Embattled stock-picker Neil Woodford is struggling to stem outflows from his remaining open fund, with Hargreaves Lansdown dealing a major blow by pulling £45m this week.
Woodford’s Income Focus Fund has shrunk by 25% since 3 June, when the fund manager made the shock decision to suspend trading in his flagship Equity Income Fund. The move trapped thousands of customers’ investments for at least 28 days and sparked an exodus from his last openly traded fund.
About £116m has been pulled from the Woodford Income Focus Fund over the last 10 days, while falling stock prices have led to further drops in the fund’s value. Data from the financial research firm Morningstar shows that the fund was worth £480m on 3 June. The Guardian understands that the fund was worth only £353m on Wednesday.
The investment platform Hargreaves Lansdown accounted for a significant portion of those redemptions. It closed its entire position in the fund when it pulled its £45m holding earlier this week.
Emma Wall, the head of investment analysis at Hargreaves Lansdown, said: “I can confirm that we have closed our position in Woodford Income Focus in the Hargreaves Lansdown Multi-Manager High Income fund this week.
“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. We have no other exposure to the Woodford Income Focus Fund across our Multi-Manager portfolio range.”
The move further distances Hargreaves Lansdown from Woodford, having historically sold and promoted the investment manager’s funds through its retail investment platform. It had already dropped its platform fees for clients affected by the suspension but is facing further scrutiny by the Financial Conduct Authority and the influential treasury select committee.
The Conservative MP and committee chair, Nicky Morgan, wrote to the Hargreaves boss Chris Hill earlier this week, asking how much money the firm had made in fees from customers who had invested in Woodford’s fund.
At the end of March, Hargreaves’s customers accounted for about £2bn of £10.6bn under Woodford’s management.
Woodford declined to comment.
