Sanlam Private Investments has axed Neil Woodford’s £11.9bn Invesco Perpetual High Income fund from the White List and placed a sell rating on both of the manager’s flagship offerings after questioning his pragmatism.
The High Income fund is one of five to be cut from the 14-strong White List. The fund sits fourth quartile in the IMA UK Equity Income sector over 12 months, having returned 9.3 per cent compared with a sector average of 15.8 per cent.
The SPI White List, formerly the Principal White List, cut Woodford’s £9bn Income fund in July 2012 for the first time in a decade. The White List calculates the best 14 funds in the sector, based on consistent total returns and risk over five years.
Both Woodford’s funds now sit towards the bottom of the Grey List. SPI says Woodford’s defensive views on the market, coupled with the large number of assets, have led to the fund becoming focused in many of the largest stocks in the market.
SPI head of managed funds Paul Surguy says: “When we are in an environment which is essentially a great economic experiment. We need managers that are able to be a bit more pragmatic in the short term. Woodford takes a long-term view and has a big focus on large caps, particularly healthcare, and we are not saying that is wrong.
“In five years he may be proved right, but investors move around in funds a lot quicker now. Managers that can react a little more quickly are the type we favour in this environment.”
Also dropped into the Grey List are the £505m Fidelity MoneyBuilder Dividend, £537m Threadneedle UK Monthly Income, £142m Franklin UK Equity Income and the Woodford-managed £1bn St James’s Place UK High Income funds.
Among those joining the White List are the £83m Unicorn UK Income fund, managed by Chris Hutchinson and John McClure, and the £820m Schroder Income Maximiser, managed by Thomas See.
The £149m Premier Monthly Income, £46m Rathbone Blue Chip Income & Growth and £46m PFS Chelverton UK Equity Income funds complete the new additions.
Topping the White List is the £1.4bn JO Hambro UK Equity Income fund, managed by James Lowen and Clive Beagles, with Unicorn UK Income and the £334m Threadneedle UK Equity Alpha Income fund second and third respectively.
Among the new entrants in the Black List is the £902m Neptune Income fund, managed by Robin Geffen, and the £452m PSigma Income fund, managed by Bill Mott.