Woodford anyone?
Discussion
JulianPH said:
The ACD really had no other choice.
The fund has been plummeting for a long time now and is down 25% over the last 6 months.
The vast majority of people were going to take their money out at the first opportunity in any event, so the closure creates a level playing field for all investors and gives time for the decent holdings to recoup and offset the illiquid losses (theoretically, at least).
A mass exodus would likely cause more damage than a controlled foreclosure.
Sad to see, but a resolute warning. If you don't understand why you are invested in something then you shouldn't be invested in it.
There is a difference to investing by picking equities, and putting faith in a previously exceptional fund manager and following the recommendation of the platform. People buy funds to avoid having to pick shares themselves. His investment strategy changed markedly from what he had previously done and been good at without this being made clear. The fund has been plummeting for a long time now and is down 25% over the last 6 months.
The vast majority of people were going to take their money out at the first opportunity in any event, so the closure creates a level playing field for all investors and gives time for the decent holdings to recoup and offset the illiquid losses (theoretically, at least).
A mass exodus would likely cause more damage than a controlled foreclosure.
Sad to see, but a resolute warning. If you don't understand why you are invested in something then you shouldn't be invested in it.
That’s not the fault of investors who put faith in him. I don’t possibly have time to look at a fund managers’ stock picks and check out the underlying financials of those companies. I wouldn’t know how to, that’s why I buy funds from proven performers.
That doesn’t mean I didn’t understand what I was investing in to use your phrase. His strategy changed markedly and HL kept pushing him even when performance was poor. Who’s fault is that?
Edited by jakesmith on Tuesday 15th October 23:19
jakesmith said:
There is a difference to investing by picking equities, and putting faith in a previously exceptional fund manager and following the recommendation of the platform. People buy funds to avoid having to pick shares themselves. His investment strategy changed markedly from what he had previously done and been good at without this being made clear.
That’s not the fault of investors who put faith in him. I don’t possibly have time to look at a fund managers’ stock picks and check out the underlying financials of those companies. I wouldn’t know how to, that’s why I buy funds from proven performers.
That doesn’t mean I didn’t understand what I was investing in to use your phrase. His strategy changed markedly and HL kept pushing him even when performance was poor. Who’s fault is that?
The current KIID says that the fund will invest at least 70% in UK listed companies along with the following disclaimer:That’s not the fault of investors who put faith in him. I don’t possibly have time to look at a fund managers’ stock picks and check out the underlying financials of those companies. I wouldn’t know how to, that’s why I buy funds from proven performers.
That doesn’t mean I didn’t understand what I was investing in to use your phrase. His strategy changed markedly and HL kept pushing him even when performance was poor. Who’s fault is that?
"Smaller and Unlisted Companies: The fund invests in listed smaller companies and private companies not available to be bought or sold on the stock market. Both are often more difficult to buy or sell, sometimes significantly harder, when compared to larger more established companies. Unlisted companies and some smaller companies can also be more difficult to value due to less available information on them and can involve a significant amount of estimation. As a result, smaller and unlisted companies may cause large short term swings (both up and down) in the value of the fund."
What did the KIID say about this at the time you first invested in the fund?
Woodford management team quitting the Patient Capital fund
https://www.londonstockexchange.com/exchange/news/...
https://www.londonstockexchange.com/exchange/news/...
LeoSayer said:
The current KIID says that the fund will invest at least 70% in UK listed companies along with the following disclaimer:
"Smaller and Unlisted Companies: The fund invests in listed smaller companies and private companies not available to be bought or sold on the stock market. Both are often more difficult to buy or sell, sometimes significantly harder, when compared to larger more established companies. Unlisted companies and some smaller companies can also be more difficult to value due to less available information on them and can involve a significant amount of estimation. As a result, smaller and unlisted companies may cause large short term swings (both up and down) in the value of the fund."
What did the KIID say about this at the time you first invested in the fund?
Not that "Smaller and Unlisted Companies: The fund invests in listed smaller companies and private companies not available to be bought or sold on the stock market. Both are often more difficult to buy or sell, sometimes significantly harder, when compared to larger more established companies. Unlisted companies and some smaller companies can also be more difficult to value due to less available information on them and can involve a significant amount of estimation. As a result, smaller and unlisted companies may cause large short term swings (both up and down) in the value of the fund."
What did the KIID say about this at the time you first invested in the fund?
It's just the blame game.
- Woody Woodpecker, "if only we'd been left alone the problems would never have escalated like this".
- Investors, "if only the regulator had stepped in sooner the problems would never have escalated like this".
- Hargreaves Lansdown, "it's nothing to do with us that your problems have escalated like this".
rockin said:
It's just the blame game.
