The LF Woodford Equity Income fund was the most frequently ditched by the stockbroker’s clients, at a time when the firm recorded a 35% rise in the number of funds traded across its platform.
In general, investors pulled a total of £1bn ($1.39bn €1.13bn) from the star manager’s eponymous fund over the first five weeks of the year, taking it down to £7.2bn. Since then, his fund has continued to see redemptions and stands at £7.1bn as at 20 February.
Joining Woodford in The Share Centre’s top five most sold funds in January are First State Global Listed Infrastructure, followed by the fund he previously ran, the £9.8bn Invesco Perpetual High Income fund, now managed by former colleague Mark Barnett.
Commenting on the data, Sheridan Admans, analyst at The Share Centre, said it was “not surprising that funds associated with the infrastructure sector feature heavily in the top sold list”, especially in the wake of the Carillion collapse.
“The collapsed government contractor Carillion, who failed to find a rescue package and subsequently fell into liquidation, grabbed headlines in January,” he said. “The news was dominated by the story putting a renewed focus on the support service sector and questions were then asked about how these companies operate.”
The top sold trio have varying degrees of exposure to the sector. Whereas the £2.3bn First State fund explicitly targets infrastructure companies around the world, as its name suggests, Woodford and Barnett own a number of support services stocks, which the stockbroker said could account for investors’ aversion.
Most notably, the duo are majority shareholders of Capita, which saw its shares tank 40% after issuing a profit warning and announcing a major restructuring programme. However, it should be noted that this occurred on the final day of The Share Centre’s recorded sales period.
The Tom Dobell-led M&G Recovery fund and Aberdeen Emerging Markets Equity fund were the fourth and fifth most sold funds by The Share Centre’s clients, which Admans suggested was down to “market conditions favouring growth and momentum led strategies” and the latter’s continued underperformance at a time when the asset class has recovered.
The winners
On the opposite side of the spectrum, the Legg Mason Japan Equity fund was the most traded fund among the firm’s clients, followed by Man GLG Continental Growth and the Terry Smith-run Fundsmith Equity fund.
Behind them were the Jupiter India and Axa Framlington Global Technology funds.
The list of most popular funds makes clear that “investors prefer to diversify away from their long-standing home bias of investing in the UK”, Sheridan said.
“Japan holds on to the top investment destination of choice for investors who may have taken some reassurance that Abenomics will continue as a result of the re-election of Shinzo Abe at the back end of last year. Meanwhile, the progress being made by the reformist pro-business government of India and the favourable outlook may explain the presence of the Jupiter India fund.
“Interest in the Man GLG Continental European Growth fund is unsurprising given that falling unemployment, improving policy reforms and reduced budget deficits across the continent are providing a positive backdrop for growth in Europe.”
