- Fund information
- 2 minute read
Dealing in Woodford Equity Income fund has been temporarily suspended and subsequently removed from our Close 50 list.
Our Research Team will maintain contact with Neil Woodford and provide updates when more information becomes available.
Who suspended this fund and why?
Following concerns about redemptions, dealing was suspended by Link Fund Solutions (Authorised Corporate Director of the fund) to protect existing investors. The fund has seen sustained outflows following a period of poor performance, still at £3.7billion but down from £6.8billion last year.
Link Fund Solutions are an independent company who act in line with FCA regulations and in the best interest of fund unit holders. Over the past couple of weeks there has been a spike in redemptions and they took action to protect investors who wish to remain in the fund, who could otherwise be negatively affected by fund redemptions.
What does suspended mean?
Investors cannot buy or sell units in the fund. This also applies to those who make regular payments into the fund, which are not permitted during the suspension period.
What if I hold Woodford Equity Income fund?
If you currently hold this fund you will not be able to buy or sell units until the suspension has been lifted.
On Friday 31 May the last available unit price was 86p for those invested in the income version of the fund and 100.89p for those in the accumulation class. The value of the fund will still be based on the price of the underlying holdings, however, you won’t be able to access your investment during this time.
At such time that the suspension is lifted, trading will be resumed. The price of the fund will be dependent on the value of the underlying assets at the time trading is reinstated. In the event the share price of those stocks has risen, your investment will be worth more than it is today. If the value of those underlying assets has fallen, your investment will do too.
How long will the suspension last?
Initial expectations were that the suspension would last for at least 28 days. Link Fund Solutions has formally reviewed the fund and made the decision to continue with the suspension of investor dealing in the Equity Income fund, to ensure investors’ interests are protected. Links are required to conduct a review of the fund at least every 28 days to keep investors informed however it is likely the fund will remain suspended until early December.
We will communicate to you again once we have further information. Once the suspension is lifted, investors can buy or sell their holdings. The price of the fund will be dependent on the value of the underlying assets at the time trading is reinstated.
What if I make monthly contributions into this fund?
If you have a regular direct debit set up to automatically invest in this fund, this will not be invested during the suspension period. All contributions will be held as cash in your account.
What about my income?
The treatment of dividend income from the fund will be unaffected by the suspension. Those with accumulation shares will continue to see income added to the capital element of the share class and reflected in the net asset value. Those holding income shares will continue to receive their income according to the existing quarterly payment schedule.