LF Woodford Equity Income fund suspension of dealing

Posted by Liz Rees in Fund and industry updates category on 04 Jun 19


On Monday 3rd June 2019 Woodford Investment Management Limited announced that it would be suspending dealing in units in the LF Woodford Equity Income fund, with immediate effect and until further notice.

The company has taken this decision, following an increased level of redemptions. The intention is to protect investors in the fund by giving Mr Woodford sufficient time to reposition the portion of the portfolio held in unquoted and less liquid stocks, into more liquid ones.

During the suspension no requests to sell, buy or transfer units in the fund will be accepted.

Willis Owen Comment

We wrote to you recently to let you know Morningstar had downgraded the fund to a neutral analyst rating. This was in response to the lengthy period of underperformance, outflows from the fund, and the ongoing exposure to unlisted stocks which do not produce dividends.

Since then, there have been a number of negative press articles, plus a profit warning from Kier Group, which has precipitated the selling pressure on the fund. While disappointing, we do believe this is the correct course of action as it will give the manager time to reposition without the pressure of further sellers. At present it is not clear how long the fund will be suspended for and we encourage investors to remain patient.

We will keep you up to date on the status of the fund, the progress Woodford makes on repositioning the portfolio, how long the suspension may last, and when we hear it will be lifted.

Please note that trading in the LF Woodford Income Focus fund and Woodford Patient Capital Trust is unaffected by this suspension.

Important InformationPast performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Nothing in this article is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment.

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