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Woodford Equity Income
doug186
Posted: 13 August 2017 14:57:51(UTC)
#41

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The current market reminds me of the late 1990s when people were looking for returns of 30 -40% per annum. I was one of them. However I stuck with Woodford then[ Invesc Perp] and I am doing so now. So my answer to the original question is: keep 20% in Woodford funds..
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Tyrion Lannister on 23/08/2017(UTC)
King Lodos
Posted: 13 August 2017 15:12:03(UTC)
#43

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It's certainly one of those environments in which people have got used to expecting abnormally high returns.

People are buying levered, high conviction funds in sectors that are on very steep valuations, and going 100% equities, because they expect >20% returns to continue.

Long-term, stock market returns are closer to 7%, and even 5% if you go far enough back – and that was under much faster developed world growth .. When markets are becoming exuberant, it can pay to get back to good investment principles like value and asset allocation (which of course will have dragged on returns in recent years)
4 users thanked King Lodos for this post.
Freddy4Skin on 13/08/2017(UTC), Jay Mi on 13/08/2017(UTC), Tim D on 13/08/2017(UTC), Guest on 14/08/2017(UTC)
Freddy4Skin
Posted: 13 August 2017 18:57:37(UTC)
#44

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King Lodos;49795 wrote:
It's certainly one of those environments in which people have got used to expecting abnormally high returns.

People are buying levered, high conviction funds in sectors that are on very steep valuations, and going 100% equities, because they expect >20% returns to continue.

Long-term, stock market returns are closer to 7%, and even 5% if you go far enough back – and that was under much faster developed world growth .. When markets are becoming exuberant, it can pay to get back to good investment principles like value and asset allocation (which of course will have dragged on returns in recent years)


KL, as ever I read your post with interest. This immediately brought to mind James Anderson being interviewed by his ginger grandson from a couple of weeks ago where approx. 2 mins in he states that he is looking to invest in companies whose stock price will rise 40% annually over the next 5 years.
Youtube Link:
SMT
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King Lodos on 13/08/2017(UTC)
King Lodos
Posted: 13 August 2017 20:40:47(UTC)
#45

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Freddy4Skin;49797 wrote:
KL, as ever I read your post with interest. This immediately brought to mind James Anderson being interviewed by his ginger grandson from a couple of weeks ago where approx. 2 mins in he states that he is looking to invest in companies whose stock price will rise 40% annually over the next 5 years.
Youtube Link:
SMT


Well it's certainly ambitious .. Ray Dalio seems to think the economy's right in a sweet spot at the moment, so I think if you're an optimist, the real explosive growth could still be yet to come.

But then it's hard not to envisage that being exactly the thinking that led to the Tech Crash
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Freddy4Skin on 13/08/2017(UTC), Tim D on 14/08/2017(UTC)
Tim D
Posted: 23 August 2017 19:44:52(UTC)
#46

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Ouch.

In mid-April 2015 I placed equal amounts into VVUKEI (Vanguard FTSE UK Equity Income) and CFAAIB (Woodford Equity Income) - with divis set to reinvest - following a big DC-to-SIPP transfer. Woodford's been ahead pretty much from the get go.

Today: Just logged in to check portfolios... and I see Woodford's just (if not today, since the weekend) dropped well behind Vanguard's passive of yieldy UK stuff. Tut tut. A somewhat personal event rather dependent on the start date of course... but feels quite symbolic to me.

(Fortunately the other big investment I made at the same time was a similar amount into VLS80 which has now gotten well ahead of either of the aforementioned UK funds.)

I see this site has a story up, and there's much wailing and gnashing of teeth over at Woodford's place.
Tyrion Lannister
Posted: 23 August 2017 19:56:33(UTC)
#47

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Tim D;50192 wrote:
Ouch.

In mid-April 2015 I placed equal amounts into VVUKEI (Vanguard FTSE UK Equity Income) and CFAAIB (Woodford Equity Income) - with divis set to reinvest - following a big DC-to-SIPP transfer. Woodford's been ahead pretty much from the get go.

Today: Just logged in to check portfolios... and I see Woodford's just (if not today, since the weekend) dropped well behind Vanguard's passive of yieldy UK stuff. Tut tut. A somewhat personal event rather dependent on the start date of course... but feels quite symbolic to me.

