Woodford Concerns

Thrugelmir

ZingPowZing wrote: »

Of the 1/4 million HL customers to be affected, my guess was that most did not consciously choose Woodford, but rather found they were invested in a slice of Woodford buried in the mix of holdings under control of their fund promoted on HL's site (like a sub-prime element).

Woodford had a long standing reputation built over many years at Perpetual. Much as Vanguard are now idolised in some quarters. (Even though the late Jack Bogle expressed reservations that trackers weren't suitable vehicles for every investment market).

talexuser

I'm positive I read one report soon after the gating that Mark Dampier was retiring, assuming it was a damage limitation exercise. Then no more, and as far as I know he is still working as "research director" till the end of the year?

https://www.hl.co.uk/news/mark-dampier

https://portfolio-adviser.com/mark-dampier-rakes-in-6m-as-woodford-investors-suffer/

https://www.ft.com/content/7f25713e-890a-11e9-97ea-05ac2431f453

bowlhead99

talexuser wrote: »

I'm positive I read one report soon after the gating that Mark Dampier was retiring, assuming it was a damage limitation exercise. Then no more, and as far as I know he is still working as "research director" till the end of the year?

The spin was that he and his wife's share sales were part of his plans to eventually retire 'at some point' after the end of the year. So, he was 'to retire' which a number of media outlets picked up on. The comment that the linked FT article got from him was that he had no 'immediate' plan to retire.

If I had a boatload of shares in my employer built up over a couple of decades working for them, and was in my early 60s, and hadn't sold any shares on the open market for 8-9 years, since when the price has risen strongly, and was inevitably going to retire at some point in the future, I would probably be looking to sell some - at some point that I wasn't in a close period pending results announcements etc.

Sailtheworld

Thrugelmir wrote: »

Woodford had a long standing reputation built over many years at Perpetual. Much as Vanguard are now idolised in some quarters. (Even though the late Jack Bogle expressed reservations that trackers weren't suitable vehicles for every investment market).

Neil Woodford is a real person and people don't want to admit they didn't go much further than noting his 'star manager' name on the fund before investing. He's receiving a lot of anger but it's just projected anger.

Trackers are completely different. If you buy a FTSE100 tracker and it tracks the FTSE100 downhill the only person you can really blame is yourself. The Daily Mail can't print photos of the FTSE100 SUNBATHING in a £25m mansion whilst drinking CHAMPAGNE!

It's just a massive blame game.

Thrugelmir

Sailtheworld wrote: »

Trackers are completely different. If you buy a FTSE100 tracker and it tracks the FTSE100 downhill the only person you can really blame is yourself. The Daily Mail can't print photos of the FTSE100 SUNBATHING in a £25m mansion whilst drinking CHAMPAGNE!

Irrespective of the funds actual performance. Woodford was not operating the fund in line with the published mandate. Even the best people can be overcome with belief in their own abilities. Normally people strike it lucky with one idea/concept. Repeating it again is the real challenge.

Sailtheworld

Thrugelmir wrote: »

Woodford was not operating the fund in line with the published mandate.

Do you mean the KIID? The thing everyone acknowledges having read when buying which acts to cover the behind of the fund manager in pretty much all eventualities?

The slightly large elephant in the room is that if you gathered all the people who actually read Woodford's KIID as opposed to those who just ticked the box you'd be hard pressed to rustle up a couple of 5 a side teams.

Voyager2002

Sailtheworld wrote: »

Do you mean the KIID? The thing everyone acknowledges having read when buying which acts to cover the behind of the fund manager in pretty much all eventualities?

I for one always used to read the KIID, but it never told me anything that I had not known before choosing the security as one to consider buying.

My only exposure to Woodford is a tiny holding in Patient Capital, and there is nothing in the KIID that would have warned me about the problems that have now become apparent.

bowlhead99

Voyager2002 wrote: »

My only exposure to Woodford is a tiny holding in Patient Capital, and there is nothing in the KIID that would have warned me about the problems that have now become apparent.

Really the prospectus is what you would look at if you wanted to get a more comprehensive list of risks or potential problems. The KID is just a cut down set of mandatory disclosure that you need to admit you've read before buying shares in it.

The KID does point you to a few things that are relevant such as:

General suitability:

An investment in the Investment Trust is only suitable for persons capable of evaluating the risks and merits of such an investment and who have sufficient resources to bear any loss which may result from the investment.

Specific risk factors noted include:

Unquoted securities may be less liquid, harder to value and more difficult to realise than quoted securities.

Future success depends on the continued service of certain key individuals.

The market price of the Ordinary Shares may not reflect their underlying value.

There was probably no point them also putting 'investment manager might make poor decisions', as this is taken as read with any fund.

talexuser

bowlhead99 wrote: »

If I had a boatload of shares in my employer built up over a couple of decades working for them, and was in my early 60s, and hadn't sold any shares on the open market for 8-9 years, since when the price has risen strongly, and was inevitably going to retire at some point in the future, I would probably be looking to sell some - at some point that I wasn't in a close period pending results announcements etc.

A very fair point. But when he and Woodford (to pay tax) sell some millions of quids worth of shares a shortish time before it all goes t*ts up, it will raise an eyebrow or two. And it being reported they have been friends for 30 years and live close to one another, and Dampier was his cheerleader on the wealth 50, it probably does not take a traceable phone call to wonder... allegedly.

Another other point is that around Oxford Woodford was seen as a local hero, a man who put his money where his mouth was (as opposed to many armchair generals) who supported British start ups and the local economy, British Pharma, Biotech etc etc, helping the university graduates land jobs and careers. It just all exploded too soon (which in no way forgives him of Income Fund responsibility), these startups take time, for the 19 that fail, the twentieth might soar with a hundred times growth wiping out all the losses of the others for a great gain. That was the 'patient' punt.

I also remember British Biotech (the company) in the 90s which went from nothing to a valuation of several billion based on nothing, if not fraud, where Woodford was the high profile man who supported the whistleblower against the board and saved a lot of people a lot of money by warning not to jump on the bubble (salivated over in every newspaper) before it eventually burst.

Sometimes things are not totally black but shades of grey (but the Income Fund saga looks pretty dark.)

AnotherJoe

ZingPowZing wrote: »

Furthermore, I wondered whether HL adopted the True Potential model of switching funds (inc Woodford's) in and out of their funds according to risk profile - charging transaction fees as they go.

:mad:
For crying out loud, how many times does it have to be stated for it to sink into your skull that HL DO NOT CHARGE TRANSACTION FEES FOR BUYING,SELLING OR TRANSFERRING BETWEEN FUNDS.

At least 20 i reckon, because that's probably how many times you've been informed of that in this thread. Maybe you could count the instances and that would help it percolate past your prejudices ?



I'm out.