July 2013 - HBFS

DIY Investing

DIY Investing

Posted by | Investments | No Comments

DIY Investing

DIY Investing

Neil Woodford (pictured) is rumoured to be considering a stake in Lloyds, raising the question of whether do-it-yourself investors should be buying into the bank. Below are some excellent views on DIY Investing

Reports that surfaced in the national press this morning said Invesco Perpetual, where Woodford presides as head of UK equities, was weighing up whether to take part in the initial tender of the bank, expected to take place this autumn. The move would represent a dramatic reversal of opinion on the part of the FE Alpha Manager, who foresaw the problems in the banks prior to the 2008 crash and has refused to hold them since. Invesco issued a statement this afternoon denying that Woodford was planning to buy a stake in Lloyds or any other UK-focused high street bank at the current time.

It claimed that fund managers from the group had met with Lloyds as part of a standard due diligence process, but interest in the stock – which is up 40 per cent in the last three months – is surging.

Graham Spooner, who covers the stock for The Share Centre, said: “If institutions like Invesco are interested, then the chances are they have probably had a closer look at it than the man on the street, so the man on the street might be thinking there could be value in the stock on a three-year timeframe.”

Lloyds was the best-performing stock on the FTSE 100 last year, making 85.02 per cent, according to data from FE Analytics. It has continued its strong run into 2013, more than doubling the returns of the FTSE All Share, with gains of 38.25 per cent compared with 14.34 per cent from the index.

graph1

HBFS Comment

This is a theme we have been concentrating on now for some time, it is interesting to see that Neil Woodford an excellent fund manager now looks to be viewing the banks as potential, as we hold his fund in many portfolios, but thankfully also have not missed the upswing in banks as due to our conviction in the sector via Jupiter Financial Opportunities, which has seen a positive return in the last twelve months.

graph2

• A – FTSE 100
• Jupiter Financial Opportunities