Woodford Concerns

Jonah01

Alexland wrote: »

Give serious consideration to going with a low cost passive global index (such as an All World or All Cap) or mixed asset fund using indexes (such as Vanguard LifeStrategy or HSBC Global Strategy) with some bonds in proportion to your volatility tollerance and likely future withdrawal date(s).

Indexing is unsexy and as mentioned in this thread there will always be some funds that outperform in any given period but can you pick them in advance and get out before changes in market cycles cause them to underperform? Be happy knowing a close to market performance is better than most investors will achieve.

Since going mostly passive I sleep well not worrying about performance and my main concern is finding the contributions to shovel into the various investment accounts :-)

Alex

Thank you for your recommenndation.

I am 39 and don't require access to the money (unless something bad happens) until retirement.

I had been looking at lumping it all into a Vanguard Life Strategy so it takes away some of the risk. I am unsure on what percentage of shares I should consider. I am not against taking a risk but just licking my wounds at the moment so may not be ready for anything major at the moment.

Alexland

Jonah01 wrote: »

I am 39 and don't require access to the money (unless something bad happens) until retirement.

I had been looking at lumping it all into a Vanguard Life Strategy so it takes away some of the risk. I am unsure on what percentage of shares I should consider. I am not against taking a risk but just licking my wounds at the moment so may not be ready for anything major at the moment.

Given sluggish growth expectations then you need to take around 60% equity risk to keep up with inflation (after fees) or 80% to get some real meaningful growth above inflation (and fees again). This exposes you to potential market crash events of around 25% and 40% respectively. Some people might say go 100% equities and ride out the crashes of circa 50% but my view is that 80% exposure is a nice place to be in your late 30s given current valuations.

This article is 16 months old now but still good
https://www.vanguardinvestor.co.uk/articles/latest-thoughts/markets-economy/why-investors-prepare-for-lower-returns

I find it easier to be confident in a mostly passive strategy which makes it less likely I would be tempted to sell low. When markets fell during the financial crisis I was happily buying more fund units and more recently during the corrections was increasing my equity exposure before getting back to my target allocation as things recovered. An emotional reaction to sell low can damage your return.

As long as you have a reasonably good investment then the biggest factor in determining the outcome will be your contribution level.

Alex

talexuser

The Telegraph today (behind paywall) discusses the Patient Capital Trust. The manager of BMO Managed Portfolio has held it since launch (obviously at a loss) and has actually topped up since talking to Woodford. He reckoned Oxford Nanopore (DNA kits) will float, Atom bank might be bought out at a premium and Proton Partners (Cancer Treatments) will also float. He also says recent sales had not been at a discount to book value, and Patient Capital is a good investment because Woodford's name is now toxic and undervalued! Still too racy for me though...

Johnnyboy11

Not looking good today for our star fund manager, bad news in the press and a sea of red across his Equity Index holdings. UK property stock, Biopharma and his favourite moneypit Provident Financial all getting hammered. Might even be sub-100 at today's valuation point!

fun4everyone

The final nail in the Woodford coffin for me was when he blamed his investors for the position he's in a few months back, saying we had all made "appallingly bad decisions" taking money out.

https://citywire.co.uk/wealth-manager/news/!!!!ed-off-woodford-slams-mountain-of-fake-information/a1210339

Actually Neil it was you who made appalling decisions with the likes of Northwest Bio and PFG.

IMO he knows the end is near for his funds if he is trashing his customers like that. WEIF is likely to show a negative return over 5 years after today.

itwasntme001

I had a position in the income fund which i sold around the 115 level (locking in a loss of a few thousand pounds). I put in about 20% of these funds into a stock that has doubled in value so have more then recovered from my loss from woodford.


I would not touch any woodford funds with a bargepole anymore. Its way too risky for it to be even called an income fund. Dangerous marketing - i am surprised investors in the fund do not sue those who market this fund.

Alexland

Holly at Boring money spoke at an event for The Telegraph and the most common question from the audience was “Should I sell Woodford or not?”

https://www.boringmoney.co.uk/learn/articles/woodford-faces-the-furies/

Brian65

Woodford is going through an unlucky phase, and has probably had more than his share of criticism because he has offended other fund managers by cutting fees.
Where his funds go from here depends largely on Brexit.
I can only see 2 ways out of the deadlock;
1) Referendum - which we can't have because Remain would win
2) General Election - which we can't have because the Tories would lose
So what now?

dividendhero

Brian65 wrote: »

So what now?

Pity the UK didn't create a "system restore point" in May 2016 - but hey ho doesn't seem to be any way out of the current mess other than emigration.

As for Woodford. I held his fund in the IP days and stuck with him through thick and thin and ended up with a pretty good profit. He was well known for his conviction and he avoided tech stocks circa Y2K, and was proven right. However this time I think he's over stretched himself, early investors were lucky indeed to have backed him but the latecomers sadly not...

cogito

Brian65 wrote: »

Woodford is going through an unlucky phase, and has probably had more than his share of criticism because he has offended other fund managers by cutting fees.
Where his funds go from here depends largely on Brexit.
I can only see 2 ways out of the deadlock;
1) Referendum - which we can't have because Remain would win
2) General Election - which we can't have because the Tories would lose
So what now?

Woodford is being criticised because of his stock selection which has resulted in many of his investors losing money. His charges are about the same as Lindsell Train which has made money for all of its investors. When you factor in Woodford’s dealing costs, he's considerably more than Lindsell Train and about the same as Fundsmith (for example) who both have a clear buy and hold strategy. Woodford changes his mind more often than my wife does.

Brexit has absolutely nothing to do with it.