Woodford Concerns

gadgetmind

Go back a couple of years and Woodford was being hailed as proof of active investment and the man who could do no wrong. Passive investors suggesting that "hot hands" were a myth and that reversion to mean was inevitable, were pointed in the direction of Woodford as proof they were wrong. Pointing out that these people had previously use Bolton as their "can't go wrong" hero a few years earlier didn't seem to sway them.

I wonder who will be next?

gadgetmind

This is worth a read. Note it was written in March 2018 when Woodford was struggling but hadn't yet totally blown it.

https://moneyweek.com/485293/the-star-fund-managers-who-fell-to-earth/

Prism

One thing to keep in mind is that although fund managers don't tend to change their style, investors in those funds can whenever they want. Anyone with much sense who was invested with Woodford from the Invesco should have got out a few years ago - or at least decrease their exposure to what was becoming a high risk fund. This is one example where the manager seemed to change style

If the quality style of Fundsmith, LT and others begins to underperform (though I'm not sure it would especially) then an investor can always change fund. If those managers begin to change their style then either don't invest or again make a decision .

aroominyork

Prism wrote: »

If the quality style of Fundsmith, LT and others begins to underperform (though I'm not sure it would especially) then an investor can always change fund. If those managers begin to change their style then either don't invest or again make a decision.

It's not only a change in style (like Woodford) that can lead to underperformance, it can also be a change in geography. Terry Smith follows a similar style in FEET as in Fundsmith but it isn't working well.

Edit. Just seen the article in gadgermind's post #1038 makes a similar point.

eskbanker

aberlyfid_2000 wrote: »

we can all wax lyrical here but the fact remains, woodford and his funds have been an unmitigated disaster

Yes, there are way too many useful and informative posts on this thread, what it really needs is some glib platitudes!

:wall:

hamishdog

I have this fund in my pension, about 4%.
As my pension is well diversified I am not too bothered, more annoyed that my IFA did not see the suspension or the lack performance.
A few questions

• What is anyone's guess what this fund will be worth when the suspension is lifted? I assume if you could be bothered to value all the current investments you could work this out.
• Will there be a mad dash to get money out, how will "system" cope with a mad scramble?
• If you want to re balance how many people will be buying this fund - not too sure if I am joking?
• Will it ever recover?

Moe_The_Bartender

hamishdog wrote: »

A few questions

• What is anyone's guess what this fund will be worth when the suspension is lifted? I assume if you could be bothered to value all the current investments you could work this out.
• Will there be a mad dash to get money out, how will "system" cope with a mad scramble?
• If you want to re balance how many people will be buying this fund - not too sure if I am joking?
• Will it ever recover?

The current investments are no longer being disclosed so even if they remained unchanged, which they won’t, you couldn’t value them. There's certain to be a rush for the door when or if suspension is lifted and because Woodford is likely to be still stuck with unlisted stocks, I doubt that suspension will be lifted as early as December.

Why would anyone buy the fund when there are so many similar alternatives when you strip out the rubbish? Woodford is toast.

dividendhero

hamishdog wrote: »

#

• What is anyone's guess what this fund will be worth when the suspension is lifted? I assume if you could be bothered to value all the current investments you could work this out.
• Will there be a mad dash to get money out, how will "system" cope with a mad scramble?
• If you want to re balance how many people will be buying this fund - not too sure if I am joking?
• Will it ever recover?

My guess
1 - 50p in the £1 when it gets unsuspended next year
2- Yes there'll be a dash for the exits
3 - Won't touch it, Woodford is the investment equivelent of Chernobyl. Why would anyone touch it when there's safer funds around?
4 - No, see above

itwasntme001

dividendhero wrote: »

My guess
1 - 50p in the £1 when it gets unsuspended next year
2- Yes there'll be a dash for the exits
3 - Won't touch it, Woodford is the investment equivelent of Chernobyl. Why would anyone touch it when there's safer funds around?
4 - No, see above

50% of the current price?

bowlhead99

gadgetmind wrote: »

This is worth a read. Note it was written in March 2018 when Woodford was struggling but hadn't yet totally blown it.

https://moneyweek.com/485293/the-star-fund-managers-who-fell-to-earth/

You do take a leap of faith with high-conviction fund managers. For example in the last paragraph of the article they mention a couple of investment trusts. Since the article was written 15 months ago, FGT is up about 25% while ARR is down about 10% (just looking at share price, not including divs). Both have a high conviction strategy for investing in UK listed stocks - ARR higher than FGT, but their picks worked out rather less well (in that short time period).