Woodford Trust to Cut Borrowing and Buy Back Shares

Woodford Patient Capital Trust, which has been hit by the fallout from the gating of the equity income fund, makes plans to cut gearing and narrow the discount to NAV

James Gard 28 June, 2019 | 11:05AM

Neil Woodford

Shares in Woodford Patient Capital Trust (WPCT) climbed as the board revealed plans to reduce borrowing and buy back shares to reduce its discount, which is currently more than 30%.

Investment trusts, unlike unit trusts, are allowed to use borrowing to invest, which magnifies gains on the upside – but also lead to bigger losses. WPCT is allowed to gear up to 20% of its portfolio. Going forward, WPCT will still use gearing but at reduced levels and any move above 10% will have to be approved by the board.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Woodford Patient Capital Trust29.42 GBX2.88

About Author

James Gard  is content editor for Morningstar.co.uk

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