Update: Jupiter Merlin team gradually sold £380m of Woodford's flagship fund since 2015 – Investment Week

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Jupiter’s multi-manager Merlin team has been gradually selling its holding in the Woodford Equity Income fund since August 2015, with a total of £383m sold across the three portfolios over this time.

According to trading data on the funds, John Chatfeild-Roberts, head of Jupiter Asset Management’s Merlin fund range, has reduced exposure to the Woodford Equity Income fund across the multi-manager portfolios by £382.8m over the period from August 2015.

The biggest change was seen on the Jupiter Merlin Income fund, which has reduced its allocation to the UK equity income product by £360.4m since October 2015.

It now holds £193.8m in Neil Woodford’s fund, which makes up 6.2% of the portfolio. However, this reduction happened gradually over two years: on the 15 October 2015 the portfolio held nearly 14% in Woodford’s fund, but by 15 October 2016 this holding had already fallen to 7.8%.

Meanwhile, the Merlin Growth and Balanced funds only reduced their holdings by a small amount since August 2015 – by £10.7m and £11.7m respectively. They still hold 5.7% and 10.6% of the fund, respectively.

Overall, the Merlin range still has £513.6m invested in Woodford’s fund across the three multi-manager portfolios.

Commenting on the most recent sale, a Woodford IM spokesperson said: “The transaction was concluded in September and the current AUM of £8.9bn reflects this.”

A tough year

The fund’s AUM has dropped from a peak of more than £10bn earlier in the year, as performance has been hit by a number of stock specific issues.

Fund selectors’ verdict on Woodford’s ‘annus horribilis’

In August, Provident Financial, a 4.1% holding in the fund at the time, saw its shares fall some 70% in a day after issuing a second profit warning in just three months.

Earlier in the summer, Woodford’s number one holding AstraZeneca fell by nearly 16% after a failed drug trial, affecting some 8.7% of the Equity Income fund.

A further hit came in September, when shares in AA, a 0.78% holding in the portfolio, fell on disappointing half-year results. 

As a result of these issues, the fund has significantly underperformed the IA UK Equity Income sector, returning -0.3% over the year to 9 October versus a sector average of 10.5%, making it the worst performer in the sector, according to FE.

Over three years, the fund is also in the fourth quartile, returning 28% versus the sector’s 35%.

Jupiter’s strong inflows

Meanwhile, Jupiter has continued to see strong inflows into its fund ranges, taking in a net £1.2bn into its mutual funds over the quarter to 30 September.

The most popular strategies with investors were within fixed income, while the European Growth, UK Value, Absolute Return and Global Emerging Markets strategies also attracted ‘meaningful inflows’. However, the fund of funds strategy suffered outflows during the quarter.

 Maarten Slendebroek, chief executive, said: “We are pleased to report another quarter of healthy flows following on from a strong first half.

“The business momentum from our pursuit of business diversification allied with positive investment performance after fees has driven a 3% increase in AUM over the quarter and a 19% increase since the beginning of the year.”

About the author

Anna is news editor at Investment Week, having joined the title in January 2013. She covers the ETF beat and is responsible for the regular podcast series.

Prior to this role, she worked at Investment Europe covering European investment markets. She began her journalism career at Euromoney Institutional Investor in 2011.

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