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HL Multi-Manager Funds - how does the Woodford closure affect your investment?

We look at how the news about the Woodford Equity Income fund being wound up impacts the HL Multi-Manager range.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Yesterday, Link Asset Services announced it would not be re-opening the previously suspended Woodford Equity Income Fund. Instead the Fund will be wound up. Later in the day, Woodford Investment Management also confirmed it would be closing for business. Today Link announced that the Woodford Income Focus Fund has been suspended. This fund is not held in any of the Multi-Manager portfolios.

The wind up means that the investments in Woodford Equity Income will be sold, and resulting cash will be returned to investors. Link expects the process to begin in January 2020. The money investors get back will be determined by the ability to sell the assets and the price that is achieved for them.

Woodford Equity Income is one of more than 60 funds that make up the 10 Multi-Manager portfolios.

While investors in the Woodford Equity Income Fund cannot currently buy or sell units, trading in the Multi-Manager funds is not restricted and you can buy and sell the portfolios as normal.

Our Multi-Manager funds are, by their very nature, diversified. We pick from a broad range of underlying funds. These funds, in turn, invest in a wide range of underlying investments. As a result, the impact of one of these funds on the Multi-Manager portfolios’ performance is limited.

The total invested in Woodford Equity Income is 5.37% of the total value of our Multi-Manager funds at the end of September. It is held in six of our portfolios; it makes up 3.68% of Balanced Managed, 4.06% Special Situations, 11.03% of Income & Growth, 6.17% of Equity & Bond, 6.06% of UK Growth and 2.3% of Strategic Assets. Please see the fund factsheets for more details.

What happens next?

Link expects the winding up of the Woodford Equity Income Fund to begin 17 January 2020, with the first payment to investors anticipated by the end of that month. A fund winding up means that it is closed and the resulting money will be returned in instalments as the assets are sold off.

You do not have to take any action – we have a number of exceptional equity income fund managers to choose from and will deploy the cash as it comes in as quickly and efficiently as possible. We will make decisions on where the best value can be found for our clients at the time.

As always we’re determined to deliver the best long-term outcomes for investors in our Multi-Manager funds. We will keep you updated of any significant changes.

The HL Multi-Manager Funds are managed by our sister company HL Fund Managers Ltd.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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