Woodford significantly changed his strategy and moved away from his proven area of strength- Woody Woodpecker, "if only we'd been left alone the problems would never have escalated like this".
- Investors, "if only the regulator had stepped in sooner the problems would never have escalated like this".
- Hargreaves Lansdown, "it's nothing to do with us that your problems have escalated like this".
Many on here spotted it tanking. HL have analysts. They should also have at lease stopped pushing it as a top recommendation
I don’t know what the scope of the regulator is so can’t comment on this but retail products (Which this fund is IMO) are subject to regulation in that you get what is advertised. If you paid a maintenance contract with a plumber to come quarterly and check everything and make repairs, and without telling you he switched to electrics and f
ked up all your wiring in your house you wouldn’t say caveat emptor. FredClogs said:
I don't think it really was communicated, HL boss has said as much and made clear his opinion of Woodford. Tbh had someone at Kent Council not done some due diligence and decided to ask for their £250million back we'd all be still in the dark.
Just interested in whether Woodford actually changed the written strategy or shifted the portfolio to the extreme boundaries of what was already written.Sad end.
Woodford was an exceptional fund manager who made both my clients and myself a lot of money. His true expertise, as careful attribution analysis clearly shows, was always in large and mid cap UK listed equity. His track record in small and unlisted stock never stacked up. For these reasons we sold a couple of years back, while institutional investors in the main limited Woodford to investing their funds in areas where he had a track record of adding significant value.
As for retail investors, poor returns alone are never compensated. If however, you were advised to invest in the fund by an adviser, then check your original documentation to ensure this fund was suitable at point of recommendation. If you have been paying for ongoing advice, you should have been told the fund remained ok for your objectives, perhaps as part of s wider portfolio of funds, or been advised to sell.
If you’ve been paying for ongoing advice, but heard nothing from you adviser for years, I suspect you will have a valid complaint and possibly be in line for some compensation.
Woodford was an exceptional fund manager who made both my clients and myself a lot of money. His true expertise, as careful attribution analysis clearly shows, was always in large and mid cap UK listed equity. His track record in small and unlisted stock never stacked up. For these reasons we sold a couple of years back, while institutional investors in the main limited Woodford to investing their funds in areas where he had a track record of adding significant value.
As for retail investors, poor returns alone are never compensated. If however, you were advised to invest in the fund by an adviser, then check your original documentation to ensure this fund was suitable at point of recommendation. If you have been paying for ongoing advice, you should have been told the fund remained ok for your objectives, perhaps as part of s wider portfolio of funds, or been advised to sell.
If you’ve been paying for ongoing advice, but heard nothing from you adviser for years, I suspect you will have a valid complaint and possibly be in line for some compensation.
JulianPH said:
If you don't understand why you are invested in something then you shouldn't be invested in it.
This is very true.Although I thought I knew something about CAKE, but it didn't help me with Pat Val!!!
It sounds big-headed now, but I got out of Woodford when I realised it wasn't holding investments that I thought it had been set up for - i.e. increasing illiquid holdings, and then having to somehow turn those illiquid holdings into quoted stocks. That might have seemed right for certain funds in certain markets and in certain situations, but seemed alien to what a "regular" Woodford Investor might stomach.
Now I might know a thing or two about financial services generally, I don't believe I know everything but when I didn't understand what was going on, I decided it was time for something else......
....and it was not a surprise if there investors that got the same vibe and decided enough was enough too.
Ignoring all the wise ones that now declare they pulled out early I would suggest that an ambulance chasing lawyer will be appearing soon somewhere. HL never advised per se to invest but their letters at the time hinted so strongly at doing just that.
Whilst the FCA to date has been seemingly impotent or reluctant to say anything I would guess that might also change.
The fact that all the way through this sorry tale has Woodford still been taking fees will also not be ignored I hope.
Whilst the FCA to date has been seemingly impotent or reluctant to say anything I would guess that might also change.
The fact that all the way through this sorry tale has Woodford still been taking fees will also not be ignored I hope.
To quote HL:
Neil Woodford is one of the most successful and well-known fund managers in the UK, with a career spanning over 30 years.
His flagship CF Woodford Equity Income Fund has just reached its third anniversary. In my in-depth report I take a look at how it has fared and explain why we believe it remains an excellent choice for investors seeking income, growth or a combination of the two.
Neil Woodford is one of the most successful and well-known fund managers in the UK, with a career spanning over 30 years.
His flagship CF Woodford Equity Income Fund has just reached its third anniversary. In my in-depth report I take a look at how it has fared and explain why we believe it remains an excellent choice for investors seeking income, growth or a combination of the two.
Helicopter123 said:
Sad end.
