This is at least potentially a problem, yes:
Nervous investors who dump investment fund assets in a panic threaten to overwhelm a $41 trillion (£35.8 trillion) industry and push the global financial system towards collapse, the International Monetary Fund (IMF) has warned.
The IMF said open-ended investment funds, which promise consumers cash on demand, but often invest in assets like corporate bonds or property that are hard to sell quickly, had grown four-fold in value since the financial crisis.
But they also often created a so-called “liquidity mismatch” that risked overwhelming funds if lots of investors suddenly withdrew their cash in a panic.
In an extreme event where everyone turns up for their money now, as with fractional banking, then everyone’s bust. How likely is such a run? Well, it happened to Woodford, even if fairly slowly. So it’s possible, which means the concern should really be about how bad does it have to get before a run is a problem?
5% withdrawals? 50%? What?