Woodford Concerns

ColdIron

Yes. Class C, Sterling = GBP and ACC = Accumulation

talexuser

bowlhead99 wrote: »

If inception was 100p and the Acc class is going to make a series of capital payments during the liquidation with the first of those payments being 58.99p, it doesn't seem like you are looking at an overall loss of 50% from inception.

The Borisgraph Business main story today is putting the maximum negative spin on this possible.

They say investors in C class through AJ Bell could lose 62%. Hargreaves Z class people lose 58% buying at peak. And initial investors lose 50% now, no mention of further payments. Average ACC people lose 48%, average INC people lose 57% - no mention of the dividends they have got in the meantime.

Good to see they aren't panicking investors who feel sore about the losses. :mad:

Malkytheheed

Midas wrote: »

but, £50k all in one fund.. what were you thinking :eek:

I know people with Millions in ONE COMPANY let alone one fund. Really depends what you are worth and how many assest you have. 50k is a lot to many but nothing to others.

bowlhead99

talexuser wrote: »

The Borisgraph Business main story today is putting the maximum negative spin on this possible.

They say investors in C class through AJ Bell could lose 62%. Hargreaves Z class people lose 58% buying at peak.

To a casual observer this might imply that AJ Bell was a more expensive place to buy and reinforce the apparent benefit of using the discounted share class offered by HL on some funds.

Though really the 0.1% additional annual management fee would have been offset by a platform fee that was 0.2% lower in the AJ Bell investors' favour.. The 4% difference between the classes is not really anything to do with the fee structure, but more to do with the fact that they are assuming that the 3-4p of dividends received by the C Income investors at AJ Bell since the fund was at its peak, was simply thrown in the bin by the investor on receipt.

And initial investors lose 50% now, no mention of further payments.

Yes, aside from the impressions given about income investors making bigger losses than accumulation investors (when really the opposite is true because income investors taking the money to invest or spend elsewhere will have avoided letting their money compound up in an ultimately failing fund); it's somewhat disingenuous to present a statement that someone investing in June 2014 could see an 'initial loss' of around 50pc.

The phrasing of 'initial loss' since inception of 50% may imply to fearful people that there could be further losses to follow as the fund winds up. However, if you've calculated that initial loss from your entire cost less your interim distribution, you can't possibly lose any more money than that. You will either get extra cash back as planned, reducing the loss, or you won't, maintaining the loss.

Good to see they aren't panicking investors who feel sore about the losses. :mad:

It's certainly more impactful if they make it sound more dramatic - at least they didn't follow the BBC's approach and stick a photo of an OAP with sadface as their lead image. :shocked:

eye_to_eye

Malkytheheed wrote: »

I know people with Millions in ONE COMPANY let alone one fund. Really depends what you are worth and how many assest you have. 50k is a lot to many but nothing to others.

Won't somebody please think of the billionaires.

iglad

ChesterDog wrote: »

Jim, I'm surprised to see you getting caught out. I've always felt you and I are very much on the same wavelength.

I invested in the Woodford OEIC initially (as did a friend to whom I suggested it), but as time passed, I became concerned enough to pull out well before the crisis hit. I twisted my friend's arm to do likewise even though - as he pointed out at the time - I had always told him investment is for the long term and you shouldn't chop and change. But this was a special case...

The fund got chucked out of the Equity Income sector - bad sign.

There was a high level of small, unlisted, high-risk companies in it, and the proportion of these grew and grew - bad sign.

Increasingly, the holdings didn't reflect his previous successful funds - bad sign.

There were big problems with individual holdings within it (Capita, Provident, Industrial Heat...) - bad sign.

The performance, initially good, fell away - bad sign.

Woodford started to rule-bend and wriggle the regs (Guernsey listings) - bad sign.

Withdrawals from the fund sucked further value from it - bad sign.

Woodford - the high-hubris, high-conviction, dedicatedly contrarian investor - found himself issuing contrite apologies to his investors, while also blaming them for the poor performance by pulling their money out - bad sign.

Etc, etc, etc.

So I am curious: what made you hang on?

I think he stuck by the 'it's a 'long term investment' and 'things will get better' mantra. I believe in the first one but the 2nd one nah as I don't invest or stay in loss making funds.

Many people who should know better stuck around far too long and got burnt.

