Invested with Neil Woodford? Here are 3 things you need to know

There’s a lot of information for Neil Woodford investors to process right now.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

To say that it has been an eventful week in the investment management industry would be a huge understatement. Neil Woodford – who was once known as the most successful stock picker in Britain – has been sacked as the fund manager of the Woodford Equity Income Fund and it has been announced that the fund will be wound up. You can read more about this here.

Given this shock development, there’s a lot of information for investors to process right now. With that in mind, here are three things you need to know if you’re invested in a fund that was run by Neil Woodford.

Woodford Investment Management is closing down

While Woodford initially stated that the decision to sack him as fund manager of his flagship fund was one that he could not accept, the situation changed dramatically in the space of just a few hours on Tuesday.

Not only did Woodford announce that he would be standing down as manager of his other two funds, the Woodford Income Focus Fund and the Woodford Capital Patient Trust, he also advised that his firm Woodford Investment Management would be closing down.

We have taken the highly painful decision to close Woodford Investment Management,” Woodford said. The reason? Without the huge fees that the Equity Income Fund generates (around £455,000 per week), it’s simply not viable to run the firm, according to the fund manager.

The Income Focus Fund has been suspended

Since then, the Income Focus Fund has been suspended in the same way that the Equity Income Fund was suspended in June. The fund’s Authorised Corporate Director, Link Asset Services, made the decision to halt trading in the fund in order to prevent investors rushing to withdraw their money, which could impact the running of the fund.

Link has advised that the fund will be suspended until further notice but said that it expects to provide an update in the next few weeks.

Meanwhile, the Woodford Patient Capital Trust, which is listed on the London Stock Exchange, is still trading. However, its share price has fallen to an all-time low. According to a statement on Woodford’s website, the board of directors is in advanced discussions about the ongoing management of the company’s portfolio and expects to be in a position to announce details of the new management arrangements shortly.

Return of money

Finally, if you’re wondering when you’ll get your money back if you’re invested in the Woodford Equity Income fund, it’s not great news.

Link has advised that the liquidation process will begin on 17 January 2020. However, liquidating the entire fund is likely to take time. According to some experts, it could take over a year to fully close the fund and return money to investors. Unfortunately, you could be waiting a while to get your money back.

Additionally, investors should also be aware that they may receive back less than they invested as the fund has continued to underperform recently. All in all, the Woodford situation is a complete debacle and not a good look for the investment management industry.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

After it crashed 25%, should I buy this former stock market darling in my Stocks and Shares ISA?

Harvey Jones has a big hole in his Stocks and Shares ISA that he is keen to fill. Should he…

Read more »

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

How’s the dividend forecast looking for Legal & General shares in 2025 and beyond?

As a shareholder, I like to keep track of the potential dividend returns I could make from my Legal &…

Read more »

artificial intelligence investing algorithms
Investing Articles

Could buying this stock with a $7bn market cap be like investing in Nvidia in 2010?

Where might the next Nvidia-type stock be lurking in today's market? Our writer takes a look at one candidate with…

Read more »

Investing Articles

Is GSK a bargain now the share price is near 1,333p?

Biopharma company GSK looks like a decent stock to consider for the long term, so is today's lower share price…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

Could December be a great month to buy UK shares?

Christopher Ruane sees some possible reasons to look for shares to buy in December -- but he'll be using the…

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

Sticking to FTSE shares, I’d still aim for a £1,000 monthly passive income like this!

By investing in blue-chip FTSE shares with proven business models, our writer hopes he can build sizeable passive income streams…

Read more »

Growth Shares

BT shares? I think there are much better UK stocks for the long term

Over the long term, many UK stocks have performed much better than BT. Here’s a look at two companies that…

Read more »

British Pennies on a Pound Note
Investing Articles

After a 540% rise, could this penny share keep going?

This penny share has seen mixed fortunes in recent years. Our writer looks ahead to some potentially exciting developments in…

Read more »