CF Woodford Equity Income on TD Direct

vmp

Hi,


Does anyone know if you can invest at launch (and get the £1 fixed offer price) in CF Woodford Equity Income on TD Direct?


I can see a lot about it on other websites, but can't find any mention of it on TD Direct

le_loup

Don't be misled by the £1 fixed offer price. It is a misnomer for a new fund launch as opposed to a share price offer.
As to your question: not idea. Ask them, they will know.

melbury

So if you invest £1,000 don't you get 1,000 units?

le_loup

melbury wrote: »

So if you invest £1,000 don't you get 1,000 units?

Yes ... therefore?

bowlhead99

melbury wrote: »

So if you invest £1,000 don't you get 1,000 units?

Yes. You get 1000 units worth £1000.

But if you wait until day 2 and invest £1000 you might get 990 units worth £1000 or you might get 1010 units worth £1000. It depends what the price is on day 2. Either way, what you get will be £1000 worth of the new fund.

So, if you give them money in advance to make sure you are on board on the first day, to make any gains that the funds makes between day one and two, you will be missing out on all the gains available in the market on day -1, day -2, day -3, day -5 etc while your cash is sitting there doing nothing waiting to be invested at launch. If you believe equity markets are going to generally be moving upwards (which is the reason you are investing in this equity fund), that seems a bit of a waste.

There is no fundamental 'discount' available for anyone signing up in advance. A new fund launch is different to a share coming to the stock market for the first time. With a share, you might buy in at £1 a share and once the market sees the supply and demand, it might suddenly be trading at £1.20 within a few days. But with an open-ended fund like this one, if there is a lot of demand they will just issue new units to everyone who wants them.

For every pound of extra demand, the fund will issue the appropriate amount of new shares and put the pound into its bank account. So the total value of the fund goes up as new investors throw new money in, but all the shares are issued at the current value per share of all the other shares already in issue. The only driver of the value per share is what Neil chooses to spend the cash on, and whether those companies go up in value from day to day more than the expenses of operating the fund.

le_loup

bowlhead99 you are so wonderfully patient ... and a brilliant typist!