Fidelity International’s investment platform is barring investors from putting new money into the Woodford Income Focus fund as clients rush to take their money out following the suspension of Neil Woodford’s stricken equity income fund.
First reported by Telegraph Money, customers of its consumer platform, Fidelity Personal Investing, and advised platform, Fundsnetwork, will still be able to withdraw money from the Income Focus fund but have been prevented from buying new units.
The Woodford Patient Capital will not be affected by the move.
Woodford’s second Oeic has suffered a spike in redemptions following the gating of his £3.7bn Equity Income fund on 3 June. Assets in Income Focus have shrunk by a third this month, tumbling from £480m the day dealing suspended to £333m.
Hargreaves Lansdown is one such client that has been withdrawing money from the fund despite being one of Woodford’s most vocal cheerleaders previously. The D2C firm decided to pull Income Focus from its Multi Manager High Income fund which had an 8.2% stake in the fund.
A Fidelity spokesperson said: “FundsNetwork has decided to restrict new investments in LF Woodford Income Focus fund.
“We believe this is in the best interest of our platform clients, unless and until, uncertainties are resolved and we are not restricting withdrawals from Woodford Income Focus. The restrictions are a temporary and precautionary measure. This does not affect the Woodford Patient Capital investment trust.”
A spokesperson for Woodford Investment Management stressed that Income Focus is “a different portfolio” from Woodford Equity Income that doesn’t have any exposure to illiquid or unquoted securities and “consequently isn’t exposed to the same issues” as the gated fund.
“The fund was set up with the aim to deliver an income of 5p per share per annum, which it has achieved,” they said. “The fund mainly invests in companies that pay a dividend and, ever since its launch, the portfolio has contained a combination of large, mid and small sized companies.
“It’s positioned, he [Woodford] believes, for the economic and market environment that we’re likely to see over the medium and long term.”
Like Woodford’s frozen fund Income Focus has lost investors money since launch and has consistently landed among the worst performing funds in the IA UK Equity Income sector.
Over one-year it has returned -24.5%, considerably worse than the sector’s already disappointing -4.2% and even Woodford Equity Income, which is down 22.1%.
