Dealing in Neil Woodford's Equity Income fund has been suspended "with immediate effect and until further notice". The decision was taken to "protect the investors in the fund" following "an increased level of redemptions" (people trying to sell their holdings), according to Woodford Investment Management.
The suspension is designed to give Woodford time to "reposition" the unquoted and less liquid stocks (ie those which are harder to sell at short notice in order to meet investor redemptions) to more liquid investments. The firm promises to keep all investors "appropriately informed" about the suspension, including how long they think it will last.
The news of the suspension comes shortly after Kent County Council confirmed that it was pulling the £250m it had invested in the fund, which is one of the largest investments.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Woodford's flagship equity income fund has had a torrid few years, in which it has rarely been out of the news, due to one struggling holding or another, such as online estate agent Purple Bricks, or doorstep lender Provident Financial.
Assets in the fund currently stand at £3.71bn, nearly two-thirds down from their peak of £10.2bn two years ago. More than £500m has been withdrawn by investors in the past four weeks alone, which looks to have partly been prompted by rating agency Morningstar downgrading the fund from "bronze" to "neutral" at the end of May, and also confirmation by wealth manager giant St James's Place to the Financial Times that it was "closely monitoring" its relationship with Woodford. The value of holdings in the fund have fallen by 30% from the June 2017 peak.
Woodford's plight may serve as a reminder that just because a manager has done fantastically well with one fund, does not mean that they can easily recreate this success elsewhere(you can read more about this here).
If you hold Woodford's equity income fund, there's unfortunately not much you can do at the moment. Keep an eye on the firm's websitefor updates, and confirmation of when trading should start up again.
-
Rightmove: UK asking prices hit record high but Britain enters buyer’s marketHigher property taxes are stifling the typically-busy spring selling season and buyers are benefiting from more choice, meaning sellers must price their homes more competitively
-
Inheritance tax reforms: government urged to rethink curbs on rural reliefsMPs want the government to delay changes to inheritance rax reliefs for farmers
-
Neil Woodford’s back – but has he really learned anything?Opinion Disgraced fund manager Neil Woodford is planning a comeback. But he doesn’t seem to have learned much from his many mistakes. So why would anyone invest with him now?
-
Neil Woodford’s back – but sometimes sorry isn’t enoughAdvice Neil Woodford’s funds blew up in 2019. Now he is on the comeback trail. But his apologies are unconvincing.
-
Woodford investor? Your first payment is coming soonNews Private investors left stranded by the collapse of the Woodford Equity Income fund will soon be getting at least some of their money back. But they will have to wait a while longer to see how much more – if any – they will receive.
-
Neil Woodford continues to cast a shadow over his successor at InvescoFeatures Mark Barnett, former star manager Neil Woodford’s successor at Invesco, has applied the same formula, and is struggling.
-
Is it time to buy Patient Capital Trust?Features Neil Woodford’s Patient Capital Trust has been taken over by asset manager Schroders. The share price has surged - but should you buy in? John Stepek looks at the trust’s prospects.
-
Neil Woodford: no silver lining for his investorsEditor's letter Neil Woodford made every mistake it is possible to make as a money manager. And his investors have been stiffed. But however wrong it all went, Woodford never stopped taking the fees.
-
Woodford believed his own hype – now his investors are paying the priceFeatures Neil Woodford was once one of the brightest stars in Britain’s investment firmament. Then he came crashing down to earth. John Stepek explains what went wrong.
-
Woodford’s empire collapses – what happens to his investors now?Features With Neil Woodford getting his marching orders and his funds being shut down, John Stepek explains what it means for his former empire, and for those with money locked in.
