Hargreaves Lansdown leads exodus from second Woodford fund
Hargreaves Lansdown has led an exodus from Neil Woodford’s Income Focus fund adding to the trader’s woes following the suspension of his flagship investment vehicle.
Woodford’s Income Focus fund has shrunk by more than £100m in less than two weeks, according to data from Morningstar.
Read more: Woodford issues apology to suspended fund investors
Assets have fallen to £371.3m from the £494.2m recorded at the end of last month, in a sign that the fall out from the suspension is affecting the investment manager’s other funds.
Woodford froze trading in his Equity Income fund following a wave of outflows and a period of underperformance. Assets in the fund fell from highs of £10.2bn two years ago to less than £4bn last week.
Bank of England director Alex Brazier warned today that suspending funds can be a “double edged sword”, with the threat prompting investors to rush to the front of the redemption queue.
Former Woodford-backer Hargreaves Lansdown has withdrawn £45m as it closed its entire position in the Income Focus fund. The fund supermarket’s share price has fallen more than 16 per cent following the suspension due to its close relationship with the manager.
“I can confirm that we have closed our position in Woodford Income Focus in the Hargreaves Lansdown Multi-Manager High Income fund this week,” Hargreaves Lansdown head of investment analysis Emma Wall said.
“We have no other exposure to the WIFF fund across our MM portfolio range.
“Last week, we communicated to clients why we were removing the fund from the Wealth 50 list of our favourite funds, as we no longer had conviction in the fund.”
Woodford’s listed investment trust, Patient Capital, has also suffered following the announcement.
Shares in the London-listed investment trust have fallen more than 20 per cent since Woodford’s trust was suspended.
The fund manager has come under pressure to waive fees while investors are unable to withdraw their money from the funds.
Read more: Opening the fund-gate: How to prevent the Woodford saga from happening again/
Financial Conduct Authority Andrew Bailey, treasury committee chair Nicky Morgan and former business secretary Vince Cable are among those to have called for Woodford to cancel the fund management charges.
Woodford issued a second apology to investors on Tuesday, saying he had been disappointed with the fund’s performance “for some time”.