Woodford Predictions

Prism

talexuser wrote: »

Ironically Best just published their latest top rated funds lists and Woodford comes out way out top of their Income sector recommendations over 3 years, and 16% ahead of the Vanguard UK Income index. Naturally we have to wait to see how it all pans out over 5 years and more, but I'm always amazed how those that profess to adhere to long term investing react to relative short term performance, let alone how tracker fans try to pretend there are no managers that consistently outperform over the long term when there actually are a few.

I'm not sure who Ironically Best is but for comparison Trustnet can list all 85 funds in the IA UK equity income sector and Woodford Equity Income comes 73rd in the list currently. It has made a total return of about 16% over the last three years which is pretty poor. However we probably should wait to see how well it does after 5 years, but its not looking good. My reason for owning his fund is simple though - the holdings are mostly a collection of large average companies and small risky ones

bostonerimus

Linton wrote: »

I dont see that passive funds provide any more certain returns than active ones, arguably the reverse especially if the index itself is highly volatile. Active funds can be managed to reduce volatility. If you look at the UK All Companies sector and sort by Trustnet Risk score out of some 242 reporting funds the FTSE100 trackers are all in the highest quartile and the FTSE AllShare trackers in the 2nd highest quartile.

A hypothetical managed fund that succeeded in continuously generating the long term average return would show up in the statistics with a wide variation about the index. But that would say more about the index than the fund.

My contention is that removing the bias and strategies of the active manager allows one to better assess the possible future performance using past market statistics. I'd like to have good return with small standard deviation and I think the best way to do that is with a portfolio of rebalanced index funds, it certainly won't get you the maximum possible return.

Linton

If you look at the graphs Woodford has only done badly since July 2016. Prior to then he was at worst matching the FTSE All Share but mostly well outperforming it. From the start of his fund until June 2016 he was showing double the return of the index. So perhaps a little early to make judgement.

bostonerimus

Linton wrote: »

If you look at the graphs Woodford has only done badly since July 2016. Prior to then he was at worst matching the FTSE All Share but mostly well outperforming it. From the start of his fund until June 2016 he was showing double the return of the index. So perhaps a little early to make judgement.

I agree, long term is what matters and maybe Woodford will be laughing when he survives the next crash better than most. If anyone has money with Woodford I hope that happens.

talexuser

Prism wrote: »

I'm not sure who Ironically Best is

Best Invest do their own top funds and "dog funds" lists regularly, and it is interesting to see and compare how different platforms reach their respective recommendations. The irony is they still recommend this fund in the sector as other multi managers pull out. A contrarian investor might say it is a great time to buy, or even top up.

Thrugelmir

bostonerimus wrote: »

I agree, long term is what matters and maybe Woodford will be laughing when he survives the next crash better than most.

A good company remains a good company, likewise a bad company remains a bad company, irrespective of the direction a market moves.

economic

Thrugelmir wrote: »

A good company remains a good company, likewise a bad company remains a bad company, irrespective of the direction a market moves.

and a good company can turn into a bad company. and vice versa.

bostonerimus

Thrugelmir wrote: »

A good company remains a good company, likewise a bad company remains a bad company, irrespective of the direction a market moves.

A good company that doesn't deliver what it's customers expect will have a hard time surviving.

Thrugelmir

bostonerimus wrote: »

A good company that doesn't deliver what it's customers expect will have a hard time surviving.

Amazon is currently trading on a P/E of 270. Has some delivering to do. To meet investors expectations. Let alone customers.

redux

Two years ago I had a modest lump sum of money to invest. I looked at Woodford or Fundsmith for a part of it. In mid Jan 16 there was a bit of a dip, and I made my mind up. Since that date Woodford is +5.3% and Fundsmith +59.8%

If there is a market dip ahead, which of those two is likely to be better afterwards, across 2 or 3 or 4 years?

As the BBC might disclaim, other funds are available. In the same time (23 months) my two pension funds, in a selection of investment trusts, are up 41% and 47%.

I recently saw an article from last June or July containing an interview with Mr Woodford. One notable detail was he had recently sold all of his holding in BAT, deciding it was now fully valued. He bought at £2.25 in the height of the tech shares mania, and sold at over £50. I worked out that in that timespan it was 19.6% a year. So being overweight in that and a couple of other tobacco companies shows where a fair amount of his success came from. But that's the past. Where is his next instinct or conviction move?.