Aberdeen Standard Investments (ASI) will take over as manager of the Woodford Income Focus Fund from the turn of the year, and hope to reopen it for dealing no later than February.
Link, the fund’s Authorised Corporate Director, confirmed the new management will take effect from 31 December 2019. Dealing in the fund remains suspended, but Link are now confident the fund is a viable long-term proposition and should reopen by February.
Aberdeen Standard Investments, Link and Northern Trust (the fund administrator) have all agreed to waive their fees until 31 May 2020.
The fund’s standard annual charge is currently 0.75%, with a reduction to 0.50% for a unit class available through HL. We’re currently waiving our platform charge to hold the fund while it’s suspended, and will start charging this again when the fund reopens.
The fund will be renamed the LF ASI Income Focus Fund, subject to regulatory approval.
Who are the new managers and what will the fund look like?
The £267.6m fund will be managed by UK equity income investors Thomas Moore and Charles Luke, who will re-position the portfolio to reflect 30 or so of their best ideas, where they see the greatest income opportunities in the market. They’ll also draw on ideas from ASI’s 16 person UK equity team.
They’ll only invest in listed stocks, expected to be a mix of large cap FTSE 100 stocks and mid-sized FTSE 250 companies. At 30 stocks the concentrated nature of the portfolio means it’s higher-risk, as the performance of each holding will have a bigger impact on returns.
Both Moore and Luke have experience investing for income in the UK. Moore has managed the £1.2bn ASI UK Income Unconstrained Equity Fund since 2009, seeking income stocks which are undervalued by the wider market.
The ASI UK Unconstrained Income Equity Fund invests in fewer smaller companies compared to the Woodford Income Focus Fund, with 27% in smaller companies compared to Woodford’s 51%.
The sector weights differ too. The ASI fund has a greater proportion invested in oil & gas and financial stocks, where the Woodford Income Focus Fund has a larger amount invested in consumer stocks.
We’ll be meeting the team in early January, after which we’ll be in touch with more information.
Link says it will give more details about when the fund will reopen in an update, on or around 13 January.