Woodford fund gating extended by 28 days

Trading in the Woodford Equity Income Fund has been suspended for a further 28 days. It was initially gated at the beginning of June when outflows had reached such a level that they could jeopardise clients still invested in the fund.

Following a review, the authorised corporate director (ACD) of the fund has concluded that “it remains in the best interests of all investors in the fund to continue the suspension of the issue, cancellation, sale and redemption of shares in the fund”.

According to Link, the ACD, Woodford has been attempting to reposition the fund’s portfolio “to realise the unquoted and less liquid stocks and invest in more liquid investments”. This has been ongoing since trading was first suspended on June 3.

The gated equity fund has been deemed the worst performing equity fund since the UK’s referendum to leave the EU, with a rate of return of nearly minus 20%.

According to research by investment service provider Willis Owen, the LF Woodford Equity Income fund has lost more than three times the amount of its nearest competitor since the 2017 Brexit vote, called by former UK prime minister David Cameron.

Link has said that it will monitor the situation of the fund on a daily basis to evaluate whether continuing the suspension of trading is justified.

One of the UK’s largest financial advisers, Hargreaves Lansdown, has said that it is speaking with the financial regulator, Woodford, and Link “to work towards a swift resolution for all investors, not just those invested through Hargreaves Lansdown”.

The firm has also called upon Woodford to waive the management fee on the equity income fund as long as investors cannot access their investments. “This is the right thing for them to do in our view”, it said.

Neil Woodford has refused to budge on waiving the fund’s fees, which have amounted to around £60,000 (€67,000) a day since the suspension.

©2019 funds europe

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