Woodford flagship fund continues suspension - AJ Bell comment

Ryan Hughes
1 July 2019

“It comes as little surprise that the Woodford Equity Income fund has not been able to re-open after its initial 28 day suspension and I don’t think anyone ever believed that it would be able to at this stage. There are also no hints that the suspension is likely to end any time soon. While it would appear that progress is being made in adjusting the portfolio and moving away from the illiquid names, as evidenced by stock market announcements on particular holdings, there is clearly further to go,” comments Ryan Hughes, head of active portfolios at AJ Bell.

“Performance since the suspension 4 weeks ago has continued to disappoint with the fund falling 4% based in the indicative price provided by Link, the fund administrator, while the FTSE All Share is up over 3%, perhaps indicating how the selling pressure is impacting the price of the small and illiquid holdings, despite Woodford’s most recent comments otherwise. 
“After the shock of the initial suspension, it is imperative now that Woodford communicates clearly with investors as to the progress made and also how long the suspension is likely to remain in place. While this is difficult given liquidity is a moving target, investors deserve to be kept fully informed as the portfolio is repositioned.”

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