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By Harry Wilson
(Bloomberg) — Nigel Farage, a commodities trader for two decades before becoming the face of Brexit, is back in the world of markets and he’s got plenty to say about the state of finance.
Having spent years in the City of London, following his father and his grandfather, he then moved into politics. These days, when he’s not palling around with Donald Trump, filming personalized videos on Cameo or hawking his own-brand gin, he can be found sharing ideas via his personal finance newsletter, Fortune & Freedom.
So, what happens if you followed the recommendations? For months, we’ve been doing just that to see if they would pay off. The answer so far is, not so much.
We tracked a portfolio of stocks that Farage promotes, investing a notional £100,000. The 16 investments range from brand name stocks such as Unilever Plc to gold exchange-traded funds. Almost two years on, we’d have been better off — almost £25,000 richer (at least on paper) — if we’d stuck the money in a simple index tracker.
The investment promotions are another notch in the career of the 58-year-old, who went from the City of London to the European Parliament, the Brexit campaign and broadcasting. A larger-than-life character, Farage gives his views on everything from inflation to the Bank of England and the war in Ukraine. His website says he’s not giving financial advice, but wants to inform and educate. Underlying each appearance is a message: the financial, political and media elite are wrong.
If Brexit was about the British public “taking back control” of the country, he now wants to do the same for their money. As he says in one of his pitches: “Let’s have our own financial independence.”
Like all investors, Farage has his favored trades. He’s championed gold and other precious metals and, unsurprisingly for someone who wears his suspicion of the establishment on his sleeve, he’s also been a big backer of cryptocurrencies.
My entry point to all this was Fortune & Freedom. After weeks of reading and listening, I bought a subscription to the UK Independent Wealth newsletter for £99. Published by Southbank, it promised “insider insights from within the corridors of power… coupled with timely plays in the UK market, and income generating opportunities.”
And the tone of those insights? In a word — dramatic: Products offered at huge discounts, emails telling me to “act now or miss out” and newsletters that open with “Revealed: The Secrets of…”
On signing up, I’m informed that I’ve joined a 7,400-strong army of “self-made heroes.”
Southbank was also keen for me to consider its other products. Above a picture of Farage in large bold lettering came an “important message.”
“If you close this window, you will never see it again.”
Reading on, I found offers to sign up to more and more products. Within a few minutes of scrolling through the extra subscriptions the tab was more than ÂŁ11,000.
It turns out that in Southbank’s world, financial freedom requires a small fortune.
Southbank didn’t respond to requests seeking comment for this story.
Southbank offers numerous subscriber newsletters, but I chose Independent Wealth as it was the one personally associated with Farage. In its words: “Nigel has created UK Independent Wealth for investors searching for smart ways to help improve their financial standing.”
Farage also commends me for “taking the first important step towards your financial freedom.”
So, with my imaginary ÂŁ100,000, I went to see how far down that path to freedom I could get.
Meanwhile, despite the offer of substantial discounts — Southbank said I could have access to its entire “Strategic Value Network” for just £999 — I focused on my single UK Independent Wealth sub.
Logging in, I was introduced to Rob Marstrand, the letter’s investment director, who worked at SG Warburg and UBS Group for 15 years. While offering advice on British stocks, Marstrand himself is based in Argentina.
The UK Independent Wealth investments are made up of a clutch of stock portfolios, initially called Tea-Chest — “lower-risk opportunities” — Best of British — “swoop in on UK stocks with a potentially very bright future” — and Special Situations — “how to steal in on investments Rob sees as grossly undervalued.” The names have since been changed to the more prosaic Income & Value, Growth Compounders, and Gold & Precious Metals.
Anyone expecting the portfolio to be stuffed full with curiosities will be disappointed. Despite flirting with Bitcoin and uranium on Fortune & Freedom, inside the subscriber area things are lot more mainstream.
