Woodford Concerns

[Deleted User]

Moe_The_Bartender wrote: »

I'm amazed that he still has a job considering his recent performance. The amount of money investors have pulled out of his funds is staggering and yet Invesco still seem to back him.

But who would want to take it over?
A new manager would be constrained, as was Barnett when he took over from Woodford.
It's not like football where a new broom can come come in, buy half a squad while discounting the duds chosen by the previous manager. Changing the make-up of the fund is going to take a long time.

AnotherJoe

WPCT now under 30. Surely going to be closed. Just too embarrassing to keep it going, at the moment Shroders have plausible deniability
p.s. In 6 months there will be an interview with NW where he says if only investors had faith he would not have lost them so much money as the new management.

Reaper

A recent analyst note put the NAV at 29p, and I think it should probably be lower as the note was "on the basis that certain valuations, like cold fusion company Industrial Heat, could not be written down much further." I think most here would agree it can and should!
https://portfolio-adviser.com/projected-woodford-fund-losses-spell-trouble-for-wpct/

Also in that link Woodford Equity Income investors are expected to lose 32-42% according to a Link commissioned report (and I don't particularly trust Link). The worst losses are expect to be in the same shares held by WPCT.

I'd love to buy an under priced and unloved stock but I'm not sure the falls have ended yet. When Schroders take over at the end of the year I would expect them to:
1) Say things are dire to get all the bad news out, push the price down to a low starting point so their subsequent performance looks good.
2) Say whether they plan to keep going or wind it up.

I think that is the point I will decide whether to invest.

Brian65

Reaper wrote: »

When Schroders take over at the end of the year I would expect them to:
1) Say things are dire to get all the bad news out, push the price down to a low starting point so their subsequent performance looks good.

agreed
and they will charge higher fees
So I was dumbfounded by the sudden hike in the share price when the widely anticipated news of a manager change was announced.

Thrugelmir

talexuser wrote: »

Barnett defends his 4th quartile performance over 1, 3 and 5 years here

basically comes down to "I don't have the same stocks as Woodford" so that's dandy then.

Yet everybody says investing is for the longer term, i.e. over 10 years. While scrunitising short term performance tables. You cannot have it both ways.

talexuser

Thrugelmir wrote: »

Yet everybody says investing is for the longer term, i.e. over 10 years. While scrunitising short term performance tables. You cannot have it both ways.

The question might be what are the chances of bottom quartile performance over 5 years outperforming an equivalent fund (ie same sort of sector, not apples and oranges) that has done well over those years at the end of 10 or more years?

I dropped High Income a couple of years ago when it flatlined while Evenload on my watch list grew. Since then HI has lost around 10%, while Evenload had gained around 45%. Looking at the top ten holdings I can't see how that will reverse dramatically in the next 5 years or crash, but at the end of the day it's all a punt.

Thrugelmir

talexuser wrote: »

The question might be what are the chances of bottom quartile performance over 5 years outperforming an equivalent fund (ie same sort of sector, not apples and oranges) that has done well over those years at the end of 10 or more years?

Buying unfashionable stocks (i.e. value investing) has been out of vogue in recent years. A consequence of an extended bull market. Different strategies are required for different market conditions. Investors tend to become complacent when markets are benign.

talexuser

Entirely agree, we have a constant stream of articles saying value has turned the corner

However I'm still not sure if the value of HI will come good. I think QE and recent Brexit shambles has upset the calculations of some good long term managers who have not moved their perceptions with the new circumstances.

Moe_The_Bartender

Value investing is a concept that harks back to the days when information about companies was less available to the general public than it is now. I'm surprised that many investment managers still stand by it.

Look at M&G Recovery (still on the HL Wealth 50 despite years of fourth quartile performance and failure to achieve its benchmark). It used to be a great fund but Tom Dobell seems to have lost it completely and stubbornly sticks to an outdated strategy. And it's not the only one.

Shares are 'cheap' for a reason and the reason isn't that they are out of fashion.

redux

AnotherJoe wrote: »

p.s. In 6 months there will be an interview with NW where he says if only investors had faith he would not have lost them so much money as the new management.

That's about as much use as saying Nigel Farage would have been a good Prime Minister, if only he'd won some of those 8 failed attempts to become an MP.