Who is taking a punt on CF Woodford fund?

A_Flock_Of_Sheep

Nope not yet. I have a sneaky feeling everything is getting a little top heavy. I confess to taking money off the table lately not placing more on.

Just call me cautious

sabretoothtigger

Market is doing a little wiggle. Time for caution, no real sign of a big pullback. I'd kinda like if it did but its still a strong market, we are well up

Something like this fund should be a buy multiple times anyway, it'll be years before it returns its (underlying) growth. Unless people think its just a stealth tracker

koru

My answer to the original question would be that if you wish to invest in an actively-managed UK equity income fund, the Woodford fund is likely to give a better net return than the other similar funds.

I say this not because I think he will outperform, but because he is cheaper than his competition. His fund has lower costs than virtually every other competitor active fund. For example, Woodford's old fund at Invesco has an OCF of 0.87%, compared with 0.75% for his new fund (disregarding the even cheaper version through HL and Skandia). So, you should rationally choose his new fund over his old fund UNLESS you think he is likely to underperform his old fund by an average of 0.12%.

Even if you think his historic outperformance was just fluke, I can see no rational reason to expect that he will underperform his competitors. Of course, he might actually underperform, but I see no reason to think this is more likely than not.

koru

The original question was whether he will outperform a tracker. He's still 0.5% higher cost than the Vanguard Equity Income tracker, so it only makes sense to go for Woodford in preference to a tracker if you think he's going to outperform the tracker by 0.5% per year. That's a big handicap he has to overcome. Most statistics would say that he's unlikely to overcome it in the long term.

There are, however, several well-reputed UK equity income investment trusts that are cheaper than CF Woodford. eg, City of London. Personally, I'd prefer them to a fund, if I was going for active management.

Scarpacci

One interesting thing about the new Woodford fund that I haven't seen mentioned here, is that they're committed to releasing a monthly breakdown of the fund's entire holdings - not just the top 10 as most funds do. That's a fairly bold move. They're making good use of their blog and social media accounts to be more open. They say the fund is 99% invested now and they aim to reveal the first batch of data in mid-July.

It will be interesting for those invested with the fund, and those who just watch Woodford, to see where the money's invested and how many holdings the fund has. I wonder whether other fund managers might have to become more open Fundsmith, though it just releases the top 10 holdings as is normal, provides monthly updates with comments on the portfolio. Perhaps investors will start to get more information about just what the fund managers are doing.

sabretoothtigger

Details of every share he has in the fund -

http://www.citywire.co.uk/money/woodford-reveals-every-single-stock-in-his-new-fund/a761706?re=29804&ea=249194&utm_source=BulkEmail_Money_Daily_Summary&utm_medium=BulkEmail_Money_Daily_Summary&utm_campaign=BulkEmail_Money_Daily_Summary

PippiShortsock

Has anyone who has invested in the income units received the dividend that was supposed to be paid on 30 September? The acc units price is higher than the inc, so I assume the notional dividend has been applied to them, but there's no sign of the dividend in my HL account where all other dividends have appeared the day they're due. (Although I did get the princely sum of 21p in loyalty bonuses today so maybe I shouldn't be concerned...)

Ryan_Futuristics

Oh interesting to hear you've not received it yet ... I invested just after the ex-dividend date

So far the fund's been leading the pack by quite some way (which doesn't mean much - Woodford's got a very long term view, investing in an ageing population by focusing on healthcare and biotech)

For me, my Vanguard Equity Income tracker is only 0.2% cheaper (and it's got a spread, making it more expensive to buy/sell) so Woodford's fund is a no-brainer

Long-term, Woodford's almost doubled the FTSE All Share's performance year on year (something like a 14% average annual return) ...

Realistic worst case scenario it just matches tracker performance and costs 0.2% more

Ryan_Futuristics

PippiShortsock wrote: »

Has anyone who has invested in the income units received the dividend that was supposed to be paid on 30 September? The acc units price is higher than the inc, so I assume the notional dividend has been applied to them, but there's no sign of the dividend in my HL account where all other dividends have appeared the day they're due. (Although I did get the princely sum of 21p in loyalty bonuses today so maybe I shouldn't be concerned...)

Just read there wasn't a dividend due on 30 Sep

http://www.whatinvestment.co.uk/financial-news/funds/2471832/woodford-fails-to-hit-income-target-with-new-fund.thtml

First one's due in December

PippiShortsock

Thanks Ryan. I'm still really confused though.

How come the acc funds are already worth more per unit than the inc funds if no dividends are yet due? Or do acc funds go up on the ex-dividend date rather than the payment date? And I'm almost positive that HL has been showing an ex-dividend date of 30 Jun 2014 and payment date of 30 Sep 2014 for the last few months at an estimated level of 4% pa. Feels like they're making it up as they go along!