New Woodford Fund

dunroving

InvestInPoker wrote: »

Yep and this is precisely why I am putting my UK smaller companies allocation with him in this. I rarely use active funds, although I do have a couple they have to fit the following criteria for me

1 - I need to be convinced said manager can out perform index funds in the relevant area over time, and that the out performance is not due to luck. I think this is clearly true for Woodfords flagship Equity Income fund, 25 years of doing the same thing at IPHI makes it incredibly unlikely it was just luck

2 - I need to be convinced said manager is in for the long haul and wont vanish somewhere else to do another thing after a few years. From everything I have read I am convinced NW is in for the long haul (it is his own house now after all) and we wont be left hanging in 8 years time.

3 - I need to be convinced the fund/manager is not going to change his approach to trying something new where point 1 wont apply anymore - like Anthony Bolton. This is a bit difficult here. It's a little different from having massive holdings in drug and cigarette companies. Like bowlhead said we know he has used exposure, albeit on a small scale, to this type of thing for his flagship funds before for a long time. That is enough to convince me.

One thing I found interesting whilst reading the prospectus was that the start up investments will not happen immediately. It appears our money will be invested in large established companies to start with and then gradually moved over to start ups as opportunity arises. I like this as it implies proper consideration and time will be spent choosing when and where to deploy the investment in start ups. It also means our money wont be lying around as cash for a few years which would be a huge waste. I dont know what we can expect for the first while whilst that is going on, probably something close to his flagship fund?

Anyway I am in for a 30 year timeframe. I would like to place this in an ISA wrapper but my allocation for this year is used. I am unsure if I can apply now and then wait for the new tax year to start or if I have to wait for the new tax year to apply? Probably a question for my platform that one.

EDIT :

lol

Have you thought about switching from another ISA fund? Fidelity's site now is showing that you can invest in the new Woodford Trust, and it just allowed me to set up as a switch of capital from one ISA fund to another. The only caveat was that during the offer period (6 weeks or so?) it looks like the switched funds will be held in cash if I am reading the note correctly - text is below:


"During the offer period, your money will be held in a dedicated account by Capita Registrars Limited (the trust’s authorised share registrar for the Initial Public Offering). On 15th April 2015, it will be invested into the trust on a £1 per share basis and the shares in the Woodford Patient Capital Trust plc will be subsequently allocated to your account."


- I assume this means if I apply to switch now (during the offer period) they will disinvest the £3k I have applied to switch and leave in cash for 6 weeks - are other people reading it that way too?


So I cancelled the switch and will wait until closer to April. The funds I want to switch are in a fund that is generally rising, so I don't want to miss out on 6 weeks of growth.

bowlhead99

dunroving wrote: »

- I assume this means if I apply to switch now (during the offer period) they will disinvest the £3k I have applied to switch and leave in cash for 6 weeks - are other people reading it that way too?

You're right you can switch out of an existing holding and into the new one, but the new one doesn't exist yet, so after selling the old fund which will give you settled cash in a couple of days, that cash will just sit as a pending application until it can be deployed into new shares in mid April.

So if you don't want to be out of the market yet, don't get out of the market.

You can leave it until much later before kicking off the application but will need to leave a few days for the cash to settle from your exit of fund 1 ahead of the deadline to subscribe in cash for the new trust launch, as they will need cleared cash to do it. On the link that TCA posted it says the cutoff is earlier if you're funding via a fund switch, than if you're just subscribing fresh cash.

blizeH

I'm currently moving everything away from Charles Stanley due to their fee structure and moving to iWeb.

I notice that this IPO isn't available through CSD though... should I be patient and wait for it to come to iWeb, or is there a chance it won't be available by the time that happens?

Thanks

bowlhead99

blizeH wrote: »

I notice that this IPO isn't available through CSD though... should I be patient and wait for it to come to iWeb, or is there a chance it won't be available by the time that happens?

