Woodford anyone?
Discussion
CaptainSlow said:
You diversify to reduce risk..."spreading" risk means you end up with the same amount of risk...just spread...which is incorrect.
Please explain? Investors will want an acceptable risk profile and with the same amount of money in the market, your risk is similar however that profile is made up (assuming your choice is either concentrated in funds of a similar risk, or spread between higher risk and lower risk funds).
Diversifying just means your risk is spread over a wider range of investments, but doesn't necessarily change the risk profile. If you wanted a 'medium risk' portfolio, that could be made up of a large number of 'medium risk' funds, or a number of 'high risk' offset with a number of 'lower risk' funds?
Condi said:
CaptainSlow said:
You diversify to reduce risk..."spreading" risk means you end up with the same amount of risk...just spread...which is incorrect.
Please explain? Investors will want an acceptable risk profile and with the same amount of money in the market, your risk is similar however that profile is made up (assuming your choice is either concentrated in funds of a similar risk, or spread between higher risk and lower risk funds).
Diversifying just means your risk is spread over a wider range of investments, but doesn't necessarily change the risk profile. If you wanted a 'medium risk' portfolio, that could be made up of a large number of 'medium risk' funds, or a number of 'high risk' offset with a number of 'lower risk' funds?
https://www.investopedia.com/investing/importance-...
eta
Primarily look at the unsystematic risk element.
Just to get back on topic, news is out that Woodford is actually having to increase his exposure to Proton Partners International and Evofem Biosciences as part of a previous funding pledge.
Both of these companies are small and hard to trade. His holding in Proton Partners International is now over 45% of the total shares. It floated 3 months ago and since then only 155 of its 93m free float shares have actually been traded.
https://citywire.co.uk/new-model-adviser/news/neil...
Both of these companies are small and hard to trade. His holding in Proton Partners International is now over 45% of the total shares. It floated 3 months ago and since then only 155 of its 93m free float shares have actually been traded.
https://citywire.co.uk/new-model-adviser/news/neil...
westhamtim said:
I’m not really sure what point they are trying to make, you put your money in knowing full well you might lose it. Not nice when it happens but it does.TheRainMaker said:
westhamtim said:
I’m not really sure what point they are trying to make, you put your money in knowing full well you might lose it. Not nice when it happens but it does.
Not thought of a cash ISA then?It is the Daily Mail so they will have worked hard to find this group so as to write a tale of woe.
It’s pretty much a standard story template. ‘I (sad face photo) punted everything on xxxxx (insert appropriate crypto, betting, penny share, wine, gold etc investment) and it’s all xxxxx (insert Tony Blair, Brexit, foreigners, etc) fault.
What is genuinely unusual on this occasion is that the investment is very much out of character and wouldn’t have been on the template list for selection.
Usually when you read this standard story the point that is trying to be made by the DM is to look at these idiots and laugh at them but on this occasion while they’ve clearly been foolish with regards to eggs and baskets and while much of the story is going to be exaggerated for effect you really do have feel sorry as although they’ve been silly you have to consider that the odds of this happening to a blue chip, high grade investment fund that gave the complete image of being a rock solid income generating investment is incredible bad luck.
It’s pretty much a standard story template. ‘I (sad face photo) punted everything on xxxxx (insert appropriate crypto, betting, penny share, wine, gold etc investment) and it’s all xxxxx (insert Tony Blair, Brexit, foreigners, etc) fault.
What is genuinely unusual on this occasion is that the investment is very much out of character and wouldn’t have been on the template list for selection.
Usually when you read this standard story the point that is trying to be made by the DM is to look at these idiots and laugh at them but on this occasion while they’ve clearly been foolish with regards to eggs and baskets and while much of the story is going to be exaggerated for effect you really do have feel sorry as although they’ve been silly you have to consider that the odds of this happening to a blue chip, high grade investment fund that gave the complete image of being a rock solid income generating investment is incredible bad luck.
DonkeyApple said:
although they’ve been silly you have to consider that the odds of this happening to a blue chip, high grade investment fund that gave the complete image of being a rock solid income generating investment is incredible bad luck.
And yet my "over-hyped" alarm sounded and I've never invested with Woodford since he left Invesco. The real issue is who was doing the hyping, and why they were doing it.Spread your risks / diversify / don't put all your eggs in one basket. Whichever way you spell it anyone who punts all their money in one direction is bonkers.
DonkeyApple said:
Although they’ve been silly you have to consider that the odds of this happening to a blue chip, high grade investment fund that gave the complete image of being a rock solid income generating investment is incredible bad luck.
Their fact sheet does indeed read like a very standard UK based all share benchmarked income fund.No real focus on anything unlisted.
Fund objective: "To provide a reasonable level of income together with capital growth. This will be achieved by investing primarily in UK listed companies."
Unlisted high-risk illiquid investments tend not to yield any income too...
Was there much available to investors to read up on the more risky bets??
Although 10 days old, quite a thoughtful article by David Stevenson (FT writer) about the problems of Woodford, open-ended funds and "channeling" https://citywire.co.uk/funds-insider/news/david-st... Reminds us that the discount most ITs trade at is partly an explicit illiquidity discount, which open-ended vehicles avoid until redemptions grow to an uncomfortable level.
millen said:
Although 10 days old, quite a thoughtful article by David Stevenson (FT writer) about the problems of Woodford, open-ended funds and "channeling" https://citywire.co.uk/funds-insider/news/david-st... Reminds us that the discount most ITs trade at is partly an explicit illiquidity discount, which open-ended vehicles avoid until redemptions grow to an uncomfortable level.
Thanks for that. It’s almost as if he waited to see what the PH consensus was before penning his article. 
Jimboka said:
I hung onto Woodford for too long.. sold up at the end of May, a lucky escape perhaps.
Put the money into Fundsmith, it’s gone up almost 4% since then, so looks a good move (famous last words
)
I did the same, albeit a bit sooner than May.Put the money into Fundsmith, it’s gone up almost 4% since then, so looks a good move (famous last words
)I'm in it for the long run (and shouldn't check the funds daily), but Fundsmith is up more than 28% for me.
I saw a report that Woodford's fund was 20% invested in illiquid securities when the fund's regulatory limit was 10%.
I assume that's a passive breach as a result of redemptions being funded by selling the liquid securities but it does suggest the fund should have been suspended earlier than it was.
I assume that's a passive breach as a result of redemptions being funded by selling the liquid securities but it does suggest the fund should have been suspended earlier than it was.
Edited by LeoSayer on Friday 21st June 09:45
https://www.hl.co.uk/news/articles/woodford-equity...
From Hargreaves Lansdown site.
In other news:
Anyone buy into Trainline, plenty dealing this morning,steady climb but now falling back
And IQE, plummetted this morning. Buying opportunity or another place to lose money. (I have enough of those at the moment).
From Hargreaves Lansdown site.
In other news:
Anyone buy into Trainline, plenty dealing this morning,steady climb but now falling back
And IQE, plummetted this morning. Buying opportunity or another place to lose money. (I have enough of those at the moment).
SS2. said:
Jimboka said:
I hung onto Woodford for too long.. sold up at the end of May, a lucky escape perhaps.
Put the money into Fundsmith, it’s gone up almost 4% since then, so looks a good move (famous last words)
I did the same, albeit a bit sooner than May.Put the money into Fundsmith, it’s gone up almost 4% since then, so looks a good move (famous last words
)I'm in it for the long run (and shouldn't check the funds daily), but Fundsmith is up more than 28% for me.
Of course it could well suddenly plummet
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