Neil Woodford’s Equity Earnings fund: ought to I purchase in the ‘offer period’?
Investors are being urged to invest now rather than wait until finally the fund is launched. But is there any advantage? 
Photograph: Jeff Gilbert
Q. I have heard a great deal about Neil Woodford’s new fund now getting open for business, with an “offer you time period” that commences right now. Does that imply I will get a much better deal if I invest now, rather than waiting for the complete launch on June 19?
A. Some advertisements placed by brokers marketing the new Woodford Equity Income fund provide the opportunity to “get in on the ground floor at £1 per share” and say the “fixed-cost provide closes on 18 June”. The impression is that anyone who acts now will get a much better deal and that if you wait the value could be various.
In reality, any income you hand over now will not be invested right up until the fund is actually launched on June 19. There is no “introductory offer”, this kind of as a discount, that early traders will advantage from. The unit price might be fixed but no one is aware of how several shares in his chosen organizations Mr Woodford will be capable to buy with your £1 – it depends on the place the marketplace is trading on the day.
Mr Woodford will be content to accept your income for investment into the fund soon after the launch date, when the price could be over or below £1, yet again depending on the share prices of his holdings on the day.
So for an individual investor there is absolutely nothing to be gained by sending off your cheque today, rather than waiting for the launch. It definitely won’t be a constrained offer – the new fund is a unit believe in, which means that new units are created every single day in response to orders from investors.
Though some unit trusts occasionally limit new investments, this is normally due to the fact they have become as well large to control in the way the manager would like. Mr Woodford, however, is employed to managing huge funds and will be keen to motivate as significantly cash as feasible into his new venture rather than in search of to restrict it.
But attracting a respectable sum of income into the fund during the provide time period does provide an indirect advantage to investors. Mr Woodford will use the money accumulated in the supply to purchase massive quantities of his selected shares on day a single, which is a lot more efficient than repeatedly acquiring little quantities. General, his trading charges – which are passed on to investors – will be diminished.
• The most affordable way to purchase Neil Woodford’s fund
• Neil Woodford talks: ‘My very best is nevertheless to come’
• More fund news and ideas: bookmark telegraph.co.united kingdom/investing