Managing director Jason Hollands said the decision was driven by the fund’s disappointing performance and its high exposure to earlier stage-growth companies, some of which are illiquid unlisted businesses.
In May, Charles Stanley booted Woodford Equity Income from its buy list over similar worries.
The Woodford Equity Income fund was down -11.14% in the year leading up to March, when it was dropped by Tilney. The Investment Association UK Equity Income sector returned 2.79% over the same period.
This year, the fund has endured share price blow-ups from several big holdings like American biotech firm Prothena, professional outsourcer Capita and subprime lender Provident Financial.
It was also ejected from the IA UK Equity Income sector for failing to meet the sector’s yield requirements.
Tilney was also concerned about Woodford’s cyclical bias, according to Hollands.
Woodford has added discounted housebuilders and banks like Lloyds to the fund as part of his contrarian, bullish view on the UK domestic economy post-Brexit.
Roughly 42% of the portfolio is in financials.
“In our view this makes the fund less defensive in nature and doesn’t chime with our current outlook,” Hollands said.
Earlier this year, Tilney drastically cut the number of funds in its portfolios from 70 to 30 in an effort to shore up better performance by eliminating managers it saw as “low-hanging fruit”.
Woodford Investment Management declined to comment.