Importance Score: 65 / 100 🔴
Disgraced former fund manager Neil Woodford continues to evade regulatory oversight from the Financial Conduct Authority (FCA). Over a year has elapsed since the FCA issued a cautionary notice against Woodford for deficient management of liquidity risks linked to his £3.7 billion Woodford Equity Income (WEI) investment fund before its suspension in June 2019. This article examines Woodford’s recent activities and the FCA’s response.
The subsequent liquidation of the fund resulted in substantial losses for numerous investors.
Despite the FCA’s silence, Woodford has adopted a proactive approach.
He has established the Woodford Views website, offering insights on economics and markets; participated in interviews with investment professionals (including a discussion with Simon Brewer on The Money Maze Podcast); and unveiled a subscription-based service tailored for investors.
This investment service, known as W4.0, has garnered considerable attention, featuring three introductory strategies designed to provide subscribers with:
- A combination of dividend income and capital appreciation—mirroring the initial objective of WEI, which it failed to achieve.
- Significant growth potential—akin to Woodford Patient Capital, now managed by Schroders and undergoing liquidation (with its share price significantly below its initial launch price in April 2015).
- Substantial income—exceeding 7 percent, a rate typically associated with fraudulent schemes.
Is this assessment overly skeptical? Possibly. However, over 500 enthusiasts have enrolled as ‘founding partners,’ with more awaiting the opportunity to leverage Woodford’s investment acumen. The FCA’s stance on this service remains unclear, as the regulator has maintained silence on matters concerning Woodford.
Notably, the FCA only recently updated its register—used by companies and individuals to verify the details of regulated entities—to reflect its planned enforcement action against Woodford. While the FCA might yet hold Woodford accountable for his mismanagement of WEI, the prolonged delay of nearly six years is concerning.
In essence, Woodford appears to be outpacing the FCA.
Temple Bar’s Resurgence: A Proven Strategy
Fund managers Ian Lance and Nick Purves have successfully revitalized the investment trust Temple Bar.
Since assuming management responsibilities in late October 2020, they have transformed the fund from a struggling entity into an £800 million UK equity income trust.
Its performance has surpassed that of its competitors, yielding returns of approximately 140 percent.
While the sustainability of such exceptional returns remains uncertain—given the inherent volatility of the stock market—their investment approach, centered on acquiring undervalued UK companies with turnaround potential, is compelling.
This strategy is particularly relevant given the challenges facing growth investing, including tariffs imposed by President Trump, economic instability, and the resource demands of artificial intelligence.
Key Insights from Temple Bar’s Newsletter
Beyond their performance, Lance’s insights in the trust’s recent newsletter are noteworthy. He emphasizes that during periods of market volatility, investors often react defensively, seeking safety until conditions stabilize.
However, he argues that exiting the market typically leads to diminished returns compared to maintaining a steady course. He notes: ‘Volatility can be unsettling but is part and parcel of investing in equity markets – and it is the reason why we believe the asset class delivers premium returns over time.’
Regarding their investment philosophy, emphasizing sound businesses at a discount, Lance affirms its resilience, citing its success through various crises, including the dot-com bubble, the 2008 financial crisis, and the recent pandemic.
In short, investors should persevere.
And, as always, diversify investments to mitigate risk.
UK Rail: Delays Are Inherent
Despite promises of improvement with the establishment of Great British Railways, passengers continue to experience disruptions due to the existing infrastructure.
On Easter Monday, I was among thousands of commuters affected by a points failure near Reading, causing widespread delays at London’s Paddington Station.
Services from the West Country were severely impacted, with cancellations and diversions to Reading.
My journey home took over four hours, compared to the usual one, requiring a detour by bicycle to Waterloo Station. Even then, a trespasser near Clapham Junction further delayed the journey.
While Network Rail cannot be held responsible for trespassers, its failure to maintain a reliable rail network is evident.
Points failures near Paddington are a recurrent issue, representing a critical infrastructure weakness that Network Rail should have addressed long ago.
On that Monday, I was fortunate to reach home, while many others remained stranded.
A refund from Great Western Railways provided limited compensation for the lost travel time.
Great British Railways may eventually improve rail services, but the ingrained delays remain a concern.