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UK Equity Income becomes worst-selling sector after Woodford outflows

The outflows that followed Neil Woodford’s resignation from Invesco Perpetual have caused the Investment Management Association UK Equity Income sector to go from being the best selling sector to the worst.

Data from the IMA shows the UK Equity Income sector suffered a net retail outflow of £298m in October, showing a sharp reversal from the previous month when a net inflow of £358m made it the most popular sector.

FE Analytics shows Woodford’s Invesco Perpetual Income fund was the sector’s most sold during October with a net outflow of £663m. Woodford’s Invesco Perpetual High Income, meanwhile, saw the sector’s second highest rate of redemptions with a net outflow of £423.7m.

Woodford’s resignation from Invesco Perpetual was announced on 15 October, leading to speculation over how much money will be pulled from his funds. He will leave the company on 29 April to establish his own asset management firm.

Thameside Wealth director Tom Kean says: “Advisers are between a rock and a hard place [when it comes to income], because you’d be wise not to put any more into fixed interest. I suspect some of the Woodford money could be going to places like commercial property and Standard Life Investment’s GARS fund.”

IMA Property was a popular sector in October, with net retail sales of £223m helping it move from being fifth bestselling to third. 

IMA All Companies was the top selling sector in October with net retail sales of £307m. FE Analytics shows BlackRock UK Equity Tracker, Richard Buxton’s Old Mutual UK Alpha and Julie Dean’s Cazenove UK Opportunities funds were the most popular in the month.

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