Neil Woodford raises £0.5bn for new income focus fund
(ShareCast News) - Star fund manager Neil Woodford drummed up £553m from investors in his new income fund since it launched last month.
The Woodford Income Focus fund, which the eponymous fund manager will control alongside his company's two other funds, was launched in response to increasing demand from investors for more income.
The launch period opened on 20 March and closed on 12 April, with pricing beginning the following day.
Unlike the other funds in the Woodford Investment Management stable, the fund has no geographical constraints as it looks to deliver an income of 5p per share per year.
The funds raised by the Income Focus fund are impressive but short of the £800m attracted by Woodford's first launch, the Patient Capital fund in 2015, which was the biggest UK investment trust launch in history.
Recent data released by the Office for National Statistics showed UK household saving rates last year fell to lowest since records began in the 1960s, amid barrel-bottom interest rates and following a trend that has seen the savings ratio fall since mid-2015 as consumer spending outstrips growth in disposable incomes.
Analyst Laith Khalaf at Hargreaves Lansdown said with the savings ratio at record lows there were not many fund managers who could raise half a billion pounds in a matter of weeks, with the new offering proving a hit with investors thanks to the manager's pedigree, low management charges, and the fund's focus on a higher income.
"Savers and investors have been left high and dry by low interest rates, and now people are increasingly investing their pension in retirement, the appeal of a high income fund run by one of the UK's best fund managers is clear.
"The new fund hasn't raised as much as the first offering launched by Woodford Investment Management, but the new fund targets a more specific audience, and this time around there isn't the boost from some investors from his previous Invesco Perpetual funds following him to his new venture."