I guess that's your typo, you mean it is available through CSD (links earlier in the thread) but not yet at iWeb? I mean, you can apply through CSD now but it won't appear in your account until April because it doesn't launch until then.

It may or may not ever become available at iWeb before launch. After launch you'll definitely be able to get it at iWeb. You can't get it at CSD yet because it hasn't launched but you will be able to get it at launchprice when it does.

So you seem to be in a quandary of whether to move now and get on your preferred fee rates at IWeb for your whole portfolio, but then maybe have to buy this fund on the open market; or stay with CSD for another couple of months and get in on this one at Day 1, before paying a transfer fee to transfer it over.

Given you don't know how much of a price change there will be between Day 1 and Day 2, and presumably it is only going to be a small piece of your portfolio anyway, there doesn't seem to be a lot of point basing the timing of the whole transfer of your portfolio on whether you can catch the launch of this at CSD and then transfer it out efficiently.

TCA

blizeH wrote: »

... should I be patient and wait for it to come to iWeb, or is there a chance it won't be available by the time that happens?

I was told by iWeb that they are definitely NOT participating in the Woodford IPO. You will of course be able to buy the shares subsequently via iWeb when they are listed on the stock exchange.

Porcupine

bowlhead99 wrote: »

That's just an example but in the alternative investment space where performance fees are prevalent you do sometimes get these 'zombie' funds which such a slim chance of being winners that they just bobble along for a while with no leadership before liquidating all their unquoted assets in a firesale at big discounts to NAV.

To some extent, though, the fee strategy aligns with the 'Patient Capital' idea. Research and buy stock in 100 decent companies. Then just hold them. It's closed-ended so they don't need to deal with cash in/out flows. 'Patient capital' buys and holds, it doesn't needlessly trade, so doesn't need management effort to oversee that. As and when events happen (say these companies get bought by Apple/Google/Pfizer/whatever) then you have to handle that. But otherwise it can quite happily tick along with no management effort at all. They may wish to have a slightly more hands-on approach with their investees' management - but they don't have to.

I assume what we're talking about is the management fee, and other fees (dealing, admin) that are part of the TER will still exist like they do for other funds?

bowlhead99

Porcupine wrote: »

I assume what we're talking about is the management fee, and other fees (dealing, admin) that are part of the TER will still exist like they do for other funds?

Yes, they have some indications in the prospectus - some costs will probably be linked to NAV while others will be broadly independent ; I didn't bother adding them up but a couple of hundred thousand a year on a couple of hundred million fund, is only 10 basis points, so I don't usually spend too long looking at the other Es in the TERs beyond management fees unless they look astronomical.

Ryan_Futuristics

I'd imagine a fund like this would actually put the management fees to good use ...

They can't just pick stocks off a screen, or construct an index and over or underweight sectors ... They've actually got to go out and interview managers and assess assets

We forget how much management fees have fallen ... There are still basic UK index trackers that charge more than Woodford Equity Income ... I suspect once we've got another 10 years data to look back on, Vanguard are gonna need a whole new spiel to sell their products (or they'll have launched their Windsor fund over here)

Henderson UK Tracker 1.24%
Allianz UK Index 1.24%
Virgin FTSE All Share Tracker 1%

Thrugelmir

bowlhead99 wrote: »

I don't really buy the idea that the economy will benefit greatly from the existence of the fund.

Buy an Apple product. It says designed in the US. Manufactured in China. What it fails to say is that the micro electronics were designed in the UK.

bowlhead99

Thrugelmir wrote: »

Buy an Apple product. It says designed in the US. Manufactured in China. What it fails to say is that the micro electronics were designed in the UK.

Sure, and I've made money from shares in ARM, for example.

The point was just that we shouldn't believe marketing spin that the fund is being launched from an altruistic desire to improve UK industry or that UK businesses have no funding options without it. They are simply bringing some new guests to a party that already exists. They are providing a slightly unique mode of transport but some of the guests were already going to come to the party by limo, coach, minibus or taxi. No denying that extra guests are always welcome.