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Post by Fletchsmile on Sept 21, 2016 16:33:03 GMT 7
I decided to sell WPCT today. Brexit provided a nice opportunity to get in at a price which was a reasonable, as: 1) shares fell generally which I felt was overdone 2) it went from trading at a price which was a double digit premium to net assets, to a discount of around 5% to net assets Price is now back at a premium to net assets, which I'm not keen on. Plus I still have some reservations, and with the way marjets are at the moment felt like taking a bit of risk off the table. Ended up with around 16%-17% profit on it, which was quite nice. I'll keep it on the radar screen though
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Post by mangomoney on Nov 9, 2016 11:44:38 GMT 7
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Post by Fletchsmile on Nov 9, 2016 12:04:40 GMT 7
I continue to keep an eye on WPCT out of interest and because it's Neil Woodford. So far I've been happy with the calls I've made. Didn't get in at the start. Wait and see. Trading at a premium for quite some time so still reluctant to buy. Then an opportunity from Brexit to buy at a discount after i thought was oversold. Then sold at a premium for 16%+ profit A few take aways so far for me: - It's becoming more and more important to distinguish his equity income unit trust from WPCT investment trust. While the former is one of my favourite UK based funds, I'm less and less enthusiastic about WPCT - Interesting example maybe (time will tell more) of how a manager may not be as succesful in a new area. We had reservations before on this thread - Investment trusts are more complex than unit trusts and higher risk. I would rarely get in and out of unit trusts the way I did with WPCT. Weighing the premium and discount factors are important. In this case helping add to profit from the investment over short term, but equally they could have increased potential losses. - Still think he's an excellent fund manager. Just not so convinced about this new venture IT. Still a big fan of his equity income unit trust. Cheers Fletch
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Post by Fletchsmile on Sept 4, 2017 19:52:46 GMT 7
Looking at Woodford's equity income fund he had a poor month in August, with his fund down 4%. Unusual for him, and given most of my other funds were up. Looking a little deeper he had a holding in Provident Financial which tanked over 50% in August. He also holds the same company in his newer Income Focus fund, which aims to deliver 5p per annum income so that suffered too (issue price 100p) Even the best get it wrong sometimes
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AyG
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Post by AyG on Sept 9, 2017 14:48:51 GMT 7
Well, at least he's had the decency to apologise for his poor performance: www.moneyobserver.com/news/07-09-2017/neil-woodford-im-very-sorry-poor-performanceBut this is, of course, just more publicity for his "brand". Crocodile tears. If he were truly remorseful he'd refund the management charges for the period of significant underperformance. But no, it's an asymmetrical risk. Fund rises, and investors and management company get richer; markets fall, and investors get poorer, whilst the management company, quite magically, still rakes in the same percentage fees.
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AyG
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Post by AyG on Sept 14, 2017 13:42:34 GMT 7
Year-to-date Woodford's equity income fund has a total return of 0.59% - the worst in the IA UK Equity Income sector. However, there are quite a few other large (GBP 1+ billion) and well known equity income funds in the bottom decile. Article at: www.trustnet.com/news/757834/its-not-just-woodford--the-giant-equity-funds-in-the-bottom-decile-during-2017From a personal viewpoint, I don't hold any UK equity income funds. (The closest I come to that is Schroder Oriental Income investment trust.) As I've said before, I don't like celebrity fund managers, and I don't like funds that have become so large that the manager's flexibility is limited. I also believe that Woodford is spreading himself too thinly. My prediction is that (despite Woodford's "fame"), his funds will see outflows, and performance will be unexceptional for at least a couple of years. However, on a positive note, I do like the way he's trying to communicate with his investors. It's probably irrational, but I prefer funds which publish monthly updates and explain what the managers are doing and thinking - it helps me feel engaged, and makes me less likely to sell the fund after a prolonged period of poor performance.
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Post by Fletchsmile on Sept 16, 2017 13:48:45 GMT 7
I've stuck with Woodford for over 20 years since he's less well known. That his success has attracted other investors and made him famous doesn't make a sensible reason to jump ship. If someone did this every time a fund manager becomes well known then they'd end up selling and missing out on so many years of outperformance just because other people are now buying them . Successful managers inevitably become better known than they used to. I really doubt the current size of the fund cramps his style. If it did he would soft close like others do. He can still hold 8% in a single stock as he used to. Perhaps in thin and illiquid markets large fund size would make a difference. But we're talking UK equities, a massive market. The total market cap of UK equities on LSE is around GBP 2 trillion, with FTSE 100 being around 80% of that. An under 10bn fund is a drop in the ocean in comparsion. Astra Zenecca, the funds largest holding, alone for example is worth around 60bn as a company. If Woodford has 800mn in Astra Zenecca it doesn't exactly cause big problems. Contrast that with small investment trusts where there often isn't sufficient volume to deal at decent prices. It isn't just size of fund that counts. Also worth remembering that at its peak and under Woodford, Invesco Perpetual Income was bigger than Woodford Income fund is now. That size in no way stopped him being towards the top of performance tables for many years. Since launch just over 3 years ago Woodford Income has returned just under 30% vs a bit over 20% for the sector. It remains 2nd quartile/ above average even after this very poor period. Before that he had been leading the sector for most of the 3 years since the fund launched. His Invesco Perpetual did similar to that for 20 years before him leaving. It also had occasional periods of underperfomance. Will be interesting to see if this changes things and is a pivotal moment when looking back. I doubt it, but only time will tell
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Post by Fletchsmile on Jan 26, 2018 14:42:57 GMT 7
A follow up with Neil WoodfordRichard Troue | Head of Investment Analysis | 9 January 2018 | A A A A follow up with Neil Woodford When a fund manager underperforms, investors are naturally keen to understand why, so they can make a decision whether to stick with the fund. When the fund in question is managed by Neil Woodford, one of the highest-profile fund managers in the UK, the negative press it generates can be blown out of proportion. To put things in perspective, our Head of Research Mark Dampier travelled to Oxford last month to interview Woodford. In this exclusive interview they cover: Why Neil Woodford is more positive than most on the outlook for the UK economy and why he thinks this presents the most exciting opportunity he has seen for a long time. His expectations for the fund’s dividend and what he hopes to achieve over the long term. An update on the fund’s unquoted investments (those not listed on a stock exchange). Mark asks Neil about the risks and opportunities in this important part of the portfolio. contd. www.hl.co.uk/news/articles/a-follow-up-with-neil-woodford
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Post by Fletchsmile on Feb 27, 2019 22:27:15 GMT 7
Woodford vs Barnett and adding Train Have been looking at Neil Woodford's funds recently deciding what to do. In that context: Interesting to look back on this and other threads after a few years.
I'm having difficulty saving .pdfs from Trustnet and even links to graphs, but here's one converted to a jpeg. If anyone has any suggestions on doing that BTW. Could be just my new PC.
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Post by Fletchsmile on Feb 27, 2019 23:25:26 GMT 7
Long story short: Neil Woodford had a great 20+ years. Was one of my favourite funds for that time, and I did nicely out of it. Then he set up Woodford Asset Management and a new fund. In the first year his performance continued, and he was No.1 in the sector and Barnett his replacement no.2. After that though, things have changed dramatically I did a chart using Trustnet and decided to add in Lindsell Train UK equity, which I also hold and know has been one of the top performers consistently, and an indication of where I thought the best should be. Plus looking at the performance tables out of 344 funds using the UK all companies and UK equity income filter to combine the 2 categories. Lindsell Train: - ranks 3rd out of 306 over 5 years - ranks 18th out of 322 over 3 years - ranks 3rd out of 339 over 1 year So that pretty much confirms LT UK as a decent consistent measure over 1,3,5 years of where a consistent top level performer might be www.trustnet.com/fund/price-performance/o/ia-unit-trusts?tab=fundOverview§or=O%253AUKALL%252CO%253AUKEQINC&pageSize=350&sortby=P36m&sortorder=descBased on that, I'll be keeping my LT UK holdings Woodford is a different story. He doesn't yet show a 5 year history, but was 321/322 over 3 years (2nd to last) and 279/339 over 1 year. The last 18m -24m seem to be where the damage is. Looking at the graph in the above post, it seems Barnett (Inveso Income in pink) started fading away pretty much after that 1st year or so, and was pretty mediocre at around 2 years, just above the sector in red and consistently poor after that since and below sector since. Makes you wonder how much was just inherited positions at the start Woodford has been a bit more interesting. Using just before July 2014 as the start (where Trustnet starts its chart): 2 years in (brown line) Woodford was neck and neck with LT UK (in blue), having still been above LT UK for much of the time - so still up with the best. Barnett had lost it. Brexit vote was June 2016. In 4th quater 2016 both LT and Woodford dipped not much before the year end - maybe Nov 2016. But from there things changed. From Nov 2016 LT UK started to pull away from Woodford with more solid gains. Woodford was still above sector and trending upwards, just more parallel to/on a par with the sector. But from July 2017 onwards Woodford and LT really started to diverge. So that's a key point in time. Woodford heading down and LT UK continuing upwards, so really diverging/ heading in opposite directions.
Then 4th quarter 2017 Woodford dropped below the sector. By the end of the chart, and relative to sector, Woodford is a little above Barnett but both still on downtrends but below the sector, and well below LT UK. From July 2017 it looks like jaws with Woodford heading down with negative returns and LT UK up with positive returns So while Barnett has been struggling for a while, Woodford has had a very poor 18m - 24m run since about July 2017 contd. .....
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chiangmai
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Post by chiangmai on Feb 28, 2019 7:01:08 GMT 7
Woodford vs Barnett and adding Train Have been looking at Neil Woodford's funds recently deciding what to do. In that context: Interesting to look back on this and other threads after a few years.
I'm having difficulty saving .pdfs from Trustnet and even links to graphs, but here's one converted to a jpeg. If anyone has any suggestions on doing that BTW. Could be just my new PC.
I was getting "failed network errors" when trying to save PDF's using Chrome, works fine with Firefox....I dunno! Also, if in Portfolio, cannot then access individual fund detail, it creates an !Oopps! screen, that's a T'net issues I think!
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AyG
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Post by AyG on Feb 28, 2019 9:17:58 GMT 7
Rather better than both has been Independent Investment Trust [IIT]. Over 10 years it has returned 487.5% versus Lindsell Train's 425.6%. However, it's been a much more thrilling ride, with the crazy premium to NAV of 20% last year falling to around par now. Attachment Deleted
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Post by Fletchsmile on Feb 28, 2019 11:41:54 GMT 7
Rather better than both has been Independent Investment Trust [IIT]. Over 10 years it has returned 487.5% versus Lindsell Train's 425.6%. However, it's been a much more thrilling ride, with the crazy premium to NAV of 20% last year falling to around par now. It's an interesting holding, and I started having a look at it when you mentioned on another thread, and it has a great headline return. Evaluating it is more complex though, and it's not really an apples to apples comparison if looking at how Neil Woodford compares to Lindsell/Train and Max Ward of IIT.
A key point, given we're looking at comparing fund manager's performance, as I've often said before, it's incorrect to just look at share price of an IT, when evaluating the value of the fund manager's choices and investments. Someone really needs to look at NAV to NAV for the investment trust. This elimnates crazy discounts and distortions, and the whims of the market as to whether the fund is popular or not.
Looking at the 2018 annual report (which shows NAVs for each year) it was trading at a discount of 18.7% in Nov 2008 and a discount of 1.2% in Nov 2018. So that means that around 17.5% of the total return is simply due to the narrowing of the discount, whims of the market etc, not Max Ward's fund picks
If that discount distortion is adjusted for, then the picture changes significantly. It's not just a case of knocking 17.5% off either, and needs to be done along the lines of:
- If NAV 10 years ago was 100. Then share price with a discount of 18.7% would have been 81.3
- If Max Ward's share price grew by 487.5% then 81.3 becomes 477.6 share price
- If the discount is now 1.2% then NAV is around 483.4 { 477.6/(1-0.012) }
- So the NAV performance (NAV-NAV) turned 100 into 477.6 = a gain of +377.6%
So a much fairer 10 year performance to compare the fund managers is the 10 year