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Fidelity Personal Investing blocks customers from putting money into Woodford’s Income Focus fund

Fidelity Personal Investing blocks customers putting money into Woodford’s Income Focus fund

  • Investors still able to withdraw from Woodford’s smaller Income Focus fund 
  • Main Equity Income fund already fully suspended for withdrawals or entries
  • It comes as BoE policymaker warns of possible ‘spill over’ into the wider system

One of Britain’s largest investment platforms Fidelity Personal Investing has blocked its customers from putting money into Neil Woodford’s second fund, Income Focus, it has been reported.

Customers with Fidelity will continue to be able to withdraw money from the £325million fund, but won’t be allowed to buy new units, according to The Telegraph.

The news comes after Woodford stopped investors from withdrawing money from his flagship Equity Income Fund earlier this month after poor performance triggered a stampede to the exit.

More trouble: Fidelity Personal Investing has blocked its customers from putting money into Neil Woodford's Income Focus fund

More trouble: Fidelity Personal Investing has blocked its customers from putting money into Neil Woodford’s Income Focus fund

The shock move has triggered panic among investors and contagion has spread to other of Woodford’s funds. 

Last week, investing platform Hargreaves Lansdown pulled £45million of savers’ money out of Woodford’s Income Focus

Income Focus, which was launched in 2017 as a smaller sister to Woodford’s now-troubled flagship Equity Income, has seen a total of £116million withdrawn – sparking fears it too could struggle to sell assets and give savers their money back. 

And now a Bank of England policymaker has also warned that Woodford’s fund’s suspension could pose problems if it sparked a run on similar investments.  

Anil Kashyap, an external member of the Bank’s Financial Policy Committee, told MPs on the Treasury Select Committee the Woodford saga was being watched closely for signs of ‘spill over’ into the wider system. 

‘I don’t think Woodford per se creates financial stability risks, but if it undermines confidence in the system it could be a very big problem,’ he said.

‘It’s a very visible thing and has got people worrying about whether or not it is going to be present elsewhere.

‘We’re going to keep watching it and if it ever gets to the point where there’s substantial assets in a vehicle like that, that could give rise to widespread spillovers, we’d have to do something about it,’ he added.  

Searching for an alternative equity income fund to Woodford? The top 10 for income and returns

The equity income sector has come under intense scrutiny in recent weeks in the wake of Woodford’s .

But there are still equity income funds that have produced returns far in excess of the market over the past decade, according to research by Willis Owen.

‘Investors who ditch equity income funds following a recent spate of bad press risk missing out on returns far in excess of the market,’ Adrian Lowcock of Willis Owen said. 

On average, equity income investors have achieved returns of more than 145 per cent in the past 10 years, compared with the 136 per cent return achieved by the FTSE 100, according to the report.

But investors who backed the best-performing equity income fund of the past decade, Unicorn UK Income, have achieved a return of 338 per cent – nearly 2.5 times that of the FTSE 100.

TOP TEN EQUITY INCOME FUNDS FOR INCOME 
Fund Income Return
Unicorn UK Income in GB 146%
Premier Optimum Income in GB 122%
Royal London UK Equity Income in GB 114%
M&G Charifund in GB 107%
Fidelity Enhanced Income in GB 100%
Janus Henderson UK Equity Income & Growth in GB 100%
Premier Monthly Income in GB 100%
Schroder UK Alpha Income in GB 99%
AXA Framlington Monthly Income in GB 99%
Janus Henderson UK Responsible Income in GB 98%
TOP TEN EQUITY INCOME FUNDS FOR TOTAL RETURN
Fund Total Return
Unicorn UK Income TR in GB 338%
MI Chelverton UK Equity Income TR in GB** 326%
Royal London UK Equity Income TR in GB 233%
Janus Henderson UK Equity Income & Growth TR in GB 213%
Janus Henderson UK Responsible Income TR in GB 204%
JOHCM UK Equity Income in GB 200%
Standard Life Investments UK Equity Income Unconstrained in GB 194%
Man GLG UK Income in GB 190%
Schroder Income in GB 183%
Rathbone Income TR in GB 181%

 

 

 

 

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