Woodford's new fund opens this week
The latest fund from Neil Woodford, probably one of the best-known British fund managers today, is now open for investors. Called CF Woodford Income Focus, it will aim to deliver high returns.
The reason for this fund being greeted with such fanfare is down to Neil Woodford’s strong history of managing money. Although his Patient Capital Trust has been a bit of a slow starter (but do bear in mind that it’s only existed since 2015, and the name does hint at long-term thinking), the man’s historic record is compelling stuff.
Some numbers have been provided by Hargreaves Lansdown. Since 1988, Mr Woodford has:
- Turned £10,000 into £296,300
- Provided a 12.7% return per annum
- £42,614 of income generated on a £10,000 investment, with capital growth to £90,021
The new fund is being marketed as one that will aim to deliver an income of 5p per share per annum ‘with no compromise on quality’. It’s global too, and will only invest in quoted assets.
Laith Khalaf, senior analyst at Hargreaves Lansdown, says: “Neil Woodford puts bums on seats, and we expect plenty of investor interest in his new high yield offering, particularly in light of the fact that many income-seekers have been left high and dry by low interest rates.
“Mr Woodford’s career track record demonstrates the significant value that can be added by a skilful active manager, and investors who have stuck with him for the long term have been very handsomely rewarded indeed.”
The general term for the rate of income from an investment expressed as an annual percentage and based on its current market value. For example, if a corporate bond or gilt originally sold at £100 par value with a coupon of 10% is bought for £100 then the coupon and the yield are the same at 10%, or £10. But if an investor buys the bond for £125, its coupon is still 10% (or £10) and the investor receives £10 but as the investor bought the bond for £125 (not £100) the yield on the investment is 8%.