Commenting on the appointment of Aberdeen Standard Investments to manage the LF Woodford Income Focus fund, Ryan Hughes, head of active portfolios at AJ Bell said:
“The appointment of Aberdeen Standard Investments to manage the fund formerly known as Woodford Income Focus will bring some relief to investors who now have some clarity as to what will happen to their money as we enter 2020. The question for those investors now is should they stay with the new manager or move onto a different fund.
“Thomas Moore and Charles Luke are both experienced equity income managers but both have underperformed the FTSE All Share Index with their open ended funds over the past five years which may be cause for concern to some investors, despite Moore’s longer term track record being impressive.
“One key issue is the type of fund that the duo will now run. The announcement states that the portfolio will be concentrated to around 30 high conviction positions, however, this is significantly more concentrated than the existing funds that they manage which contain around 60 stocks. Investors may be heartened to see that there is minimal crossover between Woodford Income Focus and the portfolios managed by Moore and Luke, however, this does indicate that a significant amount of portfolio adjustment will be needed that will result in costs being incurred by investors.
“If investors do feel that they want to look at alternatives, funds such as Troy Trojan Income and Threadneedle UK Equity Income both have long track records of delivering solid returns, attractive levels of income and a focus on larger companies in the UK market.”