Emma Wall, Head of Investment Analysis 1 July 2019
Trading in the Woodford Equity Income Fund remains suspended. Link Asset Services (the fund’s Authorised Corporate Director) confirmed it will be renewing the suspension in the best interests of all investors. While trading remains suspended we will continue to waive our platform fee for the Woodford Equity Income fund.
In a statement on Monday 1 July, Link said:
“As set out in our previous letter, dealings in the Fund were suspended after we concluded that redemptions had reached a level whereby the Fund would no longer be able to continue to meet redemption requests without prejudicing the interests of any investor. We believe that, as a “forced seller” of its assets to meet redemptions, the values received by the Fund for such assets may have been adversely impacted and the Fund might not have received full value from such sales.
After consideration of all current circumstances relating to the Fund, we have, in conjunction with Northern Trust Global Services SE, UK Branch, the Fund’s Depositary, concluded that it remains in the best interests of all investors in the Fund to continue the suspension of the issue, cancellation, sale and redemption of shares in the Fund.”
Link confirmed on Monday that the manager, Woodford Investment Management, is using this time while trading is suspended to re-position the portfolio into more easily tradable stocks, stating:
“The Fund’s investment manager, Woodford Investment Management Limited (“Woodford”), has been taking steps to reposition the Fund’s portfolio to realise the unquoted and less liquid stocks and invest in more liquid investments. This has continued since dealings in the Fund were suspended and Woodford continues to invest in opportunities in order to meet the Fund’s investment objectives.”
We were informed on Monday 1 July by Link of their intention to not allow trading in the fund to resume at this stage.
Link has confirmed that they will continue to monitor the fund on a daily basis to assess the on-going dealing suspension. They have committed to formally reviewing the suspension at least every 28 days and will inform the FCA of the review and any change to the information given to shareholders.
When will I be able to trade the fund?
We are in regular contact with Link and are pushing for insight into when the fund will re-open. We’ll be in touch as soon as we have any further information.
What are you doing now?
We are speaking with the regulator, Woodford and Link to work towards a swift resolution for all investors, not just those invested through Hargreaves Lansdown.
We have called for Woodford to waive the management fee on the Equity Income fund while investors can’t access their investments. This is the right thing for them to do in our view.