We’ve all seen that wondrous suspension of redemptions in Neil Woodford’s Equity Income Fund. The interesting question obviously being well, what in buggery happened? The answer being something that’s not unusual in the slightest. There’s a liquidity mismatch in the basic set up.
This is usually most evident in banking. The banks takes in our deposits as short term loans from us to them. We can go ask for them back any time. The bank then lends them out longer term, for months or years.…See More