a higher income.

'The new fund hasn't raised as much as the first offering launched by Woodford Investment Management, but the new fund targets a more specific audience, and this time around there isn't the boost from some investors from his previous Invesco Perpetual funds following him to his new venture.'

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Comments  (7)

  • albion: 

    Despite all the publicity including Citywire, with sales being less than expected perhaps people are beginning to realise that he is no longer the 'star' manager.

    14:51 on 19 April 2017

  • Amit Kapoor: 

    £1.6 million - I think you meant billion

    16:21 on 19 April 2017

  • Daniel Grote - Citywire: 

    Sorry, that's been changed now.

    16:30 on 19 April 2017

  • Franco: 

    He has been running two funds so far and both are currently underperforming.

    I still have hopes for his Income fund but I am sure his Patient Capital destroy him. He has pushed his luck too far.

    16:48 on 19 April 2017

  • Big boy: 

    How much is the Capital being eroded every year as suspect expenses being taken from capital a/c rather than revenue a/c. Also what were the costs to set up the fund?? Why are those investors who paid a premium to buy WPC selling at discount of 6%???? They said it was a long term investment. They should know FMs launch new funds on the crest of the wave.

    17:48 on 19 April 2017

  • Mark Yu: 

    That is how the PIs are conned. If you really believe Woodford will deliver so-called long term performance for wpct, say 100% return in five years, then now is the time to be in as it means that you will get 120% return in three years as it has declined in the first two years, and what is more you are already a better investor than Woodford himself. Just to show nobody is infallible and don't trust so called star manager blindly.

    I am really puzzled by Woodford still claiming his wpct made good positive progress while it has underperformed FTSE 100 by 20% (dividends include) in two years.

    09:57 on 22 April 2017

  • A C Wiltshire: 

    It will be interesting to see how much money is switched from the Income fund to the Focus fund. I suspect that a number of investors will feel a lot happier in the Focus fund receiving the higher yield.

    Also, should the money switched prove to be substantial, are there going to be liquidity problems reducing the unlisted holdings held within the Income fund?

    16:53 on 22 April 2017

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