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Woodford reveals new fund fees

by Robert St George on May 08, 2014 at 10:14

Woodford reveals new fund fees

Neil Woodford’s new fund will absorb its administrative expenses, meaning its annual management charge will be the same as the ongoing charge.

The fund’s fee structure has been confirmed as:

Share class A C Z X
Inc & Acc Inc & Acc Inc & Acc Inc & Acc
Initial None None None None
Annual 1.00% 0.75% 0.65% 1.50%
Ongoing charge 1.00% 0.75% 0.65% 1.50%
Exit None None None None

For comparison, Invesco Perpetual High Income has an ongoing charge of 1.17% on its 'no trail' share class and Invesco Perpetual Income has one of 1.16%.

The minimum investments for the Woodford fund are £150,000 for A shares, £50 million for C, £500 million for Z, and £1 million for X - although private investors will be able to buy in with lower amounts through platform distributors.

The fund’s pre-launch offer period will run from 2 June to 19 June 2014, with units priced at £1.

‘We are able to keep our fees low, through the use of modern technology and encouraging investors to use fund platforms, execution-only brokers and financial advice channels, rather than buying directly from us,’ commented Craig Newman, chief executive of Woodford Investment Management.

‘Many investors are still needlessly paying higher fees as a result of buying directly from fund management companies in the past.’

Citywire A-rated manager Woodford added: ‘I will run this new fund in the same way that I have always run money, adopting the same philosophy and the same long-term approach. My passion and energy have never been stronger. Woodford Investment Management has a culture and an environment that gives me the opportunity to focus on investing – and to build a business committed to its clients’ long-term interests.’

Capita Financial Managers will act as the fund’s authorised corporate director, and Woodford Investment Management has also severed its operational relationship with Oakley Capital Management Limited now that it has secured FCA approval in its own right.

5 comments so far. Why not have your say?


May 08, 2014 at 11:04

The fee structure sounds interesting but here is my niggling concern:

Will I know if the funds invest in 'riskier's securities than the ones I reasonably expect?

I'd hate the new company to be fined for failing to disclose unquoted holdings in a UK Equity Income sector fund.

It's all about disclosure - I don't mind so long as I know up front.

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David Cowell

May 08, 2014 at 13:06

It ain't possible to run funds worth squillions efficiently without using derivatives.

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Whatever the weather

May 08, 2014 at 14:00

Sceptic, you'll never know I'm afraid but then you'll never know whether you're going to be run over tomorrow or not. It must be a daily dilemma whether to get out of bed or hide under the duvet all day long.

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May 08, 2014 at 15:00

£18m+ in fines from the FCA makes it a reasonable question...

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Whatever the weather

May 08, 2014 at 15:53

For Invesco, yes I agree.

If you read the 39-page report from the FCA you'll know Neil Woodford isn't mentioned once.

Which were the "riskier securities" it mentioned?

Did the £18m+ fine in any way relate to failure to disclose unquoted positions?

Did you read the fund's prospectus?

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How is regulation feeding the outsourcing trend?

on Jul 24, 2014 at 10:59

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