Woodford fund ranks alongside giants for worst outflows

Investors pull £150m from Income Focus – in line with outflows from much bigger funds


Woodford Income Focus has ranked alongside behemoths of fund industry for the products that suffered the worst net outflows in June, according to Morningstar.

Although three other funds suffered outflows worse than the £151m pulled from Income Focus, those funds are all comparatively larger.

They include the £8.1bn SLI Global Absolute Return Strategies, £11.2bn Invesco Global Targeted Returns and £6.8bn Invesco High Income funds. In contrast, Woodford Income Focus has just £296m meaning June’s outflows represented a one-third hit.

The £3.2bn Artemis Global Income fund rounded out the worst five funds for inflows over the month.

The size of Income Focus outflows relative to its size highlights the negative effect of the Woodford Equity Income fund suspension on the sister fund, which has a higher focus on income rather than total return that is employed by the flagship strategy.

Redemptions come as sales improve for UK-domiciled funds in H1 2019. While in aggregate investors pulled £17bn over the period, the direction of travel has been one of reducing net outflows with investors taking less than £1bn net in both May and June.

In contrast, total net flows for the same period last year were £13bn but month-by-month sales figures deteriorated. In the second half of 2018 investors pulled £14bn net from UK-domiciled funds.

Fixed income and multi asset were the main categories to attract net inflows in June, taking £178m and £158m respectively. While equity suffered net outflows of £566m and alternatives lost £749m, outflows had eased from previous months.

Property funds were the only category to buck this trend with £190m outflows representing the worst monthly flows since January. At that stage concerns about gating were returning to the sector as the initial deadline for Brexit on 29 March edged closer.

M&G Investments this week stressed its decision to block withdrawals of institutional investors from one of its property funds did not affect retail investors and was unrelated to Brexit.

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