An Interview with Woodford

An Interview with Woodford

- Posted by David Bremer on June 26, 2017

When listening to Neil Woodford speak, what really strikes home, is the passion he retains for his work even after 30 years in the role of providing investors with healthy returns on their money. He remains a highly driven individual, who, since the launch of ‘Woodford Investment Management’, says that he “feels born again".

As one of the UK's premier fund managers, Woodford has in the past been known for taking a contrary stance against popular opinion when it comes to how the UK economy will behave, and he appears to be doing the same with two topical cases, the implications of the recent general election result, and the effect of Brexit (now that article 50 has been triggered).

In the aftermath of the Brexit vote, Woodford feels that people have become "institutionally negative about the future". Neil does not share this view, and following the surprising result of the general election, he is of the opinion that as the Conservatives are forced to align themselves with the DUP, the chance of a soft Brexit has risen sharply, which he believes, will only be a good thing for the UK economy. In addition, the chances of a second Scottish Independence referendum (certainly for the foreseeable future) are remote, which will hopefully avoid any further upheaval.

When speaking of investment opportunities, Woodford feels that despite the current record highs of the UK stock markets there still remains plenty of undervalued companies within the UK to be found. In fact, he predicts that over the next 3-5 years he will be able to produce even higher returns to his clients than at present.

An area that Woodford seems particularly excited by is UK Technology. He thinks that this area has been neglected by investors for the last 50 years but now things are beginning to change. However, although young British technology companies are now beginning to see some investment, this backing is not currently coming from the UK but from overseas. Investors from the US, China, Singapore etc are seeing what a great opportunity there is in UK technology, and Woodford, who wholeheartedly agrees, also wants to take advantage of this underfunded market.

Although Neil seems to have faith in the UK, when it comes to the global economy he is more cautious. He feels more confident in the UK than in Europe and is not sure that the growth in China is sustainable as they continue to create liquidity to pump into their infrastructure. Also, when referring to the US, he thinks that many of the promises made by Trump during his election campaign were “just a wish list” and are highly unlikely to ever become policy and as Trump’s tenure progresses, it remains to be seen just what affect this will have.