Advice for investors as Woodford fund remains locked

Well-known stockpicker Neil Woodford’s flagship fund remains locked for investors, it has been confirmed.

 

The extension, announced as the initial 28-day suspension expired, means investors will have to wait at least another month to withdraw their money.

Investors in the Equity Income Fund have now not been able to access their money since 3 June, 2019.

Withdrawals were frozen after rising numbers of investors asked for their money back.

What can investors do?

In short, nothing for now. Investors have no choice but to wait for the suspension to be lifted.

At that point Mr Woodford is likely to make changes and reconstruct his investment portfolio and, at Geens Financial Planning Ltd, we would suggest that should be the point when investors carry-out their own review before making a decision on whether to stay with the fund or exit it.

In reality, investors should regularly review any investments they have and the Woodford fund issue is perhaps a timely reminder for people to do just that,

What happened to the Woodford fund?

When the fund launched five years ago, Mr Woodford’s previous record as a leading investment manager, meant thousands of people  trusted him with their money.

At its peak, the Woodford Equity Income Fund managed £10.2bn worth of assets, such as local authority pension funds.

In its first year, there were returns of 18% on investors’ money, compared with an average rise of only 2% on the London Stock Exchange at the time.

However, this was followed by struggles in the last couple of years.

As a result, the fund has brought very little return for investors who have been in it throughout. Figures from research and ratings agency FE Analytics show the fund has made a total return of 0.36% since its launch.

Worries over this has led to many investors pulling away from the fund, ultimately leading to the fund being suspended and frozen while restructuring takes place.

Concerns have been raised that management fees have continued to be charged to customers and Nicky Morgan MP, who chairs the Parliamentary Treasury Committee has said fees should be halted while trading in the fund remains suspended.

Meanwhile, other funds within the Woodford stable continue to operate, although Woodford Patient Capital has seen its shares suffer in the wake of the income fund suspension.

How can Geens Financial Planning Ltd help?

Geens Financial Planning Ltd are regulated by the FCA and operates independently from Geens Chartered Accountants. It offers a comprehensive lifetime wealth planning and investment service.

We can provide detailed valuations of your investment portfolios, supplying analytical information of different products and investments, ranging from investment returns to illustrations on competitive life assurance or annuities.

 

As indicated, investors can only sit and wait if they currently have money invested in the suspended Woodford fund. However, we are on hand to support your investment review and give advice on a full range of financial planning services.

Please contact Karen Staley, Director,  karen.staley@geens.co.uk.