Yahoo Finance Pension products that mirror Woodford's fund also suspended
Pensions providers with products that mirror the high profile Woodford Equity Income fund are also being suspended in the wake of the star money manager Neil Woodford freezing withdrawals.
Ben Yearsley, director at Shore Financial Planning, said: “I should imagine most of the pension providers have their own mirror funds. There is no magic bullet here. They are all essentially invested in the same fund and will all have to suspend redemptions until the main fund is sorted out.”
However, he added suspending the fund was in the best interest for the investor. If Woodford had to sell everything at knock down prices it would hurt the investor more.
“It has been done for the right reasons,” Yearsley said. “Unfortunately as an investor it means you have to be patient and let the process play out. It probably won’t play out in a month it will probably be suspended for two of three months.
“It is unlikely to be sorted out within 28 days. You want him to be able to do it gradually, properly and not rushed.”
Phoenix Life, one of the mirror products impacted, said it had stopped trading in investments funds with exposure to the portfolio, but added the vast majority of its customers had no exposure to the fund.
Adrian Lowcock, head of personal investing at Willis Owen, said these mirror funds were probably only a small part of a pension portfolio. He also did not think the suspensions would spread to any of Woodford’s peers that ran similar funds and it was an issue specific to Woodford.
“I think most of Woodford’s peers are much more liquid,” Lowcock said.
The Woodford flagship fund has had deteriorating performance, shrinking in size from £6.8bn to £3.7bn over the past year, underperforming its peers in the equity income fund sector.
Woodford decided to suspend the fund earlier this week after Kent County Council made the request to withdraw an investment of £250m.
Wealth management group, St. James’s Place has also made the decision to terminate its mandate with Woodford Investment Management.
The funds impacted were not part of Woodford’s suspended fund, but were to “ensure its clients investments continue to be managed effectively.
Mandates have been given to Columbia Threadneedle Asset Management and RWC Partners.
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