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Woodford


Great Guy

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Anyone else having a chuckle at Woodford? I used to be on the MSE forum and he used to be talked like he was the Messiah. I always argued he had just been lucky (active fund management is a waste of time IMHO). 

The fees for active fund management are horrendous... 2% a year or something. Anyone remember back in the day the initial fee for a unit trust was something like 5%?

 

"Nervous savers pulled cash out of Neil Woodford's flagship fund as it lost £560 million of its value in just four weeks.

Money in the once-feted Equity Income Fund dropped from £4.33 billion in April to £3.77 billion this week, research firm Morningstar said.

The fund looked after £10.2 billion of investors' cash at its peak in 2017, nearly three times the current amount. Woodford is under mounting pressure to improve performance following a series of high-profile disappointments."

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Frank Hovis

I used to read all the guff but these days fees are the first thing at which I look.

2% over 30 years vs 0.1% is a massive differential for active management to make up year in year out.

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Castlevania

He’s being forced to sell what he can as opposed to what he wants to fund the redemptions. It’s left his portfolio hugely unbalanced. I can see it being closed down.

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Democorruptcy

Due to the Woodford Equity Income being suspended Hargreaves Lansdown have decided to remove it from their Wealth 50 fund list. Not a great advert for HL's selection process then?

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Frank Hovis
1 hour ago, One percent said:

Fund suspended whatever that means.  Is it a Bernie maddoff moment?

https://www.bbc.co.uk/news/business-48506032

 

No, there's no suggestion whatsoever of corruption.  More that he was in fashion and now he isn't.

The suspension is so that he doesn't have to suddenly dump loads of stock at the same time which will mean that the remaining fund holders will lose money.

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Cosmic Apple

Has such a high profile equities focused fund been suspended in this manor before? I recall some CRE funds being suspended in the past but nothing investing in more liquid assets.

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longtomsilver

Not often I am right. Told my sister much the same Frank Hovis. Not qualified to give advice but previously told her to cut losses and run with her winners. 

The tide does eventually go out for these star fund managers and I've always been of the opinion that probability comes in to play with their success... from a sheet of 400 fund managers a few are going to rise to the top year after year that then becomes a self-fulfilling prophecy as new money comes into the fund.

I'm so glad I'm my own fund manager who has happened to out perform every fund manager for six years (although that luck has now run out and I rebalanced on the presumption it would do).

8E9696EB-1E38-4FB3-A643-B4D0BA342A9A.jpeg

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Frank Hovis
53 minutes ago, longtomsilver said:

Not often I am right. Told my sister much the same Frank Hovis. Not qualified to give advice but previously told her to cut losses and run with her winners. 

The tide does eventually go out for these star fund managers and I've always been of the opinion that probability comes in to play with their success... from a sheet of 400 fund managers a few are going to rise to the top year after year that then becomes a self-fulfilling prophecy as new money comes into the fund.

I'm so glad I'm my own fund manager who has happened to out perform every fund manager for six years (although that luck has now run out and I rebalanced on the presumption it would do).

 

I moved most of mine earlier in the year into trackers with low fees.  I have a lot in the HSBC fund. 

Of the three funds below with a £100k holding, none of them charge entry or exit fees that I can see, the HSBC charges annually £80, the Woodford fund charges £500, and the HL Multimanager Asian £1,590.

If I say my average return is 5% or £5,000 before fees then I either get £4,920, £4,500, or £3,410 each year.

Start compounding that differential over a few decades and the fudn manager has to be very good indeed to keep making up that 0.42% or even 1.51% annual charge.

 

HSBC FTSE 250 Index Class S - Accumulation (GBP)

Net ongoing charge:0.08%

Whereas this similar Woodford one (not that he's particularly high) charges:

LF Woodford Equity Income Class Z - Accumulation (GBP)

Net ongoing charge:0.50%

Then there are the HL multi maneger funds where they charge a fee on top of teh manager fees.  here is a pricey one (UK is cheaper):

HL Multi-Manager Asia & Emerging Markets Accumulation (GBP)

Net ongoing charge:1.59%

 

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longtomsilver
1 hour ago, Frank Hovis said:

 

I moved most of mine earlier in the year into trackers with low fees.  I have a lot in the HSBC fund. 

