New Woodford Fund

InvestInPoker

bolzano wrote: »

Sorry if it is a daft question, but I was wondering where this fund will sit within people's asset allocations? Will you be putting it in under UK equities? Or keeping it as a separate category? Or something else?

UK Smaller company equities for me - although these are start up level - a lot smaller and riskier than other "small company" funds.

masonic

bolzano wrote: »

Sorry if it is a daft question, but I was wondering where this fund will sit within people's asset allocations? Will you be putting it in under UK equities? Or keeping it as a separate category? Or something else?

I'm treating it more like private equity/VC and will be happy to hold a small slice alongside my existing UK small cap and UK equity funds.

bowlhead99

Half of it is UK microcap/nanocap including venture capital (a type of unlisted private equity), a quarter or so is fledgling/microcap to small cap, and a quarter will be regular medium/large UK.

At least, that's where it will be after (target) 2 years once fully deployed. To start with they will be waiting for the opportunities to roll in and it will be largecap /med cap mostly.

I am going to put a bit into this, which ordinarily I would have mostly taken from my private equity/ alternatives allocation and a bit from UK smallcap, but as my UK small cap is already pretty light, I will use some private equity and some fresh cash and maybe some non equity money to put 2-3% of my SIPP into it.

ktk

I have a few k in a Poppy account that is now not returning much interest. I think I will move this into my ISA account with CSD and use it to invest in this fund. I was going to purchase more VLS 80, but I will still have some more allowance left for that.

Please let me know if this is not such a good idea!

Rollinghome

ktk wrote: »

Please let me know if this is not such a good idea!

We'll do that - provided you're willing to wait 5 years or so for a useful answer.

In the meantime, a more general answer would be that much depends on what else you're invested in: an IT like this wouldn't be considered a core holding.

ktk

Thanks Rolling Home. My main investment is VLS, as I am happy to let someone else do the work. I would be looking to invest for at least 10 years, by which time I will be looking to retire.

bowlhead99

ktk wrote: »

Thanks Rolling Home. My main investment is VLS, as I am happy to let someone else do the work. I would be looking to invest for at least 10 years, by which time I will be looking to retire.

Well, someone else 'does the work' for this one too. They decide what to invest in and you sit back and receive the results.

The difference is with VLS your money is deployed across a mix of largecap stocks and bonds around the planet. With Woodford Patient your money is deployed in one economy and in specialist assets meeting Woodford's opinion of what they need to hold to get a reasonable mix of opportunity and liquidity within the UK smallcap sector.

As I mentioned above, in this fund you get "Half of it is UK microcap/ nanocap including venture capital (a type of unlisted private equity), a quarter or so is UK fledgling /microcap to small cap, and a quarter will be regular medium /large UK.

At least, that's where it will be after (target) 2 years once fully deployed. To start with they will be waiting for the opportunities to roll in and it will be largecap /med cap mostly."

That is very different from the VLS asset allocation.

So for example if you had £2k in VLS 80, you would have £1600 of equities of which maybe 25% is UK (£400).

If you add £1k minimum subscription to this new fund at IPO, you would have £2600 total of equities of which £1400 (54%) is UK and over half the UK is smallcap rather than largecap. So it turns your overall £3k portfolio into a punt on the prospects of the UK venture capital and smallcap market with only £1200 exposure to largecap international equities and £400 (13%) bonds.

Of course your actual numbers depend on your ratio of VLS to Woodford Patient.

After 10 years the fund might be doing fine, or it might be doing very well indeed, or it might be doing very badly indeed. This is an unknown. The specialised nature of the assets means that the returns are unlikely to be the same as the 'average' world equity market return, whatever that is. Longer than 10 years is more ideal, imho. I will be putting some in a pension wrapper and a token amount in a designated account for niece/nephew with a 15-18 year view.

"Looking to retire" in 10 years is probably a red herring because that statement on its own doesn't say whether you will really really need to sell your Woodford and VLS at that point to buy a retirement cottage or income producing assets, or whether you can keep some of them growing for the fifty following years in the knowledge that if they drop you'll need them to rebound of their own accord rather than being able to put in new money from employment to top them up.

ktk

Thanks Bowlhead. Excellent info, as usual. Retirement plans are in place, and I would not need to sell these investments. With regards the split, most will be VLS, although I have shares and other investments outside this particular ISA wrapper. I was thinking of around a £10k investment, although I realise that I might not get this allocation. Do you think that this is too much. I know you will say only invest what you can afford to lose..... But I am ok with the risk, although would not be overjoyed to lose quite that much!!

tg99

Just got an email from Woodford (I subscribe to their newsletter / blog) and due to demand they may exceed £500m in the offer period so are launching a supplementary prospectus to up the available amount to £800m

TCA

tg99 wrote: »

Just got an email from Woodford (I subscribe to their newsletter / blog) and due to demand they may exceed £500m in the offer period so are launching a supplementary prospectus to up the available amount to £800m

Thanks for the info. Here it is:

https://woodfordfunds.com/wp-content/uploads/2015/04/wpct-supplementary-prospectus.pdf