Woodford Concerns

Alanuk

This may be a non related question, and I may be posting in the wrong place. I have 1 year fixed savings account with Atom Bank, which matures this month. I notice that Money Saving Expert no longer list Atom as giving the best one year fixed rate even though Atom currently advertise a 1 year fixed rate of 2%, currently better than the best deal mentioned on MSE, that of Smart Save at 1.92%. Is there a reason for Atoms omission?

I am not fully up to speed with the situation with Mr Woodwards investment fund, but know that investors in his fund have been prevented from withdrawing their funds. I also notice that Mr Woodwards fund invested £10 million in Atom in July. Should I steer clear of Atom and move my funds to another provider, albeit for a lesser return ?

Terry98

Atom's best rate is now 1.83% which is most probably why it's not showing on the best deals.

Atom is also FSCS protected which means the first £85000 of your savings are protected.

Interest rates and FSCS details shown here https://www.atombank.co.uk/fixed-saver

AnotherJoe

Given NW's propensity for bad decisions I can see where the concern comes from but if something did go bad with Atom your money is protected. I wonder how anyone would have done who shorted every company he invested in since he left Invesco? I suspect pretty well.

Sailtheworld

If it was so bleeding obvious that Woodford's picks were rubbish why did people invest with him?

It's as if their analysis didn't go beyond the name on the fund. Of course they're wise after the fact but they still believe in star managers like Terry Smith. It's called cognitive dissonance.

AnotherJoe

Sailtheworld wrote: »

If it was so bleeding obvious that Woodford's picks were rubbish why did people invest with him?
Because they didn't look at who he was investing in.
Because they didn't notice that his investing style changed.
Because they didn't do anything even as one company after another he invested in had massive issues?
Because they didn't bale out after he jumped the shark when he bought IH.
Because trusted and reputable companies like HL (especially HL who should be ashamed) didn't dump him years after they should have but instead continued to recommend him and only bolted the stable door after the horse was dead.

It's as if their analysis didn't go beyond the name on the fund.
Indeed. Nail on the head.
Of course they're wise after the fact
Who are "they"? The clueless / naive who stuck with him (trusting their foolish advisers) or those that either didn't invest in the first place or who got out when the significant change of strategy, dodgy dealing (Guernsey and intertwining of WEIF and WPCT) and string of poor choices became clear?
but they still believe in star managers like Terry Smith. It's called cognitive dissonance.

Again, who are "they".
If Terry Smiths companies start going bust one after the other and if he changes from buying household names to physics defying scam companies, I'll be first out the door.
Trust but Verify.


... and another thought, anyone who has an adviser who recommended Woodfords funds within the couple of years and certainly since WPCT bought IH or since the WEIF/WPCT share swap, should change advisers since advisers are meant to know this stuff.

Sailtheworld

The 'they' is those who invested, lost money, are wise after the fact but, instead of taking a step back, play the blame game instead of looking at the root cause of the problem.

92% of fund managers under-perform their indices over 15 years. Woodford under-performed and the chances are that Terry Smith will too. He had to issue an apology about his emerging equities investment trust so he's hardly infallible. I like the way he has a different domain name for each fund - makes inconvenient truths easier to hide from the punters.

AnotherJoe

Sailtheworld wrote: »

The 'they' is those who invested, lost money, are wise after the fact but, instead of taking a step back, play the blame game instead of looking at the root cause of the problem.
Can you give an example of one of those people or companies? And what is the root cause if its not being incompetent at choosing tech companies and analysing the books of major companies?

92% of fund managers under-perform their indices over 15 years. Woodford under-performed and the chances are that Terry Smith will too.

I very much doubt that since after 9 years of significant overperformance and with a global selection of solid household names its unlikely they will significantly underperform the relevant indexes over the next 6 by enough to be under over the 15. Odds must be he will overperform even if just due to past performance.

