Not every private investor worships at the altar of fund management star Neil Woodford. Some point out thathe is mereflesh and blood and complain thattoo many treat him like aninvestment god. They are right, of course, Woodfordis only human, as heknows well enough. That explains why he works out in the gym, in a bid to stay fit and mimicWarren Buffett by investing into his 80s. As someone who personally invests in his funds, I hope he does.
Born To Win
All men are mortal but some arebetter at investing in others, and Woodford is perhaps the UKs most celebratedexample. He won hisreputation in the 1990s, by standing aloof fromthe dot.com frenzy. He cemented it in the run up to the financial crisis, by snubbing the banks. Now he is at it again, thrashing the market with his eponymous fund CF Woodford Equity Income.
If making your reputation is a battle, enhancing it is evenharder. Too many fund manager stars burn brightly then fade out just as quickly, but Woodford shone again in 2015. His fund grew 18% last year, whenthe FTSE 100 fell 2.7% and the All-Share went nowhere. That is quite a performance from an established star, given that so many prefer to play safe and live on their past glories.
Manyinvestors will be delighted, havingbacked his fund with billions since launch in June 2014. CF WoodfordEquity Income was the most bought fund by customers atboth Bestinvest and The Share Centre in 2015, and is the mostresearched fund on the HargreavesLansdown site as I write this. It has grown from zero to a 8bn behemoth in less than 20 months.
Woodford made his name at Invesco-Perpetual with his Income and High Income funds, where hefamously turned 10,000 into 140,000 in 20 years. Those were equity income funds primarily targeting blue-chips, whereas his new fund combines a core nucleus of big dividend stockssuch as Imperial Tobacco, AstraZeneca, GlaxoSmithKline, British American Tobacco and BT with smaller, younger businesses with stronger growth prospects.
Of course, Woodford isnt infallible. A report in December suggested he lostaround 38.5m from a failed investment in a controversial US firmNorthwest Biotherapeutics. I had the temerity to questionhis decision to offload Vodafone in February 2013 when the share price stood at 185p. Today it stands at 221p so I think we can call that a draw. This is just nitpickingwhen set against his many victories: he wisely dumpedTesco when Warren Buffett was still an avid buyer.
Woodfordisnt immune to market falls such as the one we are suffering now,but his fundis still 12% higher than a year ago, while the FTSE 100 is down 9.5% in that time.As stock markets crash about our ears too manyinvestors are focused on the dangers of losing money rather than the opportunity to make it. Neil Woodford wont be making that mistake. He will be holding his nerve and buying shares, which is just one factor that makes him a winner.
Woodford also knows that investing in top dividend stocks is the best way to get rich over the longer run.
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Harvey Jones holds units inCF Woodford Equity Income AndInvesco-Perpetual Income. He doesn’t hold any other stock mentioned in this article. The Motley Fool UK has recommended shares in AstraZeneca and GlaxoSmithKline. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.