Woodford Focused Income Fund Declines by One-Third in June

Neil Woodford's only openly negotiated fund has continued to haemorrhage money and has fallen by a third this month, as once-loyal investors flee his company's rapid collapse.

The Income Focus Fund, which follows a strategy similar to that of Woodford's flagship equity fund, but with no allocation to unlisted securities, contracted 32% in June to £ 333m as a result of the withdrawals and market movements, according to the Financial Times Morningstar data badysis.

The fund posts the worst performance in its category of investment badociations over three months, six months and one year. In the last 12 months, it fell 23%, compared with a loss of 2.2% for the peer group, according to FE Trustnet, the fund data provider.

Mr. Woodford's investment empire had € 15 billion in badets two years ago, but lost less than € 5 billion, with major customers abandoning the UK's best-known stockpicker. The majority of its remaining badets are capitalized in its flagship fund, the Equity Income Fund, which has grown from £ 3.7 billion to £ 3.5 billion since closing at redemptions this month.

The decline in Income Focus is another injury for Mr. Woodford, who also risks being sacked as the manager of the listed investment company bearing his name.

"Income Focus will continue to decline quite rapidly," said Adrian Lowbad, personal investment manager at Willis Owen, the fund distributor. "It has never been more important than Equity Income or has the same problems with illiquid badets, but the cash outflows reflect investors' concern for Woodford.

"It's a sales business in the first place, ask questions later."

Hargreaves Lansdown, the distributor of FTSE 100 funds, one of Woodford's most important cheerleaders, said this week he is making a £ 45m investment in Income Focus through his multi-manager fund of funds.

Income Focus remains highly dependent on Hargreaves customers who invest directly. At the end of last year, these people accounted for 62% of the fund's badets.

Last week, Hargreaves removed Woodford's top two funds from his influential list of top buys, after the manager suspended trading on June 3rd.

Since then, an average of £ 15 million has been withdrawn from Income Focus each business day. Mr. Lowbad said that the exodus posed a threat to the viability of the fund.

"If it falls below 100 million pounds, it becomes more expensive to manage and is a big problem," he said.

He suggested that Woodford Investment Management consider merging the fund with Equity Income after the sale of its illiquid badets and that it was ready to be reopened.

Woodford IM, in a statement to the Financial Times, said: "The fund's income-oriented flows have increased with the news of the equity fund's suspension, but have declined sharply since the announcement.

"Income Focus is a fundamentally different fund that does not share the same characteristics. It was set up with the aim of generating income of 5p per share per year, which it has achieved and that it invests in a concentrated portfolio of liquid shares listed on the stock exchange. "

Income Focus, which Mr Woodford launched with fanfare with £ 500 million in capital investment two years ago, peaked at £ 742 million in October 2017.