The former LF Woodford Income Focus fund is set to reopen under new management on 13 February, giving existing investors the first opportunity to withdraw their money since it was suspended in October. However, new manager Aberdeen Standard Investments has overhauled the fund in the hope that current customers will be convinced to stay. 
The renamed LF ASI Income Focus fund will now be overseen by Thomas Moore and Charles Luke, and will look different to when it was run by previous manager Neil Woodford (pictured).
The fund underwent a transition process aimed at meeting new investment goals: providing a high level of income and capital growth.
Under Moore and Luke, the fund will target a yield higher than the FTSE All Share index over rolling three-year periods.
It will now take a high-conviction approach to management, investing in a liquid portfolio of 30 to 40 ‘best ideas’.
Another key element will be sustainability, as Moore and Luke aim to prioritise companies with sustainable income and capital growth, albeit with attractive yields.
The managers have also improved the liquidity profile of the portfolio, increased sector diversification and sold down structurally challenged companies.
“Looking ahead, we see a range of well-capitalised UK domestic stocks with the potential to perform strongly following a long period of subdued investor sentiment, including Close Brothers, SSE and Assura,” the managers noted.
“Alongside these domestic holdings, which are now all held in the portfolio, we see potential for internationally exposed stocks with robust dividend prospects such as Coca-Cola Hellenic, TUI Group and Ashmore.
“Similarly, these three companies are now part of the repositioned portfolio. From an income perspective, and in line with previous communications, we are targeting the delivery of an attractive level of yield with good growth potential.”
Nevertheless, the transition process has led to some short-term underperformance with the fund trailing the FTSE All Share by 4 per cent during January.
Performance of fund vs sector & benchmark in January 2020
Source: FE Analytics
There were some more illiquid holdings that were more difficult to dispose of, such as Honeycomb Investment Trust, which was sold at a discount.
Other holdings didn’t warrant a place in the portfolio, such as Card Factory, after poor Christmas trading saw the stock underperform.
Top holdings in the portfolio now include coach operator National Express Group, packaging company Mondi, infrastructure specialist John Laing Group, British American Tobacco and car retailer Inchcape.
“We recognise that investors in the Income Focus fund have endured some frustration over recent months,” said Andrew Millington, head of UK equities at Aberdeen Standard Investments.
“Looking into 2020 and beyond, I believe the prospects are significantly brighter. Many investors are taking a fresh look at the UK equity market, which offers a breadth of compelling stock-specific opportunities in both yield and total return potential.”
Adrian Lowcock, head of personal investing at Willis Owen, said the first issue is whether there will be large outflows when the fund reopens. 
“While the fund wasn’t at the centre of the Woodford debacle, investors have been trapped for months and have been naturally concerned with poor performance and accessing their money,” he explained. “However, the fund has been restructured and is now more liquid, which is important.”
He added: “The new managers are, through no fault of their own, not the investors’ first choice for running an income fund, but they are well supported by a strong brand, UK team and resources, which mean this is less of a one-person show than it was under the previous managers.
“Moore has recently suffered poor performance in the Aberdeen Standard Equity Income and the ASI UK Income Unconstrained Equity funds as his value style has been out of favour.
“This has been compounded by some recent stockpicking issues which have hit his performance.”
Ryan Hughes, head of active portfolios at AJ Bell, said it was clear that the fund has undergone a complete overhaul just by looking at the top-10 holdings, while there have been significant sector-allocation changes too.
He added the bad news is that the overhaul of the fund has come with significant underperformance of the FTSE All Share and increased transaction costs during the switch to new management.
“Many will see this as a final kick in the teeth, having suffered from poor performance and then had to pay again for the privilege of exiting the stocks,” he said.
Hughes added investors will need to decide whether to keep the revamped fund or move on.
“Those investors who originally invested in the fund for income need to be aware that it has changed its income target from ‘5p per share per annum’ to ‘a yield higher than the average yield of the FTSE All Share index over a rolling three-year period’,” he said,
“In reality, this means the income paid on the fund is likely to be lower going forwards than before.”