Woodford Equity Income - I really don't get today's drop?

Johnnyboy11

I really don't get why Woodford's Equity Income Accum. has dropped 0.5% today. UK stock markets have been positive for the last few days, and the top 10 holdings (45% of the fund) are significantly up today. The GBP is flat-ish, so that's not the reason.



What am I missing?

londoninvestor

I can't quite reproduce the number, but if you're digging into it, remember the fund prices at 12.00 daily, whereas when you see a stock that's "up today", it's relative to yesterday's close (4.30pm).

e.g. Provident Financial was down about 3%, measured from 12.00 31 Jan (532.20p) to 12.00 1 Feb (516.40p). It's not a big enough holding for that to bring the whole fund down 0.5%; but it's an example of how looking at the daily changes in each stock doesn't explain the whole performance of the fund from one day's pricing point to the next.

masonic

I'd look to the other 55% of the portfolio, including the ~40 unquoted investments, which are likely to be quite volatile.

Johnnyboy11

Thanks for the replies, just venting my frustration at more underperformance from Woodford. I keep telling myself, just another few months, he's bound to turn it around...

masonic

This is quite a different fund and investment strategy than the one he employed so successfully years ago. And quite a different economic climate. Horses for courses...

bowlhead99

masonic wrote: »

I'd look to the other 55% of the portfolio, including the ~40 unquoted investments, which are likely to be quite volatile.

The 40 unquoted investment are, as the name suggests, not quoted on a stock exchange, so by contrast to the rest of the portfolio, they're not going to go up and down on a daily basis- there isn't a daily price. They will be mostly quite static because as a fund manager there's not a lot of point doing a full valuation exercise more often than every quarter or so, with a rolling delay after you get the information in from the portfolio company.

Of course, when they do get around to pushing the valuations through, there will be some movement which might not tie into the public markets for that day and may be larger because it covers a reasonable period from the last time it was done.

I agree with the first reply on the thread that if you're looking at a fund's published value from its most recent valuation point, compared to its previous valuation point, that might be quite a different result (in both direction and magnitude) from the movement in the market index from yesterday's market close to today's. Even if the fund is designed to be an index tracker - which this fund isn't anyhow

talexuser

Johnnyboy11 wrote: »

I keep telling myself, just another few months, he's bound to turn it around...

He made me a bomb well over 20 years at Perpetual, sold half and went into the Woodford fund at launch and was quite happy for the first 3 years. But sold out of Perpetual some years ago when Barnett started to flatline, and sold out of Woodford a while ago when it became apparent his 5 years figure could never recover to top the table. This is not advice, and I could be quite wrong if we have a real crash, and a couple of years later he turns out to have been a great investment.

Alexland

bowlhead99 wrote: »

The 40 unquoted investment are, as the name suggests, not quoted on a stock exchange, so by contrast to the rest of the portfolio, they're not going to go up and down on a daily basis- there isn't a daily price. They will be mostly quite static because as a fund manager there's not a lot of point doing a full valuation exercise more often than every quarter or so, with a rolling delay after you get the information in from the portfolio company.

Is there not also a potential conflict in interest on the fund manager being both measured on the performance of the fund and taking a view on the value of the unquoted assets? It could perhaps enable a fund manager to smooth over a period of underperformance.

Alex

masonic

bowlhead99 wrote: »

Of course, when they do get around to pushing the valuations through, there will be some movement which might not tie into the public markets for that day and may be larger because it covers a reasonable period from the last time it was done.

Yes, that was what I was alluding to, although I could have worded it better.

Thrugelmir

masonic wrote: »

I'd look to the other 55% of the portfolio, including the ~40 unquoted investments, which are likely to be quite volatile.

Likely to be revalued on the publication of trading results.

Wildsound

To quote the wise words of Chuck D and Flavor Flav - "don't believe the hype"