Woodford was an exceptional fund manager who made both my clients and myself a lot of money. His true expertise, as careful attribution analysis clearly shows, was always in large and mid cap UK listed equity. His track record in small and unlisted stock never stacked up. For these reasons we sold a couple of years back, while institutional investors in the main limited Woodford to investing their funds in areas where he had a track record of adding significant value.
As for retail investors, poor returns alone are never compensated. If however, you were advised to invest in the fund by an adviser, then check your original documentation to ensure this fund was suitable at point of recommendation. If you have been paying for ongoing advice, you should have been told the fund remained ok for your objectives, perhaps as part of s wider portfolio of funds, or been advised to sell.
If you’ve been paying for ongoing advice, but heard nothing from you adviser for years, I suspect you will have a valid complaint and possibly be in line for some compensation.
I wouldn't even contemplate considering compensation appropriate for poor returns - that is my riskWoodford was an exceptional fund manager who made both my clients and myself a lot of money. His true expertise, as careful attribution analysis clearly shows, was always in large and mid cap UK listed equity. His track record in small and unlisted stock never stacked up. For these reasons we sold a couple of years back, while institutional investors in the main limited Woodford to investing their funds in areas where he had a track record of adding significant value.
As for retail investors, poor returns alone are never compensated. If however, you were advised to invest in the fund by an adviser, then check your original documentation to ensure this fund was suitable at point of recommendation. If you have been paying for ongoing advice, you should have been told the fund remained ok for your objectives, perhaps as part of s wider portfolio of funds, or been advised to sell.
If you’ve been paying for ongoing advice, but heard nothing from you adviser for years, I suspect you will have a valid complaint and possibly be in line for some compensation.
I think HL have acted disgracefully in continuing to promoting it without making clear the shift in strategy, or updateing retail investors about this in the ton of bumph they send me all the time
Think Woodford was pretty clear most of the time and no strategy change for WEIF. Full list of holdings in July 2014 shows its not a normal UK income fund (launched a month or so before).
https://www.telegraph.co.uk/finance/personalfinanc...
Fund priced on underlying assets so no hype in early rises and was up 35-40% after 3 years or so.
Risks always there, performance flattened off (and was well beaten by global equity funds that HL ignored even in early years).
Pharma startups no longer giving big gains of 5 years ago and over reliance on stocks hit by Brexit continuing uncertainty and the exodus gaining momentum concentrates the % of unlisted and hard to sell stocks. This plus 4 or 5 big UK companies going wrong in recent years.
Was never an invest and forget about core investment as always had loads more risk than most UK EI funds. Don't think HL concentrated on the change from Invesco Perpetual Income though and kept in Wealth? Recommended lists far too long.
Does raise concerns on big funds though - as hard to gains when so much money to invest ( as have to invest in the known big companies most of time) and also a bit of domino effect on those when investors cash out of Open Ended funds.
https://www.telegraph.co.uk/finance/personalfinanc...
Fund priced on underlying assets so no hype in early rises and was up 35-40% after 3 years or so.
Risks always there, performance flattened off (and was well beaten by global equity funds that HL ignored even in early years).
Pharma startups no longer giving big gains of 5 years ago and over reliance on stocks hit by Brexit continuing uncertainty and the exodus gaining momentum concentrates the % of unlisted and hard to sell stocks. This plus 4 or 5 big UK companies going wrong in recent years.
Was never an invest and forget about core investment as always had loads more risk than most UK EI funds. Don't think HL concentrated on the change from Invesco Perpetual Income though and kept in Wealth? Recommended lists far too long.
Does raise concerns on big funds though - as hard to gains when so much money to invest ( as have to invest in the known big companies most of time) and also a bit of domino effect on those when investors cash out of Open Ended funds.
jakesmith said:
I wouldn't even contemplate considering compensation appropriate for poor returns - that is my risk
I think HL have acted disgracefully in continuing to promoting it without making clear the shift in strategy, or updateing retail investors about this in the ton of bumph they send me all the time
I don't believe there is any talk of compensation for poor returns, but there may be potential to claim if you were advised to invest in Woodford and it's determined you were advised incorrectly.I think HL have acted disgracefully in continuing to promoting it without making clear the shift in strategy, or updateing retail investors about this in the ton of bumph they send me all the time
I'm a novice investor but I know that if I want dependable equity income I wouldn't go and pile into unlisted cold fusion startups.
That's more the issue than compensation because an investment has gone down.
I find it interesting simply as it may highlight if your 1% for an IFA helps in this sort of situation.
Goes to show doesn’t it. I find myself wondering how people get conned into paying for uneccesary home repairs or booking a holiday with Thomas cook then getting stuck somewhere. What fools! But I had £20k in Woodfords fund! Luckily it’s not a major part of my SIPP and I have a long time to recover as won’t be retiring any time soon
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