Neil Woodford points finger at ‘unfavourable’ markets for fund woes
Neil Woodford defended his under-fire investment strategy over the weekend, citing “unfavourable” conditions and a momentum-driven market for the recent failures within his flagship fund.
The former star stockpicker pointed the finger at “a narrow fixation on businesses that are seen as beneficiaries of a reflationary global growth scenario” for the underperformance of his own investment fund, which was suspended in June after a spate of withdrawals.
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In its half-year results, first reported in the Sunday Times, Woodford’s Equity Income Fund said that the current market has shown “little or no regard” to the fundamental value of assets being bought or sold, consequently hitting the group’s “disciplined, valuation-oriented investment approach”.
The firm also reiterated Woodford’s apology to suspended fund investors in the report, saying: “We understand that many investors are disappointed by performance and frustrated by the fund’s suspension – and we are extremely sorry for this situation. We continue to reposition the portfolio in readiness for its reopening later in the year.”
Woodford has pledged to deliver a more liquid portfolio when it is expected to reopen in December, investing more in FTSE 100 and FTSE 250 index constituents.
In recent months Woodford has embarked on a fire sale of offload some major holdings in a bid to shore up the health of his troubled fund.
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Investors in the Equity Income Fund have not been able to access their money since 3 June.
In the month leading up to its suspension, investors withdrew roughly £560m from the fund.
Kent County Council also wanted to withdraw its £263m investment, but was not able to do so before trading halted.