Also what has happened to the OP who put £50k into Woodford is he still with us?

Brian65

littlecub wrote: »

I just feel so so guilty for being stupid,

Investing in Woodford fund was not unreasonable based on the information available at the time - The fund was not a scam and investing in it Certainly wasn't stupid. Look at all the others who invested - they are not all daft.
Spare a thought for the many who have been taken in by Scams and lost the lot. Then taken in by recovery fee fraud and scammed again. Its a lot worse for them than it is for you.

Sailtheworld

SonOf wrote: »

We don't know your portfolio. If you built your portfolio correctly then it shouldn't really be any more than 20-25% of your overall portfolio. So, the loss relative to your portfolio shouldn't be much more than a minor setback. Indeed, the rest of your portfolio could well have more than made up for it. It's a setback but it shouldn't be a large one costing you years.

Cold comfort when it's pretty clear he didn't build his portfolio correctly and it is a large setback costing him years.

He bought into the idea (promoted by the financial sales industry) that he had the skills to pick a star manager ahead of time or, for just a 'small' fee, they would tell him. Mix in a touch of greed and gullibility and all sense went out of the window.

Lots of disciples on this board are all too happy to comment on 'flavour of the month' this and 'top of the league table' that and perpetuate the myth. I can see why - nobody likes to attribute one iota of investing success to luck and, of course, diversification is so so unsexy.

eskbanker

Sailtheworld said:

SonOf wrote: »

We don't know your portfolio. If you built your portfolio correctly then it shouldn't really be any more than 20-25% of your overall portfolio. So, the loss relative to your portfolio shouldn't be much more than a minor setback. Indeed, the rest of your portfolio could well have more than made up for it. It's a setback but it shouldn't be a large one costing you years.

Cold comfort when it's pretty clear he didn't build his portfolio correctly and it is a large setback costing him years.

He bought into the idea (promoted by the financial sales industry) that he had the skills to pick a star manager ahead of time or, for just a 'small' fee, they would tell him. Mix in a touch of greed and gullibility and all sense went out of the window.

Lots of disciples on this board are all too happy to comment on 'flavour of the month' this and 'top of the league table' that and perpetuate the myth. I can see why - nobody likes to attribute one iota of investing success to luck and, of course, diversification is so so unsexy.

Not sure what you're referring to but where exactly does the industry promote the idea that star managers can either be picked readily by DIY investors or even identified by qualified advisers?
Likewise, practically all posts I've read on here by anyone with any sort of credibility (i.e. based on quality not quantity of posts) reiterate the importance of portfolio diversification - where do you believe you've read otherwise?

bowlhead99

eskbanker said:

Sailtheworld said:

Lots of disciples on this board are all too happy to comment on 'flavour of the month' this and 'top of the league table' that and perpetuate the myth. I can see why - nobody likes to attribute one iota of investing success to luck and, of course, diversification is so so unsexy.

Not sure what you're referring to but where exactly does the industry promote the idea that star managers can either be picked readily by DIY investors or even identified by qualified advisers?
Likewise, practically all posts I've read on here by anyone with any sort of credibility (i.e. based on quality not quantity of posts) reiterate the importance of portfolio diversification - where do you believe you've read otherwise?

I would agree with that reply (as someone who hopefully meets the criteria of some sort of credibility based on history, albeit it is a brave New World now the forum software has changed and the 'thanked in x number of posts out of y total posts' has been lost' )

It is certainly true that people on this on this board are all too happy to comment on 'flavour of the month' this and 'top of the league table'  that. But when you see the nature of those comments, they are invariably to say DO NOT base your investment decisions on what is flavour of the month or top of a five year chart.

There are some posters who are vocal about their view that you should not hold 'failing' funds that are not making as good a return as other leading funds seen on recent charts; that they are frustrated or worried by seeing red in their portfolio so will set a mental stop loss and abandon the fund if it doesn't do as well as other things they are hearing about. It would not be very classy of me to name names. 

But those posters are generally criticised by the community, because it is well known that funds can't be top performers at all times; that diversified portfolio construction requires us to hold assets that are uncorrelated not just the most recent high fliers; it is generally not great to pile on to something that's just gone up the most; fund sector boundaries allow funds with different risk levels to be lumped together in league tables and relative performance can change over an economic cycle; etc etc.