Woodford 1 year on

talexuser

Trustnet says that Invesco Perpetual High Income has dropped out of the 1st quartile for 3 year figures growing around 64% (107 out of 273 in All Companies).

Alternatively Woodford after 12 months has grown 20% (with only 3 dividends so far) doubling the average of equity income returns, and triple a passive all share.

I halved my HI into Woodford when he started, anyone sticking with High Income, or is it too soon to make up your mind to jump ship?

stephend05

Isn't his new fund mirroring his old one with HI? Is it not reasonable then to combine his record for both when making your decision? He has a new team, but it is still under his stewardship and Woodford said himself that his new equity income fund with CF Woodford would be more of the same.

If Invesco Perpetual HI is taking a dip since his departure and Woodford is continuing his success then I'm not sure the short track record of the new fund is as significant as it would normally be when deciding. I'm looking at whether the size of the new fund is going to become a problem with so much money flowing in it won't be very nimble, but he has shown an ability to handle this before.

Tricky decision. I would go with the new fund and stay as long as he manages it. Would be interesting to see what more knowledgeable people think though...

talexuser

stephend05 wrote: »

Isn't his new fund mirroring his old one with HI? Is it not reasonable then to combine his record for both when making your decision?

Up till recently the top 9 out of 10 holdings were the same, but the rest has significant differences, apart from the obvious different weightings. Mark Barnett now runs HI, so you can't say Woodford has any responsibility for performance since he left. Barnett had a good reputation when running smaller company funds, but was untested with a fund the size of HI. He has done 14% in 1 year compared to Woodford.

Woodford has always suffered from the size argument as long as I have been in HI (now over 20 years) from when he reached 2 b in funds right up to 20 b or whatever. The Woodford fund is now 6 b, and HI has shrunk to 12 b. Woodford has not done badly considering he was captaining supertankers of funds that couldn't turn on a sixpence.

Kendall80

Its still a little early to make solid comparisons. Graphing his fund alongside the uk equity income bench or UK all companies you'd have to say hes doing well so far. I only wish i'd allocated more to the UK

block10

Both funds have performed done well apparently, with not much between them:

A year ago this week, as Neil Woodford’s new fund opened to investors, there were two big questions: could he replicate the success of his 26-year tenure at Invesco Perpetual, and could his successor, Mark Barnett, step out from his shadow? Twelve months on, the answer to both questions appears to be “yes”.

Woodford’s new equity income fund opened to investors last June, while over at Invesco, Mark Barnett was only just getting comfortable, having assumed responsibility for his predecessor’s funds two months earlier.

A year on, performance for their funds has beaten both the indices and the wider industry. Clients have backed Woodford in droves, but, for his part, Barnett certainly has not suffered an exodus.

According to FE Analytics, the CF Woodford Equity Income fund – whose offer period for investors opened on June 2, 2014 and began trading on June 19 – has produced a return of 20.04% for the year ending June 2, 2015.
This compares with the FTSE All Share benchmark return of 6.52%, and an average return for UK equity income funds of 9.47%, according to figures from FE Analytics.
On the fund’s positioning, Woodford said in a statement sent to Financial News: “The portfolio that took shape last summer reflected the cautious view I had on the global economy at that time. As a consequence, we were very careful in building a portfolio that avoided companies that we believed were vulnerable to a faltering global economy.

“Turnover has been characteristically low, reflecting our long-term investment horizons. We have continued to build exposure to several core holdings, focusing particularly on those that have displayed periodic share price weakness.”
He listed GlaxoSmithKline, Drax and Rolls-Royce as examples of those holdings.

Meanwhile, the performance of Barnett, Invesco’s head of UK equities, has also been strong, although not quite as striking as that of Woodford.


Taking the Invesco Perpetual High Income fund – which is the biggest of the three funds managed by Barnett – returns have been 13.79% during the same period, according to FE Analytics. This is also the fund that Woodford managed from February 1988 until March 2014, during which time he returned nearly 2,200% to investors.


Client movements tell a similar story. Woodford’s equity income fund has been one of the top-selling single funds in Europe during the year, with so many investors piling in that his boutique outsold Henderson Global Investors during 2014, despite only being open for investment since June.

Woodford’s assets have swelled to £6.2 billion, with institutional investors such as Kent County Council and Dentists’ Provident also boosting inflows.
This week, Woodford’s fund was listed among the five most popular income funds picked by Hargreaves Lansdown’s pensions drawdown investors.

But so was Barnett’s fund. Fears of an investor rush to the exit have failed to materialise – its assets stood at £12.9 billion, according to the fund’s May 2015 factsheet, slightly down on £13.9 billion in October 2013, when Woodford’s departure was first confirmed.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “Given the amount Mark has had to manage – Woodford leaving, taking over the fund, managing the equity team and delivering a return – that’s a difficult job for anybody.

“[His performance is] indicative of a manager who’s very talented. He would have had to put in a lot of effort to go around and see existing investors which is time away from running the fund.”

Barnett’s investment style – identifying undervalued companies and investing in them for the long term, irrespective of short-term movements – has often been likened to that of Woodford.

Indeed, four of the top five holdings for both their funds – AstraZeneca, Imperial Tobacco, British American Tobacco and BT, albeit in different orders – are the same. Interestingly however, GlaxoSmithKline, Woodford’s third largest holding at 6.23%, does not feature in Barnett’s top 10.
A statement from Invesco Perpetual described Barnett as a “truly active stock-picker with an exceptional track record for nearly 20 years” at the firm.
As for Woodford, it has not only been his striking performance, but also the way he has disrupted the industry that has raised eyebrows over the past 12 months. He has set new standards for disclosure, providing a full breakdown of the fund’s holdings, and also looked to adopt a lean cost structure by setting up in a business park on Oxford Business Park in Cowley.
But fund performance over the past year has been his bread and butter. And Khalaf added: “Woodford has an uncanny sense of the broad direction of the economy and how that affects various sectors, that’s what sets him apart.
“He’s a very good stock-picker but he combines that with a great reading of the economy as well.”

JenniferK

Whatever happened to the prospective 4% dividend yield? Doesn't seem to be anywhere near it.