(Fortunately the other big investment I made at the same time was a similar amount into VLS80 which has now gotten well ahead of either of the aforementioned UK funds.)

I see this site has a story up.


Woodford's performance has been woeful lately thanks to some spectacular falls in several of his biggest investments. Whether this is down to bad luck or bad judgement, who knows?

I have concluded though that he is out of of his depth with smaller science and tech companies. His track record is too good to ignore though so I'm waiting for Woodford Equity Income to go XD, then I'm switching to his income focus fund, that imo is where his expertise lies.

I've come to the conclusion that WPCT and the shift towards start up technology stocks in his flagship fund are a hobby horse to him where he's still finding his feet.
Betty G
Posted: 23 August 2017 20:44:05(UTC)
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Mr Woodford has lost 326 million pounds of his clients money. That's a record loss by a fund invested in a ftse 100 company. He owned nearly 25% of PFG. It could be construed as bad luck but the more cynical view surely would be overexposure, especially for a mainstream equity income fund. I don't think that many holders of his fund would have ticked the 'adventurous' box before investing.
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Tim D on 23/08/2017(UTC)
DJ61
Posted: 23 August 2017 21:29:12(UTC)
#49

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Exactly, totally agree. All this speel about using my fund as an alternative to an annuity, meanwhile he is investing 5% of his fund with a doorstep lender, seriously!!! Plus another 5% Astra Zeneca Cancer cure, it's just a gamble at the end of the day.!
Tyrion Lannister
Posted: 23 August 2017 21:54:15(UTC)
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DJ61;50203 wrote:
Exactly, totally agree. All this speel about using my fund as an alternative to an annuity, meanwhile he is investing 5% of his fund with a doorstep lender, seriously!!! Plus another 5% Astra Zeneca Cancer cure, it's just a gamble at the end of the day.!


Agree with your comment on PFG but AZN, come on! Calling an investment in a Pharma giant a gamble on a cancer cure is more than a bit OTT.
Tyrion Lannister
Posted: 23 August 2017 22:01:24(UTC)
#42

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doug186;49794 wrote:
The current market reminds me of the late 1990s when people were looking for returns of 30 -40% per annum. I was one of them. However I stuck with Woodford then[ Invesc Perp] and I am doing so now. So my answer to the original question is: keep 20% in Woodford funds..


I agree, but the question is which fund?

I think the only one that is representative of his previous success is his Income Focus Fund, see my post above.

I'm interested in your views on that.
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Tim D on 23/08/2017(UTC)
King Lodos
Posted: 23 August 2017 22:11:15(UTC)
#51

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I think the only time we'll know whether Woodford was right all along, is when we're a few years deep into the next bear market.

He lagged the indexes for years before his biggest success, through the Tech bubble, and received a real drubbing in the media for it.

He's certainly had a run of bad luck – but that is the downside of investing in value .. and it's obviously debatable today whether there's more risk in *that*, or in the record-high valuations of safer assets .. Terry Smith's taken the other side of the argument – and his holdings are much less likely to suffer the same kind of bad luck – but at some point, Fundsmith valuations have to equate to lower than normal returns too


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Jon Snow on 23/08/2017(UTC), Tim D on 23/08/2017(UTC)
Tyrion Lannister
Posted: 23 August 2017 22:33:39(UTC)
#52

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I invest in both Woodford and Fundsmith, as I'm sure many others do, maybe that's just sitting on the fence but I expect to make money from both. :)
Jon Snow
Posted: 24 August 2017 00:13:49(UTC)
#53

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Not one for me, however my daughter is putting a bit away every month and I'm comfortable with that as it's where Neil W cut his teeth.

The "Income" fund is yet to show us a bit of leg, so can't comment.

WPC I can't see the attraction, when you have VCT such as Hargreave Hale 1 and 2 out there. They know how to assess start ups, they have the track record of assessing the leadership mentality and management capability. Or even one of KLs' favourites HVPE.
Tim D
Posted: 07 September 2017 08:20:01(UTC)
#54

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I see Woodford has an interview video up on his site; not watched it yet but seems to be being reported as an apology. Transcript here.
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