Hundreds of millions have been wiped off the value of his flagship fund, CF Woodford Equity Income, after a string of bad investment calls, forcing a rare public apology.
Woodford’s former fund, Invesco Perpetual High Income, is renowned for turning a £10,000 investment in 1988 into £230,000 over 25 years.
In 2014 he launched CF Woodford Equity Income, but after a bright start has endured his own annus horribilis.
Huge numbers of ordinary savers rely on him to generate share price growth and income, but should they look elsewhere?
Other established active fund managers have been doing far better, notably Terry Smith at Fundsmith Equity, who has now assumed Woodford’s mantle as the UK’s most popular fund manager.
CF Woodford Equity Income invests in scores of stocks, but this year some of his biggest holdings have been battered, with pharmaceutical giant AstraZeneca and technology stock Allied Minds both suffering their largest share price drops ever.
In August doorstep lender Provident Financial crashed 70 per cent and Woodford, who held almost a fifth of the firm’s shares, lost £326million in a day.
His fund is down 1.3 per cent in a year, while the UK equity income sector is up 9.6 per cent, according to TrustNet.com.
Woodford moved into unfamiliar territory by investing in small, unquoted firms with his second fund launch Patient Capital Trust, but so far its performance has been poor and he admits he is “right to be criticised”.
However, his loyal band of investors are standing by him for now, with £9billion in his main fund.
MEET MR SMITH
Senior analyst at financial advisers Hargreaves Lansdown Laith Khalaf says that despite recent troubles, Woodford’s 30-year “exceptional” track record speaks for itself: “All managers go through periods of underperformance and investors must accept this. If you switch every time you will miss out on periods of superior performance.”
Khalaf reckons Woodford will recover from his poor run, but investors should still spread their money across a range of fund managers with strong track records.
He picks out Nick Train, whose Lindsell Train UK Equity fund has returned 115 per cent over five years, and Giles Hargreave’s Marlborough UK Micro Cap Growth, which grew 154 per cent in that time.
Richard Pease, who manages Crux European Special Situations, Ben Whitmore at Jupiter Income and Adrian Frost at Artemis Income all have bags of star quality too, Khalaf says.
Terry Smith’s vehicle Fundsmith…