New Woodford Fund

le_loup

sorcerer wrote: »

i agree bowlhead, when Anthony Bolton opened his new China Special Sitations fund, I didn't touch it

If Woodford was doing something similar, I would (and did) wholeheartedly agree, but he's not. What attracts me is the very idea of patient capital; the German model of capitalism. I want British businesses to succeed, I want start ups to get help, I'm horrified that so many good ideas companies are sold off to be developed overseas or to stop competition. (A bit like US Invesco buying up UK Perpetual?)

Yes, of course, I will pour over the prospectus, and of course, this will not be suitable for grannies with £73.97 between them and their next pension payment, but for a relatively small slice (4 -5%) some of which I may lose, I very much like the idea.

I also like someone trying out a new model of charging. It may not be perfect but may be considerably better that a "2 & 20" or a "pay me regardless" approach.

My comment "without me thinking any further about it" was silly, but I am nevertheless, as you may discern, full of enthusiasm.

talexuser

Apparently Woodford sold his stake in HSBC a few weeks ago, reason... uninvestable because of rising risk of fines for serial misconduct. We'll see if the shocking latest round of revelations about assisting tax evasion comes to anything.

sorcerer

Don't get me wrong i like Woodford, i have invested in his Equity Inomce and it forms a part of my income generating ISA. But I am looking to replace my smaller companies fund with something different, so this might be it. My Smaller Companies fund has lost 10% last year, and I am increasinly geeting annoyed by the fund managers, and their poor stock selection.

bowlhead99

sorcerer wrote: »

My Smaller Companies fund has lost 10% last year, and I am increasinly geeting annoyed by the fund managers, and their poor stock selection.

Many managers have lost money with smaller companies funds over the last year. For the UK Smaller sector, Unicorn, Schroder, Liontrust, Investec all down and they're clearly not all idiots, as the 3 year returns of 50-80%, including these losses, show. Marlborough microcap down over 5% in 12 months but stillupis over 140% in 36 months.

Similarly if you look at Europe small cap, managers like Invesco, Henderson, M&G are all nursing losses if you only look at a year. It's only really US smaller companies where funds are universally up in the most recent year.

No denying stock selection is important in small cap because the universe of things to invest in can be a very mixed bag. And perhaps your particular fund is a dog and the managers couldn't organise a drinking session in a brewery. But it's widely acknowledged that the smallcap sector has not had anything like as good time in the last year as it did in the year or two before: economic cycles and all that. Maybe Woodford would have done Ok in the last year but he is probably pleased he didn't have the time to kick off a UK smallco fund a year ago.

Porcupine

The thing about performance fees is the frogs tend to get boiled. For instance, there are funds that pay a performance fee of 20% of growth above Bank of England base rate. That was all very well when base was 6% - if the fund delivers 8% growth then a 0.4% hit isn't a problem. But when rates end up at 0.5% then suddenly that fund delivering 8% growth hands 1.5% to the manager. And then we find that the manager is very slow at removing the performance fee arrangement once it's not longer justifiable. Likewise, post RDR, fees are drifting downwards but they take an awful long time to get there.

Are performance fees included in the OCF? I haven't noticed them appearing.

bowlhead99

Performance fees are not included in ocf, which is the Ongoing Charges Forecast.

With funds that levy performance fees in the good times, you can't forecast that there will be a charge, because the idea is that they only earn it on out performance. So if there is zero profits, or losses, there won't be a charge. Hence, no ongoing charge is forecast because they can't do that without making implied performance claims.

Straight management fees and accounting fees and admin/ legal fees get forecasted/ estimated and included in an OCF but performance fee is on top.

By contrast, a quoted TER for last year will include performance fee because it is a type of expense, in accounting terms, and TER is Total Expense Ratio. But not necessarily useful for planning next year.

You're right of course that the appropriateness of a performance fee depends on the benchmark - what are they trying to achieve and are you happy to pay them ifthey do?

Sometimes you can get a free ride on performance fees if you buy in just before the fund value goes up back to a high watermark level where they've already charged a fee. So it's worth reading small print to see what you're paying for, whether the manager's interests are aligned with yours and whether you might pay for mediocrity if the benchmark isn't challenging.

InvestInPoker

will invest

InvestInPoker

Prospectus published today


https://woodfordfunds.com/our-funds/wpct/prospectus/

Mistermeaner

Forgive my ignorance in such things; if I want in do I have too apply via the prospectus or there some mechanism under which I can purchase via my s+s isa ?

Is it possible to hold IT's in an s+s isa?

steelbru

You can apply via some ( not sure if all ) on-line trading platforms - I was notified today by H-L that I could apply ( they also say they will be able to give enhanced number of shares if the offer is over subscribed and numbers of shares allocated are cut back from what was applied for.)

Yes, you can hold an Investment Trust in a Stocks and Shares ISA - an IT is a share.