Brunt said: “Woodford’s move into Lloyds marks a clear sea change with regards to UK domestic banks.
“He briefly held a position in the global bank HSBC in 2013/2014 at the end of his time at Invesco Perpetual and at the launch of the CF Woodford UK Equity Income fund, but has avoided domestically focused banks for well over a decade.
“Previously, he has cited concerns over the quality of loan books, capital adequacy, leverage ratios and the threat of regulatory intervention, but clearly he feels that the necessary repairs have been made, at least in the case of Lloyds.”
While Woodford’s fund had a disappointing performance in 2016, underperforming the IA Equity Income sector with returns of 8.96% over the year against the sector’s average return of 17.16%, Monaghan believes it is still an attractive investment prospect.
“He has had a difficult time but the sort of market rally last year was more materials led which would not ordinarily be an area that he would hold on to,” Monaghan added.
“For an equity investment, if you have a long term time horizon and you are prepared to take some volatility it’s still an attractive fund”.
