Woodford goes Transparent!

Rhymsta

Neil Woodford says he's going to publish a list of ALL holdings in his new fund by mid July.

Good idea or commercial suicide?

ManofLeisure_2

I guess that depends on exactly what is listed

gadgetmind

I guess it avoids further fines in the future for investing beyond declared risk rating.

ChesterDog

Good fund management is as much about what not to buy as it is about what to buy. So you have to admire the confidence to be so totally transparent instead of just publishing the top ten. NW's reputation will only be further enhanced by it, I would say, and while in theory it could lead people to 'do it themselves', I bet the actual impact of that will be small and fully mitigated by that reputation burnish. "Here is what I do, without any smoke and mirrors", I like that.

DonM

Sure people could try to replicate the fund but the key difference is NW will be buying low, selling high by default if everyone started to copy him. Surely that's a good thing for the fund.

bowlhead99

Rhymsta wrote: »

Neil Woodford says he's going to publish a list of ALL holdings in his new fund by mid July.

Good idea or commercial suicide?

If you were a strategic acquirer building up a stake in a company as part of a takeover strategy then yes it would be commercial suicide to announce what you were doing as you went along.

But Woodford is not trying to do that. And he has a vested interest in telling people what he thinks is a good investment (with a rolling delay).

Put it this way:
a) investors like transparency and this approach is a nice USP to attract money into the fund which increases his management fee.

b) announcing to the world in mid July that a superstar famous manager with one of the best track records of modern times believed very recently that each of these companies was worth holding based on its price and performance prospects - that is a great advert for the shares in the companies he holds, that he would like to increase in price due to demand factors.

And because he is meeting the transparency, consumer-friendly objective of (a), the FCA are not going to complain that he's 'talking up' stock he holds as market manipulation. But it is great to be able to tell people that these 50 stocks you hold are awesome and deserve a place in a great portfolio, after you just bought them, effectively doing a nice marketing job on them - some newspaper journalists have been sacked or sanctioned for doing such things.

The alternative you get with other managers is "these 10 stocks are awesome and I have some others I might talk about in a bit of commentary and all the rest I won't bother mentioning." As a high profile manager who is actually listened to by the public when he speaks (sometimes) it could be advantageous to be open and talk things up, if the public think 'there goes a fund manager who has still got that x factor, and this is what he buys'.

The downside is if he wants to add to a position he is building (either with new incoming subscriptions or just because he wants greater overall exposure) then he has just talked up the price of something he is going to buy.

Still, new incoming subscriptions means more management fees so you are never going to moan about having to put new money to work, and as a manager you don't have to buy the exact stock in its current proportions if you no longer like the price. And of course, because there is a rolling delay on publishing the information, he has a 2-week entry or exit window that he can take advantage of; it's not like he's announcing on 15 July exactly what he held on 14th or is definitely going to buy more of on 16th.

princeofpounds

All regular fund managers disclose their portfolios on a semi-annual basis, with a bit of a delay, in the financial reports they have to make.

They just don't have fanboys (and girls) getting worked up over them.

Rhymsta

Think I'll leave my 12k in the fund and use the info for investment ideas outside of my SIPP.
I say good on ya Mr Woodford!