Woodford promises a 'spectacular' recovery: But will disgruntled savers stick with him after series of blunders?By James Burton For T
Woodford promises a ‘spectacular’ recovery: But will disgruntled savers stick with him after series of blunders?
James Burton For The Daily Mail
Embattled Neil Woodford insisted his funds are on the brink of a ‘spectacular’ recovery – but admitted he could go out of business if he fails to deliver.
In a robust defence of his investment strategy, the 59-year-old stock picker attacked his critics and accused them of producing ‘misinformation and lazy commentary’.
And he said savers who have pulled money out of his funds as a result of the criticism have made ‘appallingly bad decisions’.
In a robust defence of his investment strategy, 59-year-old stock picker Neil Woodford attacked his critics and accused them of producing ‘misinformation and lazy commentary’
‘You are pretty much a lone voice, and people write all sorts of stuff about you that tell you that you’ve lost the plot, you’re a lunatic, you’re arrogant,’ Woodford told the Financial Times.
‘There is a mountain of fake information and fake analysis out in the marketplace which, in the end, does impact investors’ decisions detrimentally. So that’s what p***es me off.’
Investors have pulled billions of pounds out of Woodford’s funds over the past two years and he admitted that he could be out of businesses by 2021 if the picture does not improve.
The size of his flagship equity income fund peaked at £10.2billion in May 2017, but assets have since dropped to £4.5billion.
Woodford has suffered 21 straight months of net withdrawals where more money was taken out from the fund than put in.
And the equity income fund has underperformed rivals over one year, three years and since it launched in 2014. An investor who put in £1,000 three years ago would now only have £941.
If they had put the same amount into the FTSE All-Share index, they would have £1,293.
But Woodford believes his fortunes could be transformed as the market turns and the firms he backs find favour once again.
He struck a defiant note and refused to change course or appease his detractors.
Woodford said: ‘To do anything different now would be a fundamental betrayal.’
A hoped-for revival in UK share prices has failed to materialise as jitters over Brexit hold the stock market back. And at a stock-by-stock level, Woodford has suffered repeated setbacks.
He backed energy firm Utilitywise, which has gone bust; drugmakers Prothena and Circassia, which have suffered from clinical trial failures and poor sales; and technology company Allied Minds, which crashed after its co-founder unexpectedly quit.
Other failures have included doorstep lender Provident Financial, which tumbled when it revealed mis-selling probes and an IT meltdown.
The mis-steps are costing Woodford dearly as savers abandon his company and taking their money elsewhere.
He believes the stock market is undervalued because investors are braced for economic Armageddon over Brexit. He does not expect our departure from the European Union to trigger the disaster others fear.
But the manager is one of a few investors who are not deeply gloomy and therefore has been hit by pessimism which has pushed down share prices.
It is not the first time Woodford has suffered a setback. When working for Invesco in the late- 1990s, he was panned for steering clear of tech stocks at a time when they were rising sharply – but was later proved right when the bubble burst.
He repeated this success before the financial crisis by shunning the banks, again avoiding huge share price crashes amid an economic collapse.