The first investment tipped by Marstrand in December 2020 was Urban Logistics REIT, a London-based property company investing in warehouses. He also recommended the WisdomTree Physical Gold GBP, an exchange-traded holder of the precious metal. Gold is a big favorite, and followers are recommended to hold 15-25% of their assets in gold and gold miners.
Since then, the selection has expanded to 16 securities. To figure out how this portfolio performed, I approached Tim Steer, who once managed hundreds of millions of pounds for clients of Artemis Investment Management. With his advice, I modeled the outcome using the portfolio management tools available on the Bloomberg Terminal.
By this method, the UK Independent Wealth stocks have underperformed the FTSE 100 and the broader FTSE All-Share Indices since late 2020. In monetary terms, while my theoretical £100,000 pot would now be worth about £118,000 (including dividends) if I’d put it in an All-Share tracker, I’d be down to £93,300 following Southbank’s recommendations. That’s a gap of £24,700 in just under two years.
Based on that performance, if you take the Citywire ranking of the UK’s top fund managers, Farage and Marstrand’s portfolio would be somewhere around 150 out of 166 funds tracked.
Marstrand has said that the performance should be judged over at least five years. Farage has said similar, that he wants to help people build long term wealth. But right now, the stock portfolio is off to a poor start, and there’s a lot of catch up to do. Marstrand declined to comment through a company spokesperson.
Steer says the inflation hedge strategy in the portfolio is sensible, but also that the selection is too small and too narrowly focused on the UK.
Farage is a “great salesman and a great deal of what he says is helpful to people,” he said. “But this isn’t the right portfolio for the current situation, principally because its chock-a-block with UK assets. And that’s not a great place to put your money these days.”
If the returns from Southbank’s mainstream portfolio seem underwhelming, the firm offers plenty of other options. And when you sign up to Southbank’s newsletters you quickly get to hear about a lot of them, from “must-watch stocks” to “unmissable” insights on crypto.
One recent email was classic Southbank: “Exposed: our best-kept secret, revealed at last.”
It was one of many teasing a strategy from in-house trading expert Eoin Treacy that offered the potential promise of earning more than £10,000 a month from “using this ONE simple trade.”
The trade was so valuable that his USB stick containing the algorithm “has been buried 50ft under the Nevada desert, in one of the most secure vaults in the world.” Treacy didn’t respond to emails seeking comment.
Finally, Southbank was ready to give me the full briefing. In a 9,000-word post — a pretty typical length for Southbank — Treacy explained that investors could make thousands by investing twice a month in the Dow Jones Industrial Average index around the fortnightly windows in which Americans place their pay checks into their 401k savings plans.
However, this strategy — the so-called payday anomaly — is common knowledge.
“There are anomalies out there, but they’ve all been well documented in the finance literature,” said William Pratt, an associate professor at the University of Central Oklahoma and co-author of a 2018 academic paper on the topic. “If it’s that great they would keep it for themselves. It doesn’t pass the common sense test.”
Using spread bets, Treacy said that incredible returns were possible, though lower down it was pointed out that to hit his profit forecast would require putting a substantial amount of money at risk as a margin deposit.
And that was before he got round to the subscription for this service: “Tell me — what would YOU charge ME for access to all this?”
The answer was ÂŁ21,000 a year, based on what Treacy said a City fund manager might ask, but luckily he was in a generous mood.
“The cost to join Reflex Trader — and get all my trade alerts for the next 12 months — is just £1,999.”
What’s more, for a “very limited time,” Southbank was offering me a £500 discount.
I ignored the offer, but the emails touting strategies kept rolling in.
Farage himself was less communicative.
He didn’t respond to emails and text messages seeking comment. Reached by phone briefly, he said: “I don’t give advice. That’s very important. I don’t give advice.”
Then the line cut off.
–With assistance from Demetrios Pogkas, Patrick Gillespie, Kitty Donaldson, Zimri Smith, Tom Metcalf and Patricia Suzara.
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