Slap: Neil Woodford, founder of Woodford Investment Management
Litigation specialist RGL Management is determined to hold investment platform Hargreaves Lansdown to account for the part it played in persuading investors to buy investment fund Woodford Equity Income ahead of its suspension in June 2019 – and subsequent break-up.
RGL has told me more than 2,000 claimants have been added to the High Court group claim brought against the wealth manager in October 2022 with the number of claimants now more than 5,000.
RGL says the action is for the losses that investors sustained as a result of the platform recommending the Woodford fund – run by Neil Woodford – right up until the day of its suspension.
This is despite Hargreaves Lansdown becoming increasingly concerned about the liquidity of the fund’s portfolio, making it difficult for the fund to meet redemption requests.
The claim’s objective is to make good the capital losses that investors have suffered despite a £230 million compensation scheme brokered by the regulator.
It will also claim for the loss of the opportunity of investing in alternative investment funds which would have generated positive returns.
RGL insists that another tranche of claimants will be added in the new year with the final group claim likely to be in excess of £200 million. Average claims will be for around £20,000, including interest.
Anyone who invested in Woodford Equity Income via Hargreaves Lansdown can find details about joining the action at woodfordlitigation.com.
No fees will be taken unless RGL is successful. So far, Mr Woodford has suffered no more than a slap on the wrists from the regulator for his part in turning his £3.7 billion fund into a basket case.
He is currently happily sharing his views on markets and economics with visitors to his website.
Shoddy rail services are now ‘a bit of a lottery’
Thanks for all of your emails about shoddy train services. I write this piece after a painful morning sitting on a Great Western train crawling into London Paddington like a caterpillar as a result of a broken rail in the Slough area.
Although my dire weekend experiences at the hands of CrossCountry (late trains, truncated trains, cancelled trains) were echoed by many readers who use the same Bournemouth to Manchester service, state-owned train operator Northern has few friends.
One reader, who wishes to remain anonymous, sent me a spreadsheet detailing the unreliability of Northern’s stopping service on a Sunday, running between Sheffield and Manchester Piccadilly.
Over the past six months, a third of services have been cancelled.
‘It’s a lottery whether your train will come and, if it does, how late it will be,’ he said through gritted teeth.
In defence of train operators, I will say that some staff work under extreme pressure.
On the first Avanti West Coast train steaming out of Birmingham New Street the other morning, I observed an inspector checking passengers’ tickets. People pretended to be asleep or claimed their phones (containing their tickets) had run out of juice.
She made an announcement as soon as she completed her ticket check in our carriage. ‘Nine passengers have so far feigned sleep or not provided tickets,’ she said (our carriage was the first she had checked).
‘Please get off at the next stop if you haven’t got a ticket and buy one.
‘Revenue enforcement officers will be waiting at Euston to fine those without tickets.’
I felt for her, I really did.
Brunner’s stock trade is consistency
Investment trust Brunner is enjoying a rich vein of form, resulting in robust demand for its shares. Indeed, it is the only global trust whose shares trade at a premium to their underlying assets.
Although the £625 million fund takes its name from the Brunner family who still hold around 30 per cent of the shares (the late Sir John Brunner was instrumental in the formation of industrial giant ICI in the 1920s), it is managed by Allianz Global Investors.
Last week, co-manager Julian Bishop spoke to Wealth about the shares standing at a premium and the trust’s strong performance – its shares are up 40 per cent in the past year, 79 per cent in the past five.
Family seat: The 16th Century Greys Court, near Henley, Oxon, was bought by the Brunners in 1937
He believes the fund’s pragmatic investment approach has struck a chord with investors looking for a no-thrills, long-term home for their money. The result is a stable shareholder base. The fund does not adopt one specific investment style – growth, quality, or value investing. ‘We prefer to be adaptive, rather than ideological, as managers,’ says Bishop.
He adds: ‘Markets are dynamic. Key for us is that every stock we hold must generate cash and have longevity. We want to invest in companies which will be around for ever.’ Key holdings include Microsoft and Visa, dominant forces in their respective markets.
The trust is 45 per cent invested in North America with the balance primarily in the UK and Europe. UK-listed companies InterContinental Hotels Group and Shell are among its top 20 holdings.
Bishop warns: ‘In the United States, valuations are entering uncomfortable territory. Our job as managers is to protect investors from the madness of crowds while continuing to be part of the American capitalist success story.’
The trust’s emphasis on cash-rich companies is reflected in a steady dividend, paid quarterly. It is a racing certainty that Brunner will soon notch up its 53rd consecutive year of dividend growth. Global trusts Alliance Witan, Bankers and F&C have slightly longer dividend growth records but none matches Brunner’s five-year returns.
Consistency is Brunner’s key. Some, including the Brunner family – who donated their family seat Greys House at Henley on Thames, Oxon, to the National Trust – would say it is a perfect core holding.
Lower rates bring hoaxers out of woodwork
Falling interest rates are prompting fraudsters to appear from the woodwork in the hope of catching out savers with what appear to be knockout fixed-rate deposit accounts. Nothing could be further from the truth – part with your money and you will never see it again.
Among deposit traps doing the rounds is one (allegedly) from RBS International (part of NatWest) offering three deals, ranging from 6.2 per cent fixed over one year, up to 7.5 per cent over five years. Minimum deposit is £10,000.
Chunks of the explanatory brochure are lifted from the real RBS International website but are disingenuously used. For example, the ‘statement from the CEO’ is no more than a resume of his career.
The brochure also cannot quite make up its mind how much protection savers will get if things go horribly wrong. Figures of £80,000, £85,000, and £250,000 are all mentioned. Missing is the correct answer: Zero.
One reader took up the invitation to speak to an ‘advisor’ but said the individual was a ‘bit of a wide boy’ and thought better of parting with his money. Thank goodness for that. NatWest has confirmed to Wealth that the bond was a hoax.