Yahoo Finance Woodford investors one year on: 'He ruined my retirement. I can't trust a star manager again'
One year after Neil Woodford was forced to suspend his flagship Equity Income fund, and later close down his investment business, investors are still waiting for around £500m to be sold and savings returned to them.
More than 300,000 investors have had just £2.3bn back so far, as the fund – valued at £3.7bn when it was suspended in June last year – is yet to be fully wound up. There are fears the remaining unlisted assets could be worthless by the time a buyer is found, adding to investor losses.
Before a string of misplaced bets caused the fund to tank, it had amassed assets in excess of £10bn. Those who stuck with the once fêted manager to the bitter end are still reeling.
Nicholas Heleine, 55, an engineer from Cambridge, invested £50,000 with the manager, including some of his wife’s life savings, and lost more than £20,000. He said his dream of early retirement had been crushed and he would now have to work longer to make up the damage. He also said he would find it harder to help support his son who is studying at university in America, where tuition fees are especially high.
“It’s certainly changed the way I invest,” he said. “I no longer believe in the idea of ‘the star fund manager’ and that one guy can beat the market. I’m putting most of what I have left in the markets into passive tracker funds.”
It was easy to see why investors trusted the manager with their hopes, dreams and hard-earned cash. At his peak this century, Mr Woodford turned £10,000 into £45,000 whereas the market only returned £18,000. By the time he was fired in October last year he had cut this down to £26,000 – almost the same as what investors would have made from a cheap and basic tracker fund.
Laura McNair, 45, said she expects to lose up to 70pc of the £20,000 she invested in Mr Woodford’s fund as a nest egg for her two children. “It was supposed to be a gift for them to put towards university fees or a deposit for a flat. Sadly that won’t be possible now,” Mrs McNair said.
Her investment fell in value to £15,000 before the fund suspended and she has been told she will get between 40pc and 50pc of that back.
Her husband, Paul, said he was unsure they would even receive that reduced percentage of their initial savings. “The value of the portfolio has diminished so much,” he said.
The couple said they moved their money from Hargreaves Lansdown, their stock broker, which had close ties to the ruined stockpicker, to Interactive Investor, a rival.
Hargreaves Lansdown repeatedly came under fire for heavily promoting the tanking fund in its influential "best-buy lists", at the same time as reducing its own stake in the manager by selling units it owned in the fund via its in-house multi-asset funds.
“We didn’t like the way Hargreaves promoted the fund while cutting its own exposure to it. That left a sour taste,” Mr McNair said.
Brian Sargent, 80, has also lost a large chunk of a nest egg he was setting aside for his daughter. He invested £4,100 in the fund in 2015. He is supposed to get back around three-quarters of the money he put in but said he is not hopeful that will be the case. “I wanted it to be a nice gift for her, but it went badly wrong,” Mr Sargent said. “I’ve already received around £2,500 and should get £600 more but I’m not confident I’ll ever see it.”
He said he was very nervous about reinvesting the money but that the debacle had not put him off trusting so-called star managers. He has decided to move the funds into Finsbury Growth & Income, an investment trust run by Nick Train, another well-known investor. “He has a good track record – but then again so did Woodford at first,” Mr Sargent added.
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