Under new management! Disgraced Neil Woodford’s smaller Income Focus fund WILL reopen for investors on February 13
- The £270m fund has been overhauled by Aberdeen Standard Investments
- It is the smaller sister to Woodford’s flagship Equity Income fund
- Applications to buy or sell shares can be made from midday on 12 February
- They will be processed based on their value 24 hours later.
Neil Woodford: Sacked from his flagship Equity Income fund, and he later resigned as manager of both the Income Focus fund and the Patient Capital Trust
Investors in Neil Woodford’s Income Focus fund will regain access to their cash at midday on 13 February 2020, when it will be reopened by administrators.
The £270million fund has been overhauled since being taken over by Aberdeen Standard Investments at the end of last year.
It is the smaller sister to Woodford’s flagship Equity Income fund, which collapsed last year leaving hundreds of thousands of people facing losses.
That fund is being wound up, and investors have just been told how much cash they will get in a first round of payouts issued this week.
It also emerged that the process has cost £5million so far, with another £5.3million yet to be paid out, and further bills pending for the sale of the less liquid part of the portfolio.
Meanwhile, the new Income Focus fund managers have been working to re-position investments into a portfolio that they consider ‘best placed to add value for investors’, according to a letter sent today.
‘We are now of the opinion that the Fund’s portfolio is in a position to enable the fund to re-open on 13 February 2020,’ said administrator Link Asset Services.
‘With effect from that date suspension of dealings in the shares of the fund will be lifted and it will again be possible for you to buy and sell shares in the fund.’
Applications to buy or sell shares in the renamed ASI Income Focus Fund can be made from midday on 12 February, and will be processed based on their value 24 hours later.
Link, the fund’s depositary Northern Trust, and Aberdeen Standard have all waived fees for the period from 31 December to 31 May 2020, the administrator reiterated.
The resulting savings to the fund will offset some of the costs associated with repositioning the portfolio, it said.
This has been carried out by Aberdeen Standard’s Charles Luke and Thomas Moore, supported by a 16-strong UK equity team.
The objective of the fund was officially changed on January 23. Previously, Woodford sought to generate a yield higher than the average yield of the FTSE All Share Index over a three-year rolling period. Aberdeen Standard is now aiming to deliver an income of 5p per share a year.
The disgraced Woodford was sacked by Link from his flagship Equity Income fund, and he later resigned as manager of both the Income Focus fund and the Patient Capital Trust. The latter is now being run by Schroders Investment Management.
Ryan Hughes, head of active portfolios at AJ Bell, said of today’s announcement: ‘This news will bring welcome relief to those investors who have been stuck in the fund since it suspended back in October.
‘Investors will now need to consider whether they are happy with the new management of Aberdeen Standard Investments who have said they will operate a more concentrated investment portfolio and a different yield target.
‘This means the fund re-opens with a totally different portfolio to when it suspended.
‘For those that do want to consider alternatives, possible funds to consider are the Troy Trojan Income fund and the Threadneedle UK Equity Income fund with both having a focus on larger companies and currently providing a yield of 4 per cent per annum.’
Investment platform Hargreaves Lansdown, which has come under heavy fire for promoting Woodford’s funds before the collapse of his empire, reported a decline in business growth today.
New customer business fell by nine per cent to £2.3billion in the second half of last year, but revenues and pre-tax profits increased.