Star fund manager Neil Woodford is leaving Invesco Perpetual in April 2014 after 25 years, a move which causes concern for thousands of investors in income trusts.
Private investors have ploughed billions into Woodford after funds reached market-beating returns. Invesco Perpetual high income, for example, has invested £13,9 billion in it, while the income fund is worth £10,6 billion.
The high income fund returned an average of 12.2% per year over the last 10 years (at the end of September 2013), while the income fund has returned the 12% per year, according to Morningstar.
Mark Barnett, head of Directorate-UK Strategic Income Fund, is the man chosen for the role of Woodford. He will replace Woodford as head of UK equities and take control of several funds from Woodford including: Invesco Perpetual high income and Invesco Perpetual income fundsand Invesco Perpetual Fund UK Equity Pension.
Delivery to Barnett will occur during a transitional period of six months prior to the departure of Woodford.
But Ciaran Mallon, current manager of income growth fund &, has already begun to manage UK equity elements of Woodford Invesco Perpetual monthly income Plus and Invesco Perpetual distribution fund.
In a statement, Invesco Perpetual said: "both [Barnett and Mallon] are expert and fund managers with experience that have the same active investment approach, based on the assessment and focus in the long term as Neil. The team will continue to strive to offer good long-term returns for investors ".
Mark Armour, chief executive of Invesco Perpetual, added: "they designed for succession for many years and have built a world-class culture of investments that develops and supports experienced managers and talent".
Woodford said: "leave the company on good terms and remain fully committed to my responsibilities at the Fund Manager Invesco perpetual until my departure.
"My decision to leave is a personal based on my views about where I see long-term opportunities in the Fund management sector. My intention is to establish a new fund management assets serving institutional and retail customers as soon as possible after the April 29, 2014 ".
Independent financial advisers urged investors not to panic. Patrick Connolly of Chase de Vere, said: "this is terrible news for Invesco perpetual and will be cause for concern for many investors who are confident their investments and pensions with Neil Woodford.
"It will be impossible for Invesco Perpetual Woodford replaced with someone of similar stature because, especially in the world of UK equity income funds, there is nobody like calibre. However, there is no reason for investors to panic. Woodford is still running investment funds the same today as it did yesterday and this will continue until next April.
"We recommend investors to invest money not new funds of Woodford. Those with existing companies should review how they currently with Woodford and if necessary trying to diversify into other funds. Suggested alternatives include Artemis income, Threadneedle UK Equity income and Rathbone income. "
Darius McDermott of Chelsea financial services added: "if as is rumored, by Neil intends to launch a new asset management activity, imagine will generate an incredible amount of interest – not to mention activities – from launch. However, I doubt very much that he will be able to take £ 33bn, so investors are facing a tough choice.
"No single alternative Fund will be able to deal with the switches that probably will come from this ad, then I suggest you some! Artemis income, income Rathbone and Threadneedle UK Equity Alpha income. "
A catch-all phrase that can range from assessing the price of a property or vehicle before it offers for sale or the net value of its assets in an investment portfolio for stock prices on the stock exchange.
An individual employed by an institution for the management of investment funds (unit trusts, investment trusts, pension fund or hedge funds) to meet pre-determined goals (usually to generate capital growth or maximizing income) prescribed geographic areas or sectors of investment (e.g. the United Kingdom more small businesses, technology or raw materials). The handler also carries responsibility for general supervision of the Fund, as well as daily trading activity monitoring and developing investment strategies to manage the risk profile of the Fund.
An interchangeable term for shares (UK) or (US) stocks. Holders of capital shares in a company are entitled to earnings and activities of a company after all Prior charges and capital requirements of the company (mainly his debts and liabilities) have been counted. Get equity in any business is to own a piece of it, so the holders of shares of a corporation actually own a piece proportional to the number of shares that they hold. (See also actions).
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