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Woodford Equity Income – suspension extended until December

In our latest update we look at today’s statement from the fund’s Authorised Corporate Director and explain what it means for investors in the fund.

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.

Link Asset Services (the fund’s Authorised Corporate Director) confirmed today that trading in the Woodford Equity Income Fund will likely be suspended for another four months until early December.

It is extending the suspension in the best interests of all investors, to give the fund manager time to reposition the portfolio in a measured and orderly way. While trading remains suspended we will continue to waive our platform charge for the Woodford Equity Income Fund.

In a statement on Monday 29 July, Link said:

“We have considered various alternatives and have decided that the best option in the interests of all investors is for the suspension of dealings to continue. This has been agreed with the Depositary and we have informed the Financial Conduct Authority accordingly.

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.”

Link added that the suspension extension gave the fund manager, Woodford Investment Management, time to address the liquidity of the fund, stating that:

“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.

We have concluded that this approach would represent the best outcome in terms of value, time and equal treatment for all investors. Importantly, it would allow all investors to choose, whether they wish to remain invested in or to withdraw their investments from the Fund.

The work that is underway to re-position the portfolio is designed to ensure that there are liquid assets available for these purposes, while continuing with the objectives and investment strategy of the Fund.”

We were informed on Monday 29 July by Link of their intention to keep the fund closed to trading for another four months.

Link has confirmed that they will continue to monitor the fund’s portfolio, and says progress has been made. Link is consulting with specialist professional advisers so that they can ensure decisions are taken in the best interests of investors. While the guidance suggests the fund will be closed until early December, Link have committed to formally reviewing the suspension every 28 days and will update investors with any progress at those points. We will continue to keep you updated.

When will I be able to trade the fund?

Link has today indicated that the fund will likely be suspended until the beginning of December.

What are you doing now?

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.

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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