Starting from now for the next 15, yes thats a possibility but unlikely anyone could choose as bad as Woodford has across all his funds. Look at the junk he's just bought. Again, more badly performing companies. BT and IAG are little more than pension funds that happen to also run a company.

He had to issue an apology about his emerging equities investment trust so he's hardly infallible.
Strawman argument. Who said he was infallible.
I like the way he has a different domain name for each fund - makes inconvenient truths easier to hide from the punters.

Of course there's a different name for funds in different domains ! If you dont wish to invest in EM its best if the fund name includes EM isnt it? And it rather than "hide" anything it makes it clearer ! Talk about chucking the kitchen sink at someone. Maybe "Smith" is a common name and thats a ruse to hide his performance?:rotfl:

Sounds as if you should steer clear of Smith when it comes to EM just like you should steer clear of Woodford when it comes to biotech, impossible tech, startups, large companies, high dividend paying companies , unlisted companies, companies listed on the Guernsey stock market or on AIM, companies hes contractually bound to make massive cash infusions to to keep them afloat, ...... OK, everything he touches pretty much. If he invested in something i hold, I'd be worried and would look again at it though i guess by pure chance he will occasionally buy something good.

Sailtheworld

AnotherJoe wrote: »

Of course there's a different name for funds in different domains ! If you dont wish to invest in EM its best if the fund name includes EM isnt it? And it rather than "hide" anything it makes it clearer ! Talk about chucking the kitchen sink at someone. Maybe "Smith" is a common name and thats a ruse to hide his performance?:rotfl:

The 'usual' way of doing this is that if someone wanted to buy, say, a Scottish Widows fund they'd head to Scottish Widows in the first instance. Smith doesn't do that - he has separate domain names. I know why.

AnotherJoe wrote: »

Sounds as if you should steer clear of Smith when it comes to EM just like you should steer clear of Woodford when it comes to biotech, impossible tech, startups, large companies, high dividend paying companies , unlisted companies, companies listed on the Guernsey stock market or on AIM, companies hes contractually bound to make massive cash infusions to to keep them afloat, ...... OK, everything he touches pretty much. If he invested in something i hold, I'd be worried and would look again at it though i guess by pure chance he will occasionally buy something good.

Or, without the drama, invest by all means but expect, over the longer term, under-performance against the indices but with higher charges.

If someone can anticipate future out or under performance of a fund against an index then good on them (although I'd question why they don't use this skill to pick stocks themselves). They'll know just when to jump.

Those with this skill should ask themselves how much they lost on Woodford and reflect.

Moe_The_Bartender

Sailtheworld wrote: »

The 'they' is those who invested, lost money, are wise after the fact but, instead of taking a step back, play the blame game instead of looking at the root cause of the problem.

92% of fund managers under-perform their indices over 15 years. Woodford under-performed and the chances are that Terry Smith will too. He had to issue an apology about his emerging equities investment trust so he's hardly infallible. I like the way he has a different domain name for each fund - makes inconvenient truths easier to hide from the punters.

Smith didn’t have to apologise for only making 23% over three years. The fact that he did says much about him and that he sets the bar very high. He then went on to put more of his own money in.

Malthusian

AnotherJoe wrote: »

Given NW's propensity for bad decisions I can see where the concern comes from but if something did go bad with Atom your money is protected. I wonder how anyone would have done who shorted every company he invested in since he left Invesco? I suspect pretty well.

The really bad ones you couldn't short because they're unlisted. To short a company you have to find someone willing to lend you the shares for a given time period, sell them immediately on the open market, then buy them back again to repay the loan. All those steps are difficult or impossible with unlisted or otherwise illiquid shares.

If you shorted all his liquid investments, I suspect you might have done pretty badly as not all of Woodford's holdings have gone bust or tanked. (If they had his performance would be much worse.) The money you made on shorting the likes of Provident Financial could easily be cancelled out by the average or good performance of shares that reflected the performance of the bull market.

Shorting shares isn't just holding them upside-down.