Neil Woodford's Flagship Investment Fund Suffers Losses in May

(Bloomberg) -- Investors are fleeing Neil Woodford’s flagship investment fund and assets have shrunk by 560 million pounds ($707 million) in the past month.

The fund manages about 3.8 billion pounds, down from just over 4.3 billion pounds at the end of April, according to Morningstar data. That represents a 63% drop from the 10.2 billion pounds managed two years ago, Morningstar data show. The Financial Times reported the news earlier.

“Broader market malaise in U.K.-quoted domestic stocks has contributed to the fund’s underperformance,” according to an emailed statement from Woodford’s spokesman. “However, Neil continues to believe this area of the market, such as house builders and other consumer stocks, are profoundly undervalued and offer long-term potential returns.”

Woodford, a Warren Buffett devotee with contrarian views such as being bullish on Brexit’s impact on the British economy, gained a reputation for prescience by correctly calling major swings in technology, tobacco and other stocks during his investing career. His fund has struggled recently, falling 5.8% in the last three years and 17.2% in the past 12 months, ranking near the bottom of its peer group, according to data compiled by Bloomberg. It’s down 6% year-to-date, compared with a 7.6 percent increase in the FTSE All-Share Index.

He has also struggled to keep his fund below a regulatory imposed limit of 10% invested in unlisted stocks, which are harder to sell than listed securities, according to the FT.

The FCA declined to comment on the regulatory limit. The Woodford spokesman said the FCA has not been in direct contact with the fund manager about the threshold.

To contact the reporter on this story: Suzy Waite in London at swaite8@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Dale Crofts

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