British companies 'a bargain', says investing star Woodford

It’s time to buy British, according to Neil Woodford, who claims UK stocks are a “bargain” as the global economy falters.

Controversial investment star Neil Woodford is advising people to buy UK-focused shares, describing many British listed companies, including Fidessa and Hammerson, as “bargains”.

Writing for Money Marketing, Woodford was remarkably upbeat about the UK economy, pointing out that UK growth forecasts are being upgraded and the country has just returned to real wage growth for the first time since early 2017.

“There are plenty of positives in the UK right now, which are not receiving as much media or market attention as they deserve,” wrote Woodford.

“The global economic picture has started to look a little less rosy, with data disappointments emanating from the US and Europe, alongside growing concerns about the impact of tighter US monetary policy on other parts of the world such as Asia.”

He is so positive about the British economy, he believes there is a chance it could be “the fastest growing” economy of all OECD nations by the end of this year.

In his article, Woodford goes on to say that he isn’t alone in realising that the UK could currently be a “bargain”. 

Pointing out that the past few weeks have seen bids for Fenner, Fidessa, Hammerson and Laird from overseas firms “apparently keen to snap up the bargains on offer.”

Woodford’s own fund struggles

Woodford’s upbeat report comes as his own fund, Woodford Equity Income, has suffered a £3.5 billion fall in assets over a year to £6.5 billion.

In fact, the fund is the worst performing in the Investment Association’s UK Equity Income sector over six months, one year and three years to 3 March.

In the past, he has been viewed as an investment master “spotting his winning move well before rival fund managers,” reports the Financial Times.

But, at present, he is in a difficult position with money flowing out of his fund as its performance fails to impress. He has to sell assets to fund those withdrawals which could also hit performance.

With close to 10% of his equity income fund invested in unlisted securities, which are difficult to sell quickly, the flow of money out of his fund could be causing him big problems. Although, as yet he has met all withdrawals without any issues.

“He is being hit by a perfect storm,” an analyst told the Financial Times. “You don’t want to sell your best-performing investments.”

However, Woodford himself is remaining positive.

“I believe in the portfolio I have constructed, how it has evolved over the past year and how it’s positioned to benefit from this changing landscape”.

It isn’t the first time Woodford has come under fire. Before the dot-com crash, he experienced terrible fund performance as he predicted the crash and invested in stocks he felt would perform well once the dotcom bubble burst.

Eventually, he was proved right but it remains to be seen if history will repeat itself this time.

The information included in this article does not constitute regulated financial advice. You should seek out independent, professional financial advice before making an investment decision.