Call Richard Cook: 07770 575 122

email: richard@theinvestmentandretirementcoach.co.uk

Woodford UK Equity Income Fund: Update 25/06/19

Dealing on this fund was suspended for an initial 28 days on 23/06/19 but I would not be at all surprised to see the suspension extended beyond the initial 28 days.

In the last month things have gone from bad to worse for Woodford. Not only did Hargreaves Lansdown remove his funds from the Wealth 50 list they sold their entire Multi Manager Fund holding in his Income Focus Fund. If that doesn’t indicate a total lack of faith in his ongoing investment management capability and recovery prospects I don’t know what does.

If they take the same view about the UK Equity Income Fund, when dealing resumes, I hate to think what potential sales of £539 million (their total holding in the Multi Manager Funds) will do to the fund.

St James Place, one of Woodford’s other main supporters, have also removed him as the manager of their flagship £3.5 billion Income fund.

So the big question is – what will you do about your remaining holding in the Woodford UK Equity Income Fund?

If his main supporters have already lost patience and are selling out are you staying put when dealing resumes?

I really don’t know what the future of the fund looks like but it seems to me that the risks of staying in are greater than the rewards of any potential recovery.

Waiting and seeing what happens next doesn’t seem a good strategy to me. I can’t give personal advice and everyone’s personal circumstances and other investments will be different but in my view either the fund should be sold IMMEDIATELY dealing resumes or you should you accept that you are in for the long term.

Hargreaves Lansdown have their own internal investigation going on. The Financial Conduct Authority have launched an investigation and the House of Commons Finance Select Committee are already asking questions. It is likely to be some time before we know whether Hargreaves Lansdown clients who decided to invest/remain invested based on the Wealth 150/50 recommendations have any realistic possibility of making a claim.

I will continue to keep a close eye on everything which is going on and will issue updates from time to time.


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