Woodford: Aggressive sell-off in equities almost over

clock

Investors are "in the teeth" of a severe sell-off - but one which may be over relatively quickly, according to equity income manager Neil Woodford.

Thursday saw the FTSE 100 slide another 0.3% following its worst-one day fall in 16 months on Wednesday, leaving the index down 8.8% in a month.

Global indices have followed a similar path, with the S&P 500 down 6.8% in the US in the last month, and Germany's DAX down 10.9%.

Asian equity markets have not escaped unscathed, with the Nikkei also off 8.5%, and Hong Kong's Hang Seng off 5.4%.

Woodford told investors the “crisis” in equity markets represents a reappraisal of the global economic outlook: “This readjustment of asset prices is arguably quite rational," he said.

“My gut instinct is we are in the teeth of an aggressive sell-off, but it may well be substantially through the more acute phase. Asset prices are readjusting."

Woodford said there may still be more falls, but he said the majority of the downward leg in markets was done.

“There is a bit more to go but I think we have endured a pretty severe sell-off already. I would not expect it to go on for weeks and months. I think it will be over relatively quickly.”

The manager of the £3bn Woodford Equity Income fund said the sell-off “was not a surprise to me”, with his portfolio constructed to cope in a low growth, low inflation environment.

So far his approach is paying off versus peers, the fund off 2.3% in the last three months, versus the peer group average decline of 7.3%, according to FE.

More on Investment

Partner Content: Is the interest rate descent the time to harvest bonds?

Partner Content: Is the interest rate descent the time to harvest bonds?

Markets expect interest rates to fall this year, offering investors the strongest opportunity for fixed income seen for a long time. Watch this video podcast to learn how best to harvest this exciting opportunity.

Sarka Halas
clock 28 March 2024 • 1 min read
Partner Insight: How effective are impact investments?

Partner Insight: How effective are impact investments?

Impact investing has transformed over the past decade, giving investors the opportunity to pursue both financial returns and social and environmental outcomes.

Sarka Halas
clock 27 March 2024 • 2 min read
Partner Insight: High-yield investors should keep a close eye on the default cycle

Partner Insight: High-yield investors should keep a close eye on the default cycle

As central banks start to think about cutting interest rates, forecasts for a peak in credit default rates are not far behind — and could happen sooner than expected, says Wellington Management’s Alex King.

Sarka Halas
clock 27 March 2024 • 2 min read
Trustpilot