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Aviva platform ditches Woodford for Threadneedle

Star manager Neil Woodford

Aviva has ditched Woodford Equity Income for a Threadneedle alternative in its investment range for pension customers following recent disappointing performance from the star fund manager.

The move impacts approximately £30m of assets held by customers who chose alternatives to Aviva’s default funds. Customers with advisers will still be able to invest in the fund via the advised-only wrap platform.

Customers that do not request otherwise will be automatically transferred into the Threadneedle UK Equity Income fund, which is managed by Richard Colwell.

That fund has returned 12.8 per cent over the last year compared to a small loss of 0.03 per cent in the Woodford Equity Income fund, which is now fourth quartile over every time horizon, according to FE data.

The £4.1bn Threadneedle fund is fourth quartile for the last six months, but is first quartile over five years and second quartile over one and three years.

The blow to Woodford follows news last month that Jupiter had pulled approximately £300m from the fund.

The boutique manager’s flagship fund now holds £8.4bn in assets having earlier this year celebrated passing the £10bn mark.

Woodford apologised to investors in September for recent disappointing performance. Payday lender Provident Financial, pharmaceutical company Vernalis, AstraZeneca and auto company AA all suffered double digit losses over the summer.

Woodford Equity Income vs Threadneedle UK Equity Income performance (%)

6m 1yr 3yr
Woodford Equity Income -7.3 -0.03 20.7
Threadneedle
UK Equity Income
-1.5 12.8 28.8
FTSE All Share 1 13.4 26.7
IA UK Equity Income 0.2 12.3 26.1
Source: FE

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Oh dear, buy high and sell low by design. This is the kind of behaviour that damages client returns.

  2. It is not the place of a platform to decide what to hold or what not to hold. A platform is merely a utility and as such should make all investments available. It is up to the adviser to decide what or what not to use.

  3. These are not advised clients though Harry. They are pension clients who chose their own funds, who are now having funds chosen for them!

    Selling funds after recent underperformance and replacing them with recent outperformers is a recipe for disaster.

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