Woodford Investment Management has moved to withhold disclosing the Woodford Equity Income’s top ten holdings, following confirmation that the embattled fund would remain suspended until December.
The fund, which is currently heading into its fourth month of suspension, is currently "on track" to reopen in December as planned, its Authorised Corporate Director (ACD) Link Asset Services said on Friday (23 August), but will remain gated for now.
In the wake of the announcement an update on Woodford's website said it had decided, "after consultation with Link", to "to withhold disclosing the top ten holdings while the fund is suspended".
It explained it remains "committed to operating the fund in a way that best protects the interests of investors, both for those who wish to remain invested and for others who will seek to withdraw from the fund when the fund reopens."
In a previous update Woodford said the fund, which was once heralded for its high levels of transparency, would have to be more opaque in the future.
Link's Friday update noted that Woodford Equity Income has lost 11.2% from 2 June to 21 August, during which time its benchmark FTSE All Share Total Return gained 1.5%.
Woodford's latest website reiterated that when the fund reopens, it will do so with "a much more liquid portfolio…that reflects the same investment strategy".
It added: "The portfolio will continue to be focused on undervalued companies, but the majority of them will be FTSE 100 and FTSE 250 index constituents. Neil and the team continue to make progress in this regard.
"To date, more than 80% of the proceeds from share sales since suspension have been reinvested in FTSE 100 companies."
Woodford Investment Management has been offloading assets during the suspension in efforts to overcome liquidity issues and meet investor redemption requests.
For its part, Link's role in the fund's gating has led to a FCA review of the ACD market.
Woodford said: "We appreciate that the ongoing suspension of the fund will be causing you inconvenience and anxiety.
"The decision to continue with the suspension is to ensure investors' interests are protected.
"It affords Neil and the team the required time to execute the changes to the portfolio that we have outlined previously, in order to deliver the best possible outcomes for you, our investors."
28 days earlier
Link announced on 29 July that Woodford Equity Income would remain gated until December in order to provide "a realistic amount of time for Woodford to complete a measured and orderly re-positioning of the fund's portfolio".
"We have considered various alternatives and have decided that the best option in the interests of all investors is for the suspension of dealings to continue," the letter said.
"We anticipate that the suspension of dealing is likely to last until early December while we implement the strategy to re-position the portfolio in order for the fund to be re-opened at that time, and which is conditional upon achieving the target fund profile.
"In our view, this is a realistic amount of time for Woodford to complete a measured and orderly re-positioning of the Fund's portfolio of assets ensuring that there is adequate liquidity while preserving or realising the value of the assets."
The ACD added that manager Neil Woodford had continued to "make sales where reasonable prices can be achieved" and that it would continue to monitor the progress of the repositioning of the portfolio "to ensure that it is on track and our aim of lifting the suspension in December remains achievable".
As part of the formal review, investors will continue to be updated every 28 days and will be informed of any steps they need to take prior to the lifting of the suspension.
In a statement published on the Woodford Investment Management website this afternoon, manager Neil Woodford said the team has made progress with the strategy over the last month, having already reduced exposure to unquoted and less liquid stocks.
He said: "What you will see when the fund re-opens is a portfolio with more FTSE 100 and FTSE 250 companies (80% of the proceeds from share sales since suspension have been reinvested in FTSE 100 companies), but still reflecting the same investment strategy. To reiterate, that strategy is founded on a belief that the global economic environment is not as robust as equity markets are implying."
The manager added that macroeconomic data is "increasingly supportive of this thesis", with growth starting to falter in the US, parts of Europe "barely growing at all", and headwinds facing emerging market economies. As such, Woodford said the team will continue to focus on domestically-focused UK businesses which, according to the manager, represent "the most attractively valued stocks in the investment universe".
Woodford added: "The suspension and the circumstances that led to it, may have had an impact on the price of some of the fund's assets, but they have not had an impact on the value of those assets.
"I understand the frustration, inconvenience and anxiety the continued suspension of the fund will be causing [investors] and I am extremely sorry for putting [them] in this situation.