Investors in Neil Woodford’s stricken Equity Income fund will not be able to access their cash until at least December, the company has said today.
The fund was first suspended on June 3, and today (July 29) it has been confirmed that the fund's suspension will continue until early December, with a view to opening the fund at that time.
The company said sales continue to be made to improve the liquidity of the fund, with the aim of raising sufficient cash to enable dealing in the fund to resume.
Outflows were running at about £9m per working day in May, the month immediately prior to the suspension.
Addressing investors Mr Woodford said: "I understand the frustration, inconvenience and anxiety the continued suspension of the fund will be causing you and I am extremely sorry for putting you in this situation.
"Since our last update a month ago, we have made progress with our strategy to reduce our exposure to unquoted and less liquid stocks with our primary focus being on delivering the best possible outcomes for investors in the fund.
"We commenced the process of reducing the fund’s exposure to unquoted and less liquid assets in February. I’m afraid we cannot share details of exactly what has changed with you just yet."
He said when the fund re-opens it will be a portfolio with more FTSE 100 and FTSE 250 companies after 80 per cent of the proceeds from share sales since suspension have been reinvested in FTSE 100 companies, but it will still reflect the same investment strategy.
He added: "To reiterate, that strategy is founded on a belief that the global economic environment is not as robust as equity markets are implying.
"Macroeconomic data is increasingly supportive of this thesis, with growth starting to falter in the US, parts of Europe barely growing at all, and further evidence of problems in emerging market economies.
"Profit warnings have been a regular feature of the second quarter earnings season that recently commenced, and we would expect to see more of these, particularly from global-facing and industrial companies.
"Admittedly, this strategy has not delivered the returns we had anticipated over the past couple of years which is why the fund is in the situation it is today."
Mr Woodford warned the suspension appeared to have dented the performance of the fund in the short-term, but he thought "the worst is now past".
"The suspension and the circumstances that led to it, may have had an impact on the price of some of the fund’s assets, but they have not had an impact on the value of those assets," he added.
Since the fund was suspended, hundreds of millions of pounds has been raised by selling stocks.
The board of the £850m Woodford Patient Capital trust is already speaking with rival fund managers, putting Neil Woodford's role as manager of the trust in doubt.