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

bostonerimus

You have bigger problems if you are concerned over a 0.5% drop in one of your funds. The solution might be to dump Woodford, but a few yoga classes.might help too.

Johnnyboy11

My concern is the 13% gross return over four years since inception. Factor in inflation, fees and the drop in GBP exchange rate, and my money might as well have been stored in a biscuit tin under the bed.


I have now sold all my holdings in Woodford, mainly due to exceptionally poor fund performance, detruction of wealth and the disconnect between the fund and the index it purports to out-perform. Equally troubling is that HL didn't throw Woodford's fund under a bus when it consolidated to the Wealth 50, and their video explanation was less than convincing. There's someting going on under the bonnet that I can't see or exlain, and therefore I'm out.

AlanP_2

Johnnyboy11 wrote: »

My concern is the 13% gross return over four years since inception. Factor in inflation, fees and the drop in GBP exchange rate, and my money might as well have been stored in a biscuit tin under the bed.


I have now sold all my holdings in Woodford, mainly due to exceptionally poor fund performance, detruction of wealth and the disconnect between the fund and the index it purports to out-perform. Equally troubling is that HL didn't throw Woodford's fund under a bus when it consolidated to the Wealth 50, and their video explanation was less than convincing. There's someting going on under the bonnet that I can't see or exlain, and therefore I'm out.

I suspect all that is going on is HL make good money out of Woodford investors. Wealth 50, like all marketing campaigns by commercial organisations, is designed to make money for them not for the customer.

bostonerimus

Johnnyboy11 wrote: »

My concern is the 13% gross return over four years since inception. Factor in inflation, fees and the drop in GBP exchange rate, and my money might as well have been stored in a biscuit tin under the bed.


I have now sold all my holdings in Woodford, mainly due to exceptionally poor fund performance, detruction of wealth and the disconnect between the fund and the index it purports to out-perform. Equally troubling is that HL didn't throw Woodford's fund under a bus when it consolidated to the Wealth 50, and their video explanation was less than convincing. There's someting going on under the bonnet that I can't see or exlain, and therefore I'm out.

I'd take this as a lesson learned. ie investing can be a bumpy road and you should have a diverse portfolio so you have some winners to balance out the losers. Do you have any rebalancing parameters or triggers to make you sell? You should so that you take dispassionate action when things like the fall of Woodford's fortunes happens. The situation also points out that it's dangerous to put faith in gurus as they might turn out to be false prophets or just unlucky.

Prism

Woodford is a value investor and its really difficult to maintain performance. You constantly have to find new beaten down companies which then recover or get bought. One of the reasons I am not sold on that style of investing. I much prefer the slow growth style of Terry Smith, Nick Train or David Gait

bowlhead99

Prism wrote: »

I much prefer the slow growth style of Terry Smith, Nick Train or David Gait

Smith and Train's global equity funds have both done a little over 130% in the last five years, close to 18% annualised.

Well done if you selected them over rival strategies. Still: slow growth style? 18% a year for half a decade? Smith's latest disclosed addition to his portfolio was Facebook and he's not hoping or expecting its revenue curve to flatten off to 3% a year.

Prism

bowlhead99 wrote: »

Smith and Train's global equity funds have both done a little over 130% in the last five years, close to 18% annualised.

Well done if you selected them over rival strategies. Still: slow growth style? 18% a year for half a decade? Smith's latest disclosed addition to his portfolio was Facebook and he's not hoping or expecting its revenue curve to flatten off to 3% a year.

What I did find interesting was that Fundsmith invested in Facebook around the same time that Scottish Mortgage reduced its holding citing that its rapid growth was now behind it, Certainly the likes of Unilever, L'Oreal, Kone, 3M and the like are not especially racey - just reliable. Admitedly there are some faster growth companies in both like Paypal but not the core of the style I would say

Alexland

bostonerimus wrote: »

You have bigger problems if you are concerned over a 0.5% drop in one of your funds. The solution might be to dump Woodford, but a few yoga classes.might help too.

That's one of the problems with active investing - knowing that it's so hard to outperform you can develop paranoia that you might have backed the wrong horse so are constantly looking for reasons to justify the movement compared to the market direction. At least when you go passive you can shurg your shoulders and say 'well unless the world ends it's probably ok' and the reasons causing the performance are usually widely reported and fairly obvious.

Alex

Johnnyboy11

bostonerimus wrote: »

I'd take this as a lesson learned. ie investing can be a bumpy road and you should have a diverse portfolio so you have some winners to balance out the losers. Do you have any rebalancing parameters or triggers to make you sell? You should so that you take dispassionate action when things like the fall of Woodford's fortunes happens. The situation also points out that it's dangerous to put faith in gurus as they might turn out to be false prophets or just unlucky.

Fortunately I do have a well diversified investment portfolio, courtesy of the helpful thoughts and insights on this forum. That said, I got caught up in the Woodford hype and ended up with 12% in my portfolio, hence my whinging. With the lacklustre proceeds of today's sale, which to be fair was still in the green over the four years, I will likely be topping up my VLS60, Fundsmith and Lindsell Train holdings, and keeping a bit back in cash for now.


Onwards and upwards, hopefully

Alexland

Johnnyboy11 wrote: »

I got caught up in the Woodford hype and ended up with 12% in my portfolio, hence my whinging. With the lacklustre proceeds of today's sale, which to be fair was still in the green over the four years, I will likely be topping up my VLS60, Fundsmith and Lindsell Train holdings, and keeping a bit back in cash for now.

Is there any possibility you are getting caught up with the Terry Smith and Nick Train hype? Are you doomed to be forever chasing the return that someone before you just achieved? How will you feel when the next style rotation occurs? The stocks in these two funds have been very popular recently.

Alex