You are here: Home - Investing -

Hargreaves Lansdown: Why we are backing Neil Woodford’s new launch

Written by:
Star fund manager Neil Woodford has announced that his long-awaited equity income fund - the inaugural product from his new venture Woodford Investment Management - will launch on 2 June.

Woodford, who left Invesco Perpetual last week to start his own firm, will run the CF Woodford Equity Income fund.

There will be no change in Woodford’s underlying investment strategy. He will still buy businesses he is happy to hold for the long term, focusing on company fundamentals and valuation anomalies thrown up by the market.

Here, Mark Dampier, head of research at Hargreaves Lansdown, explains why he is backing the new fund:

“We believe the prospect of Neil Woodford starting with a clean sheet of paper, and the ability to build a fund management business how he believes it should be, presents a rare and exciting opportunity for investors.

“I have known and invested with Neil for over 20 years. He has remained consistent and true to his long term investment philosophy, refusing to follow the herd and investing in unwanted, unfashionable and unloved sectors and companies. I believe him to be the finest fund manager of his generation and look forward to introducing his new fund to our clients.”

“Neil Woodford’s willingness to follow his convictions rather than herd instinct has seen him make some big calls which have benefited his investors. Most notably he refused to invest in technology companies in the run up to the tech crash, and sold out of banks well in advance of the financial crisis.

“More recently Neil took a big position in pharmaceutical stocks, the fruits of which are currently being reaped. He remains very positive on the sector and feels there are still a lot of opportunities.

“Some people have lost faith in him along the way, but we’ve always considered this to be short-sighted; his contrarian investment style means investors do have to endure some periods of underperformance. However, the long term results speak for themselves.”

Below are some of the key performance statistics of his tenure as manager of the Invesco Perpetual High Income fund, based on £10,000 invested in 1988 (values as of March 2014):

 £10,000 invested  Invesco Perpetual
High Income
 FTSE All Share
 Value (dividends reinvested)  £253,490  £109,200
 Value (dividends withdrawn)  £88,150  £42,010
 Total income generated  £39,060  £22,310
 2013 income  £2,770  £1,330
 Annualised return  13.2%  9.6%

Source: Lipper Hindsight

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Revealed: The best selling fund groups of quarter one

Old Mutual Global Investors has topped the fund sales chart for the first three months of the year.