Of the three funds below with a £100k holding, none of them charge entry or exit fees that I can see, the HSBC charges annually £80, the Woodford fund charges £500, and the HL Multimanager Asian £1,590.

If I say my average return is 5% or £5,000 before fees then I either get £4,920, £4,500, or £3,410 each year.

Start compounding that differential over a few decades and the fudn manager has to be very good indeed to keep making up that 0.42% or even 1.51% annual charge.

 

HSBC FTSE 250 Index Class S - Accumulation (GBP)

Net ongoing charge:0.08%

Whereas this similar Woodford one (not that he's particularly high) charges:

LF Woodford Equity Income Class Z - Accumulation (GBP)

Net ongoing charge:0.50%

Then there are the HL multi maneger funds where they charge a fee on top of teh manager fees.  here is a pricey one (UK is cheaper):

HL Multi-Manager Asia & Emerging Markets Accumulation (GBP)

Net ongoing charge:1.59%

 

I came so close to doing the same when the main portfolio touched £173k and the yield on the FTSE 100 was 4% after Vanguards 0.1% cut. The FTSE 250 yielded 3% so I turned my nose up at that one. 

As it happens we've got ~£30k elsewhere in those trackers.

It's only the dividends received that have kept the portfolio >£160k (£164k today). So the HYP as of today yields 4.4%.

F85BE7AD-4B24-4433-99FB-F6BDC2B775E4.png

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Frank Hovis
8 minutes ago, longtomsilver said:

I came so close to doing the same when the main portfolio touched £173k and the yield on the FTSE 100 was 4% after Vanguards 0.1% cut. The FTSE 250 yielded 3% so I turned my nose up at that one. 

As it happens we've got ~£30k elsewhere in those trackers.

It's only the dividends received that have kept the portfolio >£160k (£164k today). So the HYP as of today yields 4.4%.

 

These low fee trackers are the pipe and slippers of equity investments but once I cease work I'm going to be trying to spend all the cash income rather than doing any more investing so those will keep chuntering on in the background, beating inflation, until I have a use for them.  That may be buying my ideal house, though my current one's pretty nice if modest and not worth very much, or it may never get spent in which case my relatives will do very well.

That said I did really enjoy my active share dealing days back in the City when 10%+ returns were not unusual.  That was less my midas touch than the collective wisdom of three or four of us all chatting about shares and paasing on tips.  It worked well in that context because tips could be nuanced and if they failed, as some did, nobody minded.  It would be tempting post-retirement to try similar again with a modest starting pot and see if that sort or word of mouth, or rather word of forum, still works.  I'm not doing it yet as I don't have the time or inclination but if I do it will be on here via a Club because it needs the small numbers and confidentiality for people to give honest opinions so that you don't get some novice reading a tip, seeing it as a one way bet, and losing big time.  As Guitarman did with gold on ToS and bought in with all his savings at $1,900 before it crashed. 

 

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longtomsilver

@Frank Hovis 201p presidential socks and the Last Share You Bought thread have been instrumental in making and sharing a few of my investment decisions. I'll be honest I hardly do any research myself now and consider myself a lazily 'active' passive investor. HOC has been brought to my attention again by @stockton and I'll be buying a few of these. I'd previously bought at 40p and sold out at £2.80 after many hours of due diligence - now condensed down to a few minutes of browsing, sipping coffee and having Blue Planet on in the background :D in a way this is some kind of investment club.

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Frank Hovis
5 minutes ago, longtomsilver said:

@Frank Hovis 201p presidential socks and the Last Share You Bought thread have been instrumental in making and sharing a few of my investment decisions. I'll be honest I hardly do any research myself now and consider myself a lazily 'active' passive investor. HOC has been brought to my attention again by @stockton and I'll be buying a few of these. I'd previously bought at 40p and sold out at £2.80 after many hours of due diligence - now condensed down to a few minutes of browsing, sipping coffee and having Blue Planet on in the background :D in a way this is some kind of investment club.

In which case if I do start then that will be my first port of call and may well serve as the Club.

