Woodford: I’m sorry – but I’ll be proved right

EMBATTLED Neil Woodford has insisted his investment strategy can still deliver big returns – despite a meltdown at his flagship fund.

In comments likely to enrage thousands of savers blocked from withdrawing cash from his Equity Income fund, Woodford said his favoured stocks are being wrongly undervalued.

And he vowed to battle back despite investors making a stampede for the exits after three years of dismal performance.

In a letter to independent financial advisers who had recommended his scandalhit Equity Income fund, Woodford said he was ‘deeply sorry for putting you in this situation’ and apologised for being forced to halt withdrawals.

The 59yearold is now offloading stock in small firms where it is hard to find a quick buyer if savers want their cash back – the situation which led to the fund’s ban on withdrawals last week – and is focusing instead on larger firms where shares are easier to sell in a hurry. However, Woodford said despite this his investing strategy is fundamentally right and has not changed.

He is betting the economy is stronger than believed, and the stock market is therefore far too cheap. Woodford hopes prices will eventually soar and he will deliver huge returns.

So far, this gamble with his investors’ savings has proved disastrous. But Woodford said: ‘When the fund reopens, investors will see a much more liquid portfolio, but one which reflects the same investment strategy. It will continue to demonstrate a strong bias towards undervalued companies that are exposed to the UK economy.

‘Many companies that generate most of their revenues from the UK are as cheap as I can ever remember. In some cases the gap between value and price is as wide as I have ever seen in more than 30 years.’

Woodford also apologised for his terrible run.