Wood­ford to launch higher in­come fund pay­ing 5pc

The Daily Telegraph - Your Money - - YOUR MONEY - Laura Suter

Feted stock picker Neil Wood­ford will launch a fund tar­get­ing 5pc in­come at its out­set – a higher level than his ex­ist­ing fund. Wood­ford In­vest­ment Man­age­ment, his epony­mous firm, will launch the In­come Fo­cus fund onMarch 20, re­port­edly, in or­der to cap­ture in­vestors’ Isa con­tri­bu­tions around the be­gin­ning of the new tax year on April 6.

The fund will ini­tially pay 5p of in­come per £1 in­vested, while the cur­rent £9.6bn Wood­ford Eq­uity In­come fund ini­tially tar­geted 4p for ev­ery £1 in­vested.

Af­ter the first year the new fund will aim to de­liver 20pc more than the yield of the FTSE All Share in­dex, the bench­mark for Bri­tish com­pa­nies.

The fund launch comes ahead of the dead­line for Isa sub­scrip­tions at tax year end, when many in­vestors rush to fill the cur­rent £15,240 limit for tax-free investing. The limit rises to £20,000 for 2017-18.

The new fund, like the ex­ist­ing one, will in­vest mainly in UK stocks and can in­vest up to 20pc in over­seas com­pa­nies. The fund will in­vest only in listed com­pa­nies.

A high in­come vari­ant of the ex­ist­ing fund would mir­ror the po­si­tion at Mr Wood­ford’s for­mer em­ployer, In­vesco Per­pet­ual, where he ran both the In­come and High In­come funds.

Mark Dampier of Har­g­reaves Lans­down, the fund shop, said: “From a launch price of 100p, Wood­ford is aim­ing to pro­vide a pretty punchy 5p in­come in 2018.

“This will limit the op­por­tu­nity for growth. So, for me, this fund will be very much for those seek­ing and pri­ori­tis­ing in­come over growth. This con­trasts with Wood­ford Eq­uity In­come, which is more growth-ori­en­tated.”

The Wood­ford Eq­uity In­come fund un­der­per­formed in 2016, re­turn­ing 3.2pc against 16.8pc for the FTSE All Share in­dex. Since launch in June 2014 the fund has re­turned 28.2pc, com­pared with the FTSE All Share’s 16.6pc.

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