Woodford Concerns

dividendhero

EdGasketTheSecond wrote: »

If they are found to have been selling their own holdings in Woodford while at the same time promoting Woodford to PI's, that might not be such a good idea. Could be the next mis-selling scam.

If it's two different departments with a "Chinese wall" between them it's legal.

dividendhero

DennisTenus wrote: »

I have over 30% of my portfolio in Fundsmith, that too much/too risky?

I believe Terry Smith has a lot more skin in the Fundsmith game than that

fun4everyone

Now the FCA are being asked to explain themselves by MP's.

https://www.theguardian.com/money/2019/jun/10/neil-woodford-fund-patient-capital-trust-equity-income

Like all regulation in the UK, the FCA are another scam. Simply there to provide jobs for the boys, collect fees and give everyone the pretence things are looked after.

It will simply end up in yet another "lessons have been learned" statement type of outcome imo. Truth is it was blatantly obvious to anyone paying attention where this fund was headed. Even the name "Woodford Equity Income" was a misrepresentation.

DennisTenus

dividendhero wrote: »

I believe Terry Smith has a lot more skin in the Fundsmith game than that

You mean his own money?

AnotherJoe

MaxiRobriguez wrote: »

That is the game we're going to be playing. Currently trading a 32% discount on previously quoted NAV.

At some point people are going to take the plunge with a small amount of their capital.

At some point people are going to wake up to the fact the NAV is fiction.
A substantial amount is worthless.
The rest is on a spectrum from overvalued to fair to undervalued, but likely highly skewed to over, given the cowboys who've been doing the valuing.

All the non worthless are having their prices depressed due to the firesale.
Based on that, halve the NAV to allow for all the above plus the uncertainty and time factor for the non worthless remaining after the fire sale to rise back to fair value. Which means its still valued more than the "real" NAV and "should" fall to mid 30's.

Prism

DennisTenus wrote: »

You mean his own money?

Yes. For what its worth I have about 50% of my equities with Fundsmith. It doesn't worry me at all

Fatbritabroad

fun4everyone wrote: »

Now the FCA are being asked to explain themselves by MP's.

https://www.theguardian.com/money/2019/jun/10/neil-woodford-fund-patient-capital-trust-equity-income

Like all regulation in the UK, the FCA are another scam. Simply there to provide jobs for the boys, collect fees and give everyone the pretence things are looked after.

It will simply end up in yet another "lessons have been learned" statement type of outcome imo. Truth is it was blatantly obvious to anyone paying attention where this fund was headed. Even the name "Woodford Equity Income" was a misrepresentation.

For me this is the biggest potential issue. I bought Woodford when he set up as I used to hold his funds at invesco and before I had any clue what I was doing when I first started investing (edit I still don't know but at least I now know I have no idea which is why I buy index funds as my core holding and have a couple of punts on some satellites). Yes I should have read the prospectus but there will be alot of people buying this on reputation and because income funds are normally safe vanilla products

fun4everyone

Fatbritabroad wrote: »

For me this is the biggest potential issue. I bought Woodford when he set up as I used to hold his funds at invesco and before I had any clue what I was doing when I first started investing (edit I still don't know but at least I now know I have no idea which is why I buy index funds as my core holding and have a couple of punts on some satellites). Yes I should have read the prospectus but there will be alot of people buying this on reputation and because income funds are normally safe vanilla products

I believe the funds name was fair when the WEIF launched. It's makeup started to change drastically about a year afterwards.

It should also be noticed that there was a small change in the middle of all of this, perhaps brought about by regulators. WEIF was kicked out of the "UK equity income" sector and instead moved into the "UK all companies" sector. Why was the headline name not changed?

dividendhero

Fatbritabroad wrote: »

). Yes I should have read the prospectus but there will be alot of people buying this on reputation and because income funds are normally safe vanilla products

Quite so, when you buy a car you go buy the reputation of the manufacturer and car reviews - unless you're some kind of petrol head or fleet buyer you don't go into the technical spec of the vehicle

cogito

fun4everyone wrote: »

I believe the funds name was fair when the WEIF launched. It's makeup started to change drastically about a year afterwards.

It should also be noticed that there was a small change in the middle of all of this, perhaps brought about by regulators. WEIF was kicked out of the "UK equity income" sector and instead moved into the "UK all companies" sector. Why was the headline name not changed?

Income funds are moved from the Income sector when the yield consistently falls below 4% but don’t have to rename themselves. If you look at the funds in the UK All Companies sector, there are many that include the word 'income'. Basically, That’s because their objective remains to increase income over time but they don't want to be obliged to invest in high yielding shares if they perceive that the companies concerned are not of the right quality.