Mark Barnett, the fund manager that took over management of Neil Woodford's funds at Invesco when he left to set up his own business, has said his funds follow a more balanced approach and should not be compared to Woodford's new product.
Barnett's Invesco Income fund and Invesco High Income funds have struggled since Woodford's departure in terms of performance, but the manager has insisted his approach is different to the star manager's, the Financial Times reports.
Following the suspension of Woodford's flagship fund on 3 June to prevent investors pulling money while simultaneously refusing to waive fees, Woodford has been met with heavy criticism.
In response to this, Barnett - who became the new head of UK equities for Invesco in 2014 and worked with Woodford for 17 years - has insisted his funds have a more balanced approach.
Invesco Income and Invesco High Income funds have been subject to investor withdrawals totalling £17.5bn as retail investors pooled their money into Woodford's new venture. AUM in the Invesco High Income fund has fallen from highs of £13.9bn in October 2013 to £7.5bn by end of April 2019.
Similarly, the Invesco Income fund has seen a big decline from £10.2bn to £3.3bn over the same period.
However, when including reinvested dividends and net of fees, Invesco High Income fund has delivered a total return of 16.5% and Invesco Income fund has returned 16.1% since Barnett took over as the lead portfolio manager, according to the Financial Times.
At the same, holdings in unquoted companies have dropped in Invesco High Income fund's assets and Invesco Income fund by 4% and 4.9% respectively.
However, Barnett and Woodford have overlapping holdings in multiple companies in their funds which has drawn scrutiny from investors.
According to the Financial Times, in April 2019 Woodford sold his 6% stake in listed property group NewRiver for £42m to Barnett in a deal conducted in the open market and this price was a discount of 10% to the net asset value.
Furthermore, as recently as February there was a significant overlap of 19% in common assets held between the Woodford Equity Income fund and the Invesco High Income and Invesco Income funds, according to Morningstar.
However, this level of overlap has been steadily decreasing from highs of 66% in June 2014.
Barnett commented: "My funds are more diversified [than Woodford's] and employ a more balanced portfolio approach.
"The Invesco High Income and Income funds offer plenty of value and clients are happy to support us. I am confident that my team will deliver the results that clients want."