Does Woodford's failure have implications for other widely owned funds?

bostonerimus

noclaf wrote: »

How does one then diversify their tracker/funds purely based on hedging for one investment going kaput due to a Woodford style scenario?
For example I only invest in VLS 100 but if I wanted to add a second fund purely to 'not have my eggs in one basket' do I then open with BlackRock, Fidelity or a HSBC product for example to use a bank rather than a asset manager/Hedge fund. I don't think you can ever be fully protected but aside from diversification at a investment level ( small caps, FTSE 100, Commodities, Emerging Markets etc) does anyone here also think abt spreading risk across different types of firms?

You are well diversified in something like VLS100 or any of the large global balanced funds whether active of passive from the likes of HSBC etc.

These are very different from Woodford who was too concentrated in unlisted funds and took on way too much risk. Funds like Fundsmith and Linsdell Train Equity are somewhere between the big balanced funds and Woodford. They are highly focused having only 30ish holdings and rely on the algorithms and philosophy of a manager, so anyone owing such funds should know the basic criteria they use to chose and value their holdings. This will also allow them to hold some other complimentary funds.

The lesson people might take from Woodford is indeed not to concentrate you eggs in a single basket and Woodford, Fundsmith and Lindsell Train are all single baskets. Something like VLS100 is a handful of baskets and VLS60 is a whole load of baskets.

noclaf

Thanks bowlhead99 and bostonerimus... excellent informative posts as always!

Bowlhead99 I should probably add my 'investments' are very low-key right now...circa £3k in a VLS100 via Vanguards platform and that's it..rest is all cash and again fairly modest. So with the VLS100 I guess am reasonably diversified but if I ever add another find or tracker may use a diff provider
I tend not to mess about with my work pension even though we are given the freedom to tweak it if we so wish. In a slight twist of irony I am currently downsizing from 5 to 2 current accounts as I can't be bothered to faff about with multiple accounts and dd's esp with paltry interest rates.

C_Mababejive

What about SMT?

AnotherJoe

SMT is a technology fund. If you want a tech fund its one of the best.

bostonerimus

noclaf wrote: »

Thanks bowlhead99 and bostonerimus... excellent informative posts as always!

Bowlhead99 I should probably add my 'investments' are very low-key right now...circa £3k in a VLS100 via Vanguards platform and that's it..rest is all cash and again fairly modest. So with the VLS100 I guess am reasonably diversified but if I ever add another find or tracker may use a diff provider

If you want something that Vanguard can't provide right now then look at another platform, but I wouldn't worry about a different provider for reasons of diversification or for any worries about failures.

I tend not to mess about with my work pension even though we are given the freedom to tweak it if we so wish. In a slight twist of irony I am currently downsizing from 5 to 2 current accounts as I can't be bothered to faff about with multiple accounts and dd's esp with paltry interest rates.

I would at least understand your pension investments as they have to be considered along with all your other finances so that you have a holistically sensible setup.

C_Mababejive

AnotherJoe wrote: »

SMT is a technology fund. If you want a tech fund its one of the best.

True,,it has dipped somewhat lately and i think i read that in recent years it has invested in unlisted startups more and more ?I guess with high risks come high returns hopefully. I chopped my level of exposure to SMT a few months back

AnotherJoe

noclaf wrote: »

Thanks bowlhead99 and bostonerimus... excellent informative posts as always!

Bowlhead99 I should probably add my 'investments' are very low-key right now...circa £3k in a VLS100 via Vanguards platform and that's it..rest is all cash and again fairly modest. So with the VLS100 I guess am reasonably diversified but if I ever add another find or tracker may use a diff provider
I tend not to mess about with my work pension even though we are given the freedom to tweak it if we so wish..

You really should. As an outrageous generalization many companies default pension funds are too safe, or ironically too unsafe, being over-invested in the UK and by implication in a handful of industries and companies.