Woodford is the Reason you should no longer Buy and Hold

talexuser

And I've only just read a Trustnet article saying that those managers who churned stock often never beat the buy and hold managers because of costs accumulating and harming profits. Same principle may apply to churning funds often, it is a form of trying to time the market?

The real question is how long do you give a fund once it starts underperforming, and that is not an absolute because of the different reasons for underperformance, is it the manager, the sector, specific stocks, external macro influences etc etc?

For information I dumped Woodford when my gain went from 40% to 30%, looked at some of his holdings for the downward path, and decided that 10% a year was good enough to get out.

Linton

iglad wrote: »

I am looking on my platform watchlist (same on Trustnet) which shows HSBC American 1yr 8.38% and BG A 7.22% so there.

Looking at Trustnet BGA is 5th in the THIRD quartile over 1 year and it's currently at 63 out of 104 funds.

HSBC American is 11th in the 2nd quartile which makes it 47th out of 104 funds.

Is that accurate enough for you?

Like I explained last time BG American was discussed, it is a 50% Midcap/Small Company fund. In the past year the general North American Sector has returned 7% and the North American Smaller Companies sector 2%. So BGA hasnt under performed, it actually has done rather better than a 50/50 split of the relevent sector performances would suggest.


When you look at funds you need to understand what they invest in. Often comparing the performance of two funds even in the same sector is meaningless, they can invest in different things.

Prism

iglad wrote: »

I am looking on my platform watchlist (same on Trustnet) which shows HSBC American 1yr 8.38% and BG A 7.22%.

Looking at Trustnet BGA is 5th in the THIRD quartile over 1 year and it's currently at 63 out of 104 funds.

HSBC American is 11th in the 2nd quartile which makes it 47th out of 104 funds.

Is that accurate enough for you?

You said HSBC American has produced better returns for the year so far. To me that meant calendar year. So maybe not more accurate but clearer

The BG fund has been one of the best to hold over the last 8 months but only average over the last 11. To play this well you needed to somehow drop the BG fund before it fell last October and then re buy 3 months later to pick up the January recovery - almost impossible to do reliably.

My approach is to buy the likely less volatile funds in the first place and not have to change anything during mini downturns. I know you invest in those too btw.

iglad

Linton wrote: »

Like I explained last time BG American was discussed, it is a 50% Midcap/Small Company fund. In the past year the general North American Sector has returned 7% and the North American Smaller Companies sector 2%. So BGA hasnt under performed, it actually has done rather better than a 50/50 split of the relevent sector performances would suggest.


When you look at funds you need to understand what they invest in. Often comparing the performance of two funds even in the same sector is meaningless, they can invest in different things.

I'm comparing a tracker with a fund which has been No.1 ( top10) in it's sector over 3,5, & 10 years now that I find interesting as to why the underperformance in the North American sector. BGA is always shown under US Large Cap Growth Equity and is sold as such, when it clearly isn't from what you have stated.

Linton

iglad wrote: »

I'm comparing a tracker with a fund which has been No.1 ( top10) in it's sector over 3,5, & 10 years now that I find interesting as to why the underperformance in the North American sector. BGA is always shown under US Large Cap Growth Equity and is sold as such, when it clearly isn't from what you have stated.

BGA is in the main North American sector because it has about twice as much large cap than either mid cap or small cap. So it certainly cant go into the Small Cap sector. A minority of funds dont fit neatly into the defined sector boundaries. If all else fails they go into Specialist, but BGA isnt that off piste. When you are considering a fund you should always check what it invests in.



Small Cap funds are generally more volatile than Large Cap ones. This has the effect that although overall Small Cap tends to out perform Large Cap in the long term, when prices fall small cap suffers more. The second half of 2018 was a bad time for all shares globally.

Prism

Linton wrote: »

Like I explained last time BG American was discussed, it is a 50% Midcap/Small Company fund. .

I never understood why Morningstar has a flex cap category for UK, Europe and Japan but not for the US

Thrugelmir

At current levels LLoyds offers a reasonable yield. Far from exciting but out of the mire. Someone saw value in buying your stock. Never forget trades are two sided. Opinions make markets.

iglad

Thrugelmir wrote: »

At current levels LLoyds offers a reasonable yield. Far from exciting but out of the mire. Someone saw value in buying your stock. Never forget trades are two sided. Opinions make markets.

I wish them all the best of luck as they are now below 50p per share, that's a share which will be going nowhere in the next 10 or 20 years.

iglad

Linton wrote: »

BGA is in the main North American sector because it has about twice as much large cap than either mid cap or small cap. So it certainly cant go into the Small Cap sector. A minority of funds dont fit neatly into the defined sector boundaries. If all else fails they go into Specialist, but BGA isnt that off piste. When you are considering a fund you should always check what it invests in.



Small Cap funds are generally more volatile than Large Cap ones. This has the effect that although overall Small Cap tends to out perform Large Cap in the long term, when prices fall small cap suffers more. The second half of 2018 was a bad time for all shares globally.

BGA only invests in 41 funds and 10 of those account for 50% of the portfolio, so can anyone tell me what the other 31 companies they have invested in? I'd be interested to know about these small caps.

Thrugelmir

iglad wrote: »

I wish them all the best of luck as they are now below 50p per share, that's a share which will be going nowhere in the next 10 or 20 years.

What's the current yield?