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Castlevania
1 hour ago, Harley said:

May I ask if software produced that chart and what it was please?

Looks like a screenshot from the income page of his HL account.

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longtomsilver
4 hours ago, Harley said:

May I ask if software produced that chart and what it was please?

What Castlevania said... the income tab within HL online account.

edit. Neil Woodford took £100,000,000 from the fund over 3 years. What I'd like to know is where that's invested? If he's sensible he'd have put that in a passive tracker 😂

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I quite like looking at the London South East website (www.lse.co.uk) when buying shares. You can read what other investors think of different shares.

One funny thing is that the site automatically writes the share price when someone posts... it's funny reading old posts saying "Buy, Buy, Buy" knowing the present share price is lower....

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On 04/06/2019 at 15:26, Frank Hovis said:

These low fee trackers are the pipe and slippers of equity investments but once I cease work I'm going to be trying to spend all the cash income rather than doing any more investing so those will keep chuntering on in the background, beating inflation, until I have a use for them.  That may be buying my ideal house, though my current one's pretty nice if modest and not worth very much, or it may never get spent in which case my relatives will do very well.

That said I did really enjoy my active share dealing days back in the City when 10%+ returns were not unusual.  That was less my midas touch than the collective wisdom of three or four of us all chatting about shares and paasing on tips.  It worked well in that context because tips could be nuanced and if they failed, as some did, nobody minded.  It would be tempting post-retirement to try similar again with a modest starting pot and see if that sort or word of mouth, or rather word of forum, still works.  I'm not doing it yet as I don't have the time or inclination but if I do it will be on here via a Club because it needs the small numbers and confidentiality for people to give honest opinions so that you don't get some novice reading a tip, seeing it as a one way bet, and losing big time.  As Guitarman did with gold on ToS and bought in with all his savings at $1,900 before it crashed. 

 

Don't have to be a novice to lose money as Woodford has just shown, although he did it with other peoples money :-) :-) :-)...wonder if his was the issue you highlight above about a group Midas touch where you can bounce off each other, once he left he didn't have this support.

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2 hours ago, MrXxx said:

Don't have to be a novice to lose money as Woodford.....

I'm quite capable of losing my own money myself thanks without paying for someone else to do it!

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I have been reading some of the comments on Twattter about the Woodford fund. I am shocked by the number of numpties who are "looking for a solicitor" or for compensation because they have their whole savings/pensions with Woodford.

My God, I wonder how some of these people get the money in the first place. I hate the attitude that the state should bail people out, or there should be legal redress for poor financial decisions. If people don't like 20% drawdowns then they should stick their money in "safe" savings accounts and earn 1% a year.

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the gardener
8 minutes ago, billfunk said:

I have been reading some of the comments on Twattter about the Woodford fund. I am shocked by the number of numpties who are "looking for a solicitor" or for compensation because they have their whole savings/pensions with Woodford.

My God, I wonder how some of these people get the money in the first place. I hate the attitude that the state should bail people out, or there should be legal redress for poor financial decisions. If people don't like 20% drawdowns then they should stick their money in "safe" savings accounts and earn 1% a year.

I've got about £5k in that fund which is less than 2% of my/wife's whole pension/ISA portfolio. I went with it as I'd invested in his funds before and did well. No way would I put a large percentage of my portfolio into a single fund. Eggs and baskets.

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The emperor's new clothes, I don't know if he's been up to no good but the media and their obsessive coverage of him needs investigating. Sometimes there were 2 or 3 articles a day posted on This Is Money celebrating this new messiah. A quick look at his portfolio - mostly estate agents?! - was a huge warning sign.

Kent County Council have lost about £100m with him. You have to laugh.

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DoINeedOne

Thats what i thought too @spunko here is the list from his website if anyone else is interested

also owns kier too which this week Shares in Kier plunged 40 per cent on Monday as it warned that profits where shit

1821616703_2019-06-0510_18_53am.thumb.jpeg.50b7a241620ea75de50ed7254e2d5d6b.jpeg142374312_2019-06-0510_19_12am.thumb.jpeg.46deb9c3666e1fb24aea28b1029e238f.jpeg

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