Woodford Concerns

arnoldy

My guess
1 - 50p in the £1 when it gets unsuspended next year


In which case some of the Hargreaves Landsdown Multi manager funds are in serious trouble. Some of these funds have 12%* invested in the gated Woodford fund and so you are looking at a 6% loss if you hold on the 50% train wreck at the end.


*It used to be even more but they sold down in their own funds whilst simultaneously pushing it on the poverty/wealth 50 list.


The Woodford - Hargreaves Landsdown - Link Solutions shenanigans has been somewhat of a nasty smell in the room.

talexuser

arnoldy wrote: »

The Woodford - Hargreaves Landsdown - Link Solutions shenanigans has been somewhat of a nasty smell in the room.

I agree, but count HL as the majority smell. Every fund manager can fail, so if DIY need to keep an eye on things and decide when the fees are no longer worth it - individual responsibility. Many unsophisticated investors have come to funds after a decade of their savings being decimated by central bank policies. They relied on online advice and star manager articles never thinking this result was on the cards, despite past performance is no etc etc etc. Many platforms and brokers raised concerns and even sell notices on Woodford a good year or more before it imploded. HL keeping it on the select list until the day it closed is criminal, and the financial links apparent now need more than a couple of bosses giving up their bonus this year.

itwasntme001

Does anyone know if i bought woodford income (INC) fund before the ex-div date but it settled 2 days after the ex-div date, would i be entitled to the dividend?

ColdIron

Look at your contract note, if the trade date was before ex date you are entitled to the dividend. Settlement date is unimportant in this respect

itwasntme001

ColdIron wrote: »

Look at your contract note, if the trade date was before ex date you are entitled to the dividend. Settlement date is unimportant in this respect

Yeh the trade date was before the ex-div date. Are you sure settlement is not important? I also read the record date is the most important, but no idea what it is for woodford.

Malthusian

arnoldy wrote: »

In which case some of the Hargreaves Landsdown Multi manager funds are in serious trouble. Some of these funds have 12%* invested in the gated Woodford fund and so you are looking at a 6% loss if you hold on the 50% train wreck at the end.

A 6% loss will be lost in the noise in the long term. It will hurt but "serious trouble" is going a bit far.

If you're in the HL MM Income & Growth Fund (the one with 12% in WEI) you're spending roughly 1.7% every year on unnecessary additional charges. Over a five year timeframe, that will lose you significantly more than HL's bad decision on WEI.

The WEI debacle has made it (even more) likely that HL MM funds will underperform the market, but anyone who cared about that wouldn't hold HL MM funds in the first place.

What could hurt significantly more is if large numbers of HL MM holders withdrew from the fund, which (assuming net outflows) would require HL to cash in liquid assets to meet withdrawals, which would mean the suspended WEI fund would make up a larger percentage of the fund.

In the extreme scenario, the HL MM fund might have to suspend to withdrawals as well, and only meet redemptions once WEI could be liquidated one way or another.

(This would ensure that everyone selling HL MM got their fair share of liquid assets and WEI proceeds. Currently any withdrawals from HL MM are based on the fictitious price of WEI as at the time of its suspension, and this fictitiously priced withdrawal is funded by selling from the liquid assets.)

However if a rush for the exits in HL MM funds was going to happen, you would assume it would have happened by now. Most HL MM holders are oblivious or don't care. Or they pay HL for advice, who naturally will tell them to hold on.

ColdIron

itwasntme001 wrote: »

Yeh the trade date was before the ex-div date. Are you sure settlement is not important? I also read the record date is the most important, but no idea what it is for woodford.

Might be worth a read
https://www.fool.com/knowledge-center/does-the-settlement-date-have-to-occur-before-the.aspx

itwasntme001

ColdIron wrote: »

Might be worth a read
https://www.fool.com/knowledge-center/does-the-settlement-date-have-to-occur-before-the.aspx

So what really matters is the record date. For simple single stock it would be easy as its just 2 days after ex-div, but for a OEIC i am not sure.

itwasntme001

Also for OEICs you need to consider equalization as well...

itwasntme001

agh i am never buying INC OEIC funds ever again!