Woodford Equity Income among 11 new entries in FE ratings to win top ranking

Neil Woodford

Woodford Equity Income is among a selection of funds to be rated by FE in its latest crown rebalancing, winning the highest rating of five crowns.

Other names among the 11 funds previously unrated due to their short history, which have now been awarded the top accolade, include BlackRock Asia Special Situations and BNY Mellon Japan Small Cap Equity Focus.

Overall 317 funds secured five crowns, of which 14 are from Old Mutual Global Investors while Fidelity, Janus Henderson and T.Rowe Price account for 11 funds each.

The rebalancing also saw 86 funds lose two or more FE crowns and four funds downgraded from five crowns down to one.

Rob Gleeson, head of FE research, says: “The fact that large funds from Woodford and BNY Mellon are getting five crowns at the first time of asking demonstrates that a large size does not necessarily preclude good performance.”

On a sector basis, 63 per cent of the funds rebalanced are in the UK equity and bond income sector and 60 per cent are in the money market and short term money market sectors.

Aside from the unclassified sector, the global sector hosts the highest number of funds with five crowns at 30, followed by the specialist sector with 26 and Europe excluding UK with 22.

The Japanese smaller companies, UK equity and bond income and Europe excluding UK sectors now boast the most five-crown funds on a percentage basis while no funds in the global equity income, short term money market or UK gilts sectors were awarded five crowns.

Gleeson says: “From a sector perspective, the latest rebalance shows a similar story to January’s FE fund crowns. Managers are generally finding fertile ground in more specialist, less researched industries which is where active management is widely believed to pay dividends.

“Funds that are looking for higher yields to boost returns are struggling in the low-rate environment, and the additional uncertainty around a possible rate rise is also being felt most acutely by them.”