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

Thrugelmir

Johnnyboy11 wrote: »

Whilst his fund is nominally up 10% in its near 5 years of existence, you need to factor in say 13% for inflation and 22% depreciation of the GBP in that time, and arguably he has destroyed a quarter of his investors wealth. For a £5Bn fund, that is a serious loss to UK savers.

Odd criteria to benchmark fund performance against.

talexuser

Thrugelmir wrote: »

Odd criteria to benchmark fund performance against.

Yes, speaking as devil's advocate who has already dumped Woodford some time ago he did do 40% in the first 3 years, which we were all very happy with. I remember when I was with High Income he was supposedly on the point of being fired when underperforming because not touching the the dotcom boom, then zoomed ahead afterwards since not losing money like rivals. He also sold all his bank shares just before the financial crisis which was another big boost. The criticism at those times was just as bad as now. Time will tell whether I was too greedy to sell out too soon, but it is looking difficult unless some big event changes things for him soon. A contrarian who believes in him should maybe be buying now?

ColdIron

During those two periods his reputation was built on what he didn't hold. Now the criticism is levied at him for what he does hold

londoninvestor

ColdIron wrote: »

During those two periods his reputation was built on what he didn't hold. Now the criticism is levied at him for what he does hold

Perhaps successful sector-picking then, unsuccessful stock-picking now?

talexuser

A couple of good points.

It's all hot air now and will take some more years to tell if he is right or another Anthony Bolton. People tend to forget he turned 1k into 26k over 25 years at Perpetual with a lot lower risk than most sectors, which was way ahead of any index, but that is all history now. I generally give a manager a couple of years of underperformance to come good against sector events or whatever, but sold Woodford after 3 and a half years on the way down because of some of the stock selection.

Mark Barnett at Invesco, who was once his deputy, is also an interesting example of recent performance.

masonic

It's not Woodford's first period of underperformance. As has been said of him in previous periods, he's positioned his portfolio for thing that haven't happened yet. Whether they happen in the future or not is anyone's guess.

fun4everyone

masonic wrote: »

It's not Woodford's first period of underperformance. As has been said of him in previous periods, he's positioned his portfolio for thing that haven't happened yet. Whether they happen in the future or not is anyone's guess.

He actually underperformed at Invesco between 2009-2013 when he left as well.

The current WEI fund has underperformed for nearly 4 years straight now. From mid 2015 till now it has been far worse than a mere all share tracker. 2016 and 2017 were particularly pathetic when it returned approx 3% and 0.7% respectively, during those years other funds sky rocketed way beyond that. It was very good in its first year though, when he appeared to stick to what he knew. After that it changed in makeup beyond what a "uk equity income" fund should be imo.

aroominyork

talexuser wrote: »

Here's an irony about defensive. The vast majority of my 20 funds were red yesterday, the Vanguard trackers between 2 and 3.5% down on the day. Capital protection Ruffer was at 0, Newton Global stood out a tiny fraction positive. Fundsmith was 0.65% up! A day means nothing but still interesting.

Fundsmith's valuation point is midday, before the US markets open. Your Vanguard funds were probably valued after Wall Street closed, so you can expect to see the hit on Fundsmith tomorrow.

Johnnyboy11

aroominyork wrote: »

Fundsmith's valuation point is midday, before the US markets open. Your Vanguard funds were probably valued after Wall Street closed, so you can expect to see the hit on Fundsmith tomorrow.

Might be offset by the GBP tanking, depending on the outcome of today's cabinet meeting...

davidquizer

I had £10,000 in that fund up till about 18 months ago. Even if footsie goes up your fund may go down because of what Mr. Woodford holds in there. I'm glad I got out I moved most of it into Scottish mortgage Investment Trust and have made a very handsome profit. Of course its profile is riskier, but its a top class fund and you only lose if you sell at the wrong time. I'm planning to keep that fund for many years.