Further blow for Woodford

AILING investment manager Neil Woodford has been dealt a fresh blow after his business was downgraded by research firm Morningstar.

The 59-year-old’s flagship Equity Income fund has had its rating cut by Morningstar from ‘bronze’ to ‘neutral’ – the second-lowest level, above only ‘negative’.

Woodford has been hit by a stampede for the exits due to poor performance in the past two years, with assets dropping from £10.2bn in 2017 to just £4.4bn now.

There are also questions over how much of the fund is held in privately owned companies not listed on the stock market. It means Woodford has come perilously close to breaching rules intended to ensure that funds remain liquid – allowing investors to easily buy and sell them.

Morningstar’s research is widely followed in the City, and its cut will be seen as another major setback for the once-feted stock-picker.

Analyst Peter Brunt said: ‘Persistent redemptions, underperformance, and stock- specific issues, combined with the manager’s relentless willingness to push the portfolio to its liquidity limit, have resulted in portfolio positioning that we consider extreme.’