Shares in Neil Woodford’s listed fund continue to tumble in tough week for former top stock picker
Shares in Neil Woodford’s Woodford Patient Capital Trust fell nearly four per cent this morning continuing a torrid week for the former star trader.
Shares in stockbroker Hargreaves Lansdown also continued to slide today, falling nearly two per cent.
Trading in the stock picker’s flagship Woodford Equity Income Fund was suspended on Monday following a spike in withdrawals.
Nicky Morgan MP, chair of the Treasury Committee, today called for Woodford to suspend management fees for his fund while trading was suspended.
“Investors in the Woodford Fund have been locked out of accessing their cash. Yet it has been reported that Mr Woodford is taking in nearly £100,000 in management fees a day.
“The suspension of trading has provided Mr Woodford with some breathing room to fix his fund; he should afford his investors the same space and waive the fund’s fees while the fund is suspended.
“The FCA has rightly said that it is closely watching the fund. The Treasury Committee will no doubt raise this troubling episode, and what lessons can be learnt, when we take evidence from the FCA and Bank of England,” she said.
Yesterday Hargreaves Lansdown waived its platform fee for the fund while dealing is suspended, and said it had put pressure on Woodford Investment Management to do the same.
Emma Wall, head of investment analysis at Hargreaves Lansdown, said: “We have taken the decision to waive the platform fee on the Woodford Equity Income fund while dealing is suspended, effective immediately. We do not think it is fair to charge our clients a fee while they cannot trade in the fund.”
The Financial Conduct Authority (FCA) said yesterday it was examining the circumstances around the fund’s decision to list some of its assets on the Guernsey stock exchange.
According to EU rules, funds can only hold up to 10 per cent of unlisted securities. The decision to list assets on The International Stock Exchange (Tise) in Guernsey was a way of staying within that limit.
The FCA said it had been “in discussions” with Link Funds and Tise “regarding the circumstances around the listing of certain [parts] of the fund’s assets on that exchange”.
On Tuesday Woodford apologised to investors in a Youtube video after they were blocked from withdrawing money from his fund.
“As difficult a decision as this is, and clearly frustrating for you, our investors, we felt that this was necessary to protect your interests,” Woodford said.
“The situation we confronted was that we were seeing a lot of outflow in the portfolio.
“As a result of that what we were seeing in a way was the stock market anticipating the fact that we would have to be sellers of stocks to meet those redemptions.
“We felt the prices that we would be able to achieve in order to meet those redemptions would be disadvantageous for our investors.”