Woodford Concerns

Thrugelmir

Interesting to see the effect on HL as a consequence. Serious backers of the Woodford funds. Perhaps not the best company analysts in the marketplace. Like Woodford thought that they were better than they actually are.

londoninvestor

dividendhero wrote: »

HL now have something of a reputational problem and they don't seem to be a doing much about it thus far.

What I haven't seen much in the press so far, but probably will come, is Terry Smith's commentary about how funds get negotiated onto HL's list. If that comes under the spotlight more, it will be reputationally uncomfortable for HL.

redux

londoninvestor wrote: »

What I haven't seen much in the press so far, but probably will come, is Terry Smith's commentary about how funds get negotiated onto HL's list. If that comes under the spotlight more, it will be reputationally uncomfortable for HL.

As I hinted earlier, he's been reported as commenting on such matters more than once in recent years, such as we won't pay to be on HL Wealth 150 , 5 years ago.

londoninvestor

redux wrote: »

As I hinted earlier, he's been reported as commenting on such matters more than once in recent years, such as we won't pay to be on HL Wealth 150 , 5 years ago.

Sure - what I mean is that this hasn't yet been brought up much in the context of the WEI suspension situation. It probably will now...

talexuser

melbury wrote: »

I was thinking about buying some of his Income Fund shares when it was launched, just glad that I didn't.

I'm glad I did - actually just after launch at 99p. He made me 30% in ~3 years - very good for a UK fund. With hindsight (i.e. being able to see into the future) I could have got out at 40% but waited to see if the fall would reverse, looked at the portfolio and views expressed by others and jumped. People seem to forget that brokers took him off their recommend lists already and even advised a switch. HL were out on their own sticking with him till now. If I was still in I'd wait and write it off as an active punt that didn't come off, even if it has to be wound up, which could be likely after all the hype. That's the risk you take and hope your much larger other stuff will compensate with diversification.

poppy10_2

dividendhero wrote: »

Hopefully will be better than this feeble statement from HL today..

https://www.hl.co.uk/news/articles/woodford-our-view

Jebus. Yet again HL try to justify their shilling of Woodford by talking about his long term record. But his outperformance occurred at Invesco when he had a board and management oversight that was able to challenge him and reign in his worst excesses. The only record that matters is his performance since he started his own company and completely changed his investment philosophy, fancying himself as a venture capitalist who is able to identify and nurture early stage biopharma and tech startups, despite him having no real experience or skills in the field, as shown by him getting taken for a mug by failed company after failed company. His record since leaving Invesco in 2014 is one of failure. WEIF has a negative total return (including dividends) over a 1, 3 and five year period. A simple FTSE 350 tracker would have given you a return of 30%, or an all-world tracker nearly 70%.

masonic

dividendhero wrote: »

While what you say is true from a regulatory perspective, the fact remains that HL now have something of a reputational problem and they don't seem to be a doing much about it thus far.

But do they really have a problem? You are viewing this as someone who is probably already sceptical of the HL marketing machine. Naive investors will probably not connect the dots and continue to view the Wealth 50 as a useful and impartial resource.

masonic

Nocto wrote: »

Clearly if you already own units in the Income Fund you now have no choice but to hold, but I'd be interested to hear peoples views on the Income Focus Fund and Patient Capital Trust, especially if you're already invested in them.

Buy, hold or sell?

I own units in the Income Focus Fund (currently 5.5% of my portfolio) and I'm going to continue to hold them.

My thinking is that his investment strategy adds diversification to my portfolio and given time may do quite well (he's done it before!), but if it continues to underperform then it's only a small part or my overall investments so I'm not losing any sleep.

I hold a very small slice of WPCT and am not inclined to sell at present.

masonic

IanManc wrote: »

No, it wasn't "very good for a UK fund".

From launch in June 2014 the total return of the Woodford fund was about 35% over three years, compared with a FTSE all-Share tracker such as L&G which had a total return over the same period of about 25%.

So the Woodford fund had a greater total return than a market tracker of about 3.33% a year, which is not "very good" but is actually only slightly above the total market for the period.

And now the total return over 5 years is zero, compared with a all share tracker's total return over those 5 years of roughly 30% - or 6% a year.

Outperforming the index by over 3% per year is great performance, but only if you are investing in companies that make up the index in a similar proportion as they make up the index. Woodford went off on a complete tangent focusing on smaller companies and those not listed in the index. The outperformance in the early year(s) was coupled with a massive increase in risk, which came back to bite him in later years.

dividendhero

Much mention has been made of Woodford's record at Invesco, while it was good - it was actually his predecessor Martyn Arbib who setup the income and high income funds. He retired with an unblemished record.

As for Woodford, to use a sporting analogy he was like a champion jockey who thought because he could make things go fast he'd make an excellent racing driver :mad:

For example, I've not heard a word on what scientific advisers he's got. I'm assuming none and he's got by on his O levels in the sciences.

As for HL, they seem to have become star struck by Woodford and even now they're not fessing up that they've made a massive mistake:mad: