Woodford Concerns

MK62

You have to bear in mind that while some funds do lose money, for a variety of reasons, what has happened at WEIF is pretty rare......there is currently no reason to think that any other funds on HL's Wealth 50 are about to close, nor any other mainstream UK fund.

PS.....However that doesn't mean anyone should take their eye off the ball....

MaxiRobriguez

Jonbvn wrote: »

If I was a lawyer, I think there are quite good grounds to build a legal case. I guess the FCA might be wary of doing that, since the fund would tank.

Don't be silly. Financiers don't get hit with lawsuits or criminal trials.

Brian65

MK62 wrote: »

..there is currently no reason to think that any other funds on HL's Wealth 50 are about to close

But how do you know that when HL keep quiet about their concerns and keep recommending the fund and taking their cut until they have sold their own HL shares?

cogito

Brian65 wrote: »

But how do you know that when HL keep quiet about their concerns and keep recommending the fund and taking their cut until they have sold their own HL shares?

I think that what you’re missing is that there have been red flags over WEI for three years or so. HL were clearly wrong to continue promoting the fund but as far as I can see there is no cause for alarm about any others. You have to do your own research and not be swayed by marketing hype.

dividendhero

MK62 wrote: »

You have to bear in mind that while some funds do lose money, for a variety of reasons, what has happened at WEIF is pretty rare......there is currently no reason to think that any other funds on HL's Wealth 50 are about to close, nor any other mainstream UK fund.

PS.....However that doesn't mean anyone should take their eye off the ball....

Whole point of "Wealth 50" is that HL have so called experts who do have their eyes on the ball :mad:

Don't forget the people on this forum are interested in finance, hence we have our eye on the ball.

Drp8713

dividendhero wrote: »

Whole point of "Wealth 50" is that HL have so called experts who do have their eyes on the ball :mad:

Don't forget the people on this forum are interested in finance, hence we have our eye on the ball.

Surely people dont just randomly pick one UK Equity Income fund from a list of 50 though?

If they were going to use the Wealth 50 you would pick one from each main sectors at least.

If they had done that, this would be a drop in the ocean as the WEIF would be 10% of your portfolio and even if it takes a 20% haircut you are talking 2% of your investments, which the rest of your portfolio would gain back in a few months.

seacaitch

Brian65 wrote: »

But how do you know that when HL keep quiet about their concerns and keep recommending the fund and taking their cut until they have sold their own HL shares?

If investing in funds of any type, it's crucial to look under the bonnet so as to understand what the fund actually holds. This should be totally obvious but there can be a tendency for some people to regard funds somewhat as black boxes, and this seems to be most common when there is a big brand (whether a personality or an organisation) managing the fund.

It's the assets the fund holds that determine the fund's returns.

It's true that when when investing via a fund you are outsourcing a lot of responsibility to the fund manager but you are also responsible, indeed, ultimately responsible for what you're investing in if operating your own portfolio.

A look under the bonnet of WEI made it very clear that this was an unusual fund running a very unusual portfolio that contained a lot of specific risks compared to other funds with "equity income" in their name.

How many IFAs do you think were allocating their clients' money into WEI? Not that many I would guess.

Perhaps what this episode does highlight is that some HL customers might've been better off paying someone explicitly to run their money for them rather than paying someone to allow them to DIY it themselves without perhaps knowing enough about what they were doing.

seacaitch

dividendhero wrote: »

Whole point of "Wealth 50" is that HL have so called experts who do have their eyes on the ball

No, that's really not the point at all.

It's a marketing tool to grow AUM.

Reaper

seacaitch wrote: »

If investing in funds of any type, it's crucial to look under the bonnet so as to understand what the fund actually holds. This should be totally obvious but there can be a tendency for some people to regard funds somewhat as black boxes, and this seems to be most common when there is a big brand (whether a personality or an organisation) managing the fund.

I'm not sure I agree. The whole point of a fund vs DIY share selection is you don't have to look at individual shares and evaluate their risk. You buy a fund that is rated at your risk profile and investing in the area you are interested in.

When I buy a fund I will look at the aggregate data to make sure I am not over exposed to one area (eg geographical) and other info in the KIID. I'll also have a look at the top 10 investments out of interest but I wouldn't go much further than that. If you constantly look over the fund manager's shoulder there isn't much point in having an active fund manager in the first place.

StellaN

AnotherJoe wrote: »

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All three of those comments can actually be backed up with facts.

1. He bought into a company based on impossible technology from a twice convicted fraudster.
2. In the U.K. equity sector his fund is 91st out of 91 according to no less than HL, and in the area of listed funds he's had several major purchases lose the majority of the investment due to mismanagement which he failed to spot.
3. His company broke the liquidity rules multiple times, used dubious devices to evade the liquidity rules and got himself into a precarious position whereby he was extremely vulnerable to downturns causing a vicious spiral

Agreed, but I just think it is amazing that for 25+ years clients and institutions and other wealth managers such as SJP etc were delighted with NW and forever singing his praises. He then set up his own fund which excelled in the first year but then followed this by totally changing his investment strategy with a disastrous three years. He's then subject to personal insults and called a fool, bad fund manager and completely incompetent by forum members who obviously know a lot better than him. Don't get me wrong I'm not saying he's none of these but its easy to be critical without knowing the full facts and nobody called him these things prior to the past three years...just saying.