In October, net retail flows into UK open-ended funds remained strong at £1.9bn, significantly higher than the £0.9bn posted for the same month the year before.
But within the IMA data, a notable trend was picked up by analysts at Numis who looked at the UK Equity Income Sector, where Woodford’s behemoth funds, to be taken on by Mark Barnett, sit.
Numis pointed out that over the stretch some £298m exited the sector, compared to record net inflows of £358m the previous month.
“In our view, this was largely a reflection of redemptions from Invesco Perpetual’s equity income funds, following the announcement in mid-October that Neil Woodford is to leave the group,” Numis said.
Looking at the fuller picture, it has widely been assumed that the loss of two key mandates triggered redemptions of roughly £500m during October – £446m from the Invesco Perpetual Income Fund and £61m from the Invesco Perpetual High Income Fund.
Taken together with the IMA data, Numis said this implies net inflows of more than £200m into other vehicles in the sector.
Trusts hold their own
In the closed-end space, while Woodford’s departure caused his Edinburgh Investment Trust to initially slip to a discount of around 2.4%, the £1.1bn vehicle has recovered much of its lost demand given that this figure has now narrowed to -0.4%.
The likes of Investec Wealth & Investment were quick to pounce on the weakness of Woodford’s trust and scooped up its shares, though some analysts hinted a mandate change could be on the cards if Barnett eventually takes over the fund.
That said, the board of Edinburgh IT has still to break cover over its plans for the trust’s future management. It has been quick in the past to change managers and fund houses, switching from Fidelity to Invesco in 2008, though after Woodford’s resignation was announced the trust’s directors said they did not want to rush to any conclusions.
