Speaking in a video posted to his firm’s website, Woodford talked of the ‘enormous pressure’ last year put on fund managers.
“2016 has been a year in which fundamental valuation issues have been subordinated to momentum,” he said. “We were in a very momentum driven stock market. Whenever that happens it puts enormous pressure on fund managers, not least because so many of us are in an industry that requires performance to be delivered continually, and that’s not possible in my view.”
“If you’re going to add value in the long term, when markets become momentum driven that’s the time when you need to have your investment anchors securely in place,” Woodford continued. “My investment anchor is driven very much by valuation and a long term perspective on valuation. So through 2016 as share prices have become more detached from fundamentals that has made me more confident about what we can deliver in the long term. But it’s tested my resolve certainly through 2016, and tested our clients’ resolve as well.”
Woodford went on to concede that 2016 has been ‘a disappointing year from a performance point of view.’
His flagship fund, CF Woodford Equity Income, underperformed both the FTSE All Share and the Investment Association UK Equity Income sector average over the past 12 months, according to FE.
