Neil Woodford’s flagship fund, the Woodford Equity Income Fund, will remain suspended until December, Link Fund Solutions, the Authorised Corporate Director (ACD) of the fund, said in a letter issued yesterday.

In the letter, the ACD noted it had considered “various alternatives” and has decided that the best option is for the suspension of the dealings to continue. According to the firm, this decision is in the best interests of all the investors and has been agreed with the Depositary.

The Financial Conduct Authority (FCA) has also been made aware of the decision.

The letter stated: “We anticipate that the suspension of dealing is likely to last until early December while we implement the strategy to re-position the portfolio in order for the Fund to be re-opened at that time, and which is conditional upon achieving the target fund profile.

“In our view, this is a realistic amount of time for Woodford to complete a measured and orderly re-positioning of the Fund's portfolio of assets ensuring that there is adequate liquidity whilst preserving or realising the value of the assets.”

On its decision, the ACD said this approach would “represent the best outcome in terms of value, time and fair treatment for all investors”, while also noting it would allow all investors to decide whether they wish to remain invested in or to withdraw their investments from the fund.

Commenting on the decisions, AJ Bell head of active portfolios Ryan Hughes said: “This announcement at last gives a timeframe for investors in the Woodford fund, with Link saying that the fund suspension is likely to last until early December.

“This gives much-needed clarity for investors, but they are likely to remain concerned. The fact that Link and Woodford have given a timeframe suggests they have some confidence in the fund re-opening in December, but this will still mark six months of fund suspension that investors have had to navigate.”

He added that the performance figures do not provide “much of a boon” for investors, with the fund down 3.3 per cent since it closed on 3 June, compared to the FTSE All Share return of 5.3 per cent during that time. Furthermore, the Woodford has increased just 1 per cent in the past month, while the market has experienced a rise of 1.8 per cent.

“The latest comments from the Patient Capital investment trust board will give further pause for investors in Woodford’s funds, and show a hint at the potential tension between the board and Woodford Investment Management. But as investment trust boards are independent it’s good to see them fulfilling their responsibilities as independent directors,” Hughes concluded.

Share Story: