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EDIN and the Prov Fin Debacle
Windlesham Don
Posted: 22 August 2017 12:52:34(UTC)
#1

Joined: 22/08/2017(UTC)
Posts: 8

Was thanked: 11 time(s) in 5 post(s)
Hello all,

My first posting on this forum!

I'm pretty unhappy to see this morning the capitulation of Provident Financial after the dreadful profit warning. I am also pretty unhappy that the so-called expert fund managers sat back and remained invested in this company while things were obviously going wrong.

We invest in ITs so that these 'expert' fund managers invest and protect our funds. I am holding EDIN, but I am looking to get out once the dust settles as I have lost faith in Mark Barnett and his team.

I hold many ITs (probably 80% of my entire portfolio) and would be interested in anyone's views on an EDIN replacement. I already hold FGT, MRCH, SHRS and LWI to try and give myself a broad range of holdings and investment focus in this sector.

All thoughts welcome,
WD
JohnR
Posted: 24 August 2017 17:36:41(UTC)
#2

Joined: 25/01/2014(UTC)
Posts: 27

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Was thanked: 19 time(s) in 11 post(s)
Isn't the point of holding that many vehicles with a similar focus and presumably being subject to some sort of rebalancing regime, so that events like this have a negligible effect long term overall?

Why has short term volatility become a very bad thing, is it perhaps indicative of a long bull market run and growing investor complacency?

EDIN is now my sole UK focused large cap fund as part of a much larger diversified global income portfolio and the effect of this has been almost imperceptable, I'm not the least bit worried and there's every chance PFG will restore the losses and more in time, if they address the problems.

Barnett's and EDIN's problem imo is the Woodford legacy and how to step away from that, he needs to start forging a little more of a path for himself and stop aping the previous incumbent.
2 users thanked JohnR for this post.
dlp6666 on 25/08/2017(UTC), Diggers on 28/08/2017(UTC)
Chris Howland
Posted: 24 August 2017 19:18:46(UTC)
#3

Joined: 19/08/2017(UTC)
Posts: 14

Thanks: 19 times
Was thanked: 24 time(s) in 9 post(s)
Keep your powder dry! There isn't a great deal wrong with EDIN in my opinion. I did hold this in the past and sold when I consolidated my UK IT holdings on CTY and PLI. With hindsight I wish I'd kept EDIN and ditched PLI...

So far as PFG is concerned, major change badly executed is always going to impact the bottom line, it's just a question of how much. Risks don't get much bigger than the change at Provident - collecting payment from those they have loaned money to is as 'front line' as you can get.

In May the Chief Exec (Mr Crook - yes I know, you couldn't make that up!) said "There is always a risk when you go through a change like this, and it's fair to say, some of our agents who are part-time won't be interested in a full-time role" reassuring IC's Companies Editor Ian Smith that 3000 agents had applied for full-time roles and that they wouldn't be short of boots on the ground. (Ref IC 28th July, p50).

It looks like the boots on the ground were the wrong ones and Mr Crook, who as his name suggests had been less than honest with investors (including Mark Barnett), has gone and the share price crashed yesterday as the market over-reacted.

I agree with JohnR - the bad news at PFG is more of a concern for PFG shareholders. For those with a decent portfolio it is just another minor blip.


3 users thanked Chris Howland for this post.
Mr Helpful on 25/08/2017(UTC), dlp6666 on 25/08/2017(UTC), JohnR on 28/08/2017(UTC)
Elizabeth Stark
Posted: 28 August 2017 10:34:33(UTC)
#4

Joined: 14/08/2013(UTC)
Posts: 1

Further to the discussion on PFG - how are PFG's bonds affected by the latest development? I hold a 7% .bond maturing in 2020 and hoping that it will continue its bi-annual payments.

Thanks

Libby
Law Man
Posted: 28 August 2017 11:51:11(UTC)
#5

Joined: 29/04/2014(UTC)
Posts: 209

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Spread your bets. I hold EDIN and PLI and am content with them. Some Equity Income ITs hold mega caps where the divs are uncertain, and you should compare index trackers such as ISF and UKDV.

So, in addition look at overseas Equity Income ITs: FGT, MYI, etc.

If already you are largely invested, I agree with those who suggest keep 10-15% in cash and wait.
2 users thanked Law Man for this post.
Chris Howland on 28/08/2017(UTC), dlp6666 on 14/09/2017(UTC)
Dabbler2
Posted: 28 September 2017 16:52:12(UTC)
#6

Joined: 13/01/2014(UTC)
Posts: 1

28/09/2017: I wonder why EDIN discount continues to widen(-8.09% today), whereas JEO which held a larger percentage of its money in PFG seems to continue at its normal discount(-4.07%)?
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