Speaking at a conference hosted by AJ Bell, Woodford confirmed he had recently bought the two banks due to his continued belief that the UK economy is doing rather well despite the doomsayers’ predictions.
“There’s a lot of guff said about the UK economy,” he said, noting rises in people’s wages, low unemployment and a high number of job vacancies as reasons why the future is looking bright on a long-term basis.
The improvement in the banks was “a sign of health returning to the UK economy”, he said, which would do better again once a Brexit deal is struck in early 2019.
The new additions follow his purchase of Lloyd’s bank shares earlier this year. The bank is now the fifth largest holding in the CF Woodford Equity Income Fund.
He defended his recent and highly publicised underperformance by reiterating the argument that the market had got it wrong, not him.
“The reason we have had a difficult performance is because I pretty much disagree with everything that is happening in the market today. Markets are blowing in a very dangerous way. There is a lot of risk in pockets where investors are comfortable.”
Away from the pockets of growth, Woodford said some sectors have “almost had a bear market” where valuations are “very, very low”.
“It’s a very odd environment,” he added.
It has been a difficult year for Woodford, with his best-selling equity income fund ranking among the worst-performing in its Investment Association sector for the year after taking a number of hits from holdings such as the ailing Provident Financial and dips in pharma giant and his top holding, Astrazeneca.
