Investors ditch UK as Woodford fund falls from favour

Investors have rejected UK equities in over the last month as Neil Woodford’s new Income Focus fund dropped out of the top sold funds in favour of more geographically diverse products, The Share Centre reports.

While the longer established Equity Income fund topped the list of The Share Centre’s best selling fund for July, it was the only UK equity fund to feature in the top 10.

Share Centre investment manager Sheridan Admans says Income Focus has been consistently present in the most popular funds since its launch in April and its absence from the July monthly figures was a surprise.

“Woodford’s Income Focus fund has dropped out, being replaced by more funds offering investors geographical diversification and income from overseas sources,” Admans says.

Global equity favourites Fundsmith Equity and Lindsell Train Global Equity both featured in the top five alongside the Jupiter India and Legg Mason Japan funds.

“India has been capturing investors’ attention as the government pursues a reform agenda, whilst the Japanese government has been aggressively pursuing sustainable inflation, something which has eluded it for decades,” Admans says.

The inclusion of Man GLG Continental European Growth reinforces the fact investors wish to diversify away from the UK, Admans says.

In May, Woodford announced he was taking a “contrarian” approach to the UK initiating positions in Lloyds, Taylor Wimpey and Barratt.

Woodford’s three funds have suffered a streak of bad news over the last fortnight resulting in all underperforming their respective sectors, most recently with pharmaceutical company Vernalis suffering a 10 per cent share price hit on hurdles entering the US market.

Top traded funds in July 2017 from The Share Centre:

1. CF Woodford Equity Income

2. Fundsmith Equity

3. Jupiter India

4 Legg Mason Japan

5. Lindsell Train Global Equity

6. AXA Framlington Global Technology

7. Man GLG Continental European Growth

8. Vanguard LifeStrategy 100% Equity

9. JPMorgan US Equity Income

10. Fidelity Global Dividend