According to Skandia, the reason behind the move is the ”unprecedented demand” for access to the recently launched vehicle managed by Neil Woodford – demand that it expects to continue for some time.
“To meet this need, and to avoid a situation where only a very few Skandia investors remain in the current Skandia Invesco Perpetual Income Fund – which could result in an increase in costs for these investors – we have therefore taken the decision to move all holdings in that fund back under the management of Neil Woodford,” the group said in a letter to clients.
According to Danny Cox, head of financial planning at Hargreaves Lansdown, the move is very unusual.
“I can’t think, off the top of my head, any other time that it has happened,” he said.
And, he points out, it creates an interesting precedent: “Fund managers move all the time, I am not aware of them doing this with any other funds.”
Skandia is clear to point out that clients are under no obligation to move into the new Woodford vehicle.
If investors wish to continue to invest in the Invesco fund, now run by Mark Barnett, they are able to invest in it through its Skandia Invesco Perpetual Strategic Income fund which remains open.
Switches can be made into this fund before the transfer takes place, Skandia says.
The Skandia Invesco Perpetual Income Fund will be closed and the OMW Old Mutual Woodford Equity Income Fund opened on 9 October 2014, subject to approval by the FCA. According to Skandia, the cost of the switch will be around 1%.
But, it said: "For clarity, these are external costs; they are not charges made by Skandia and we do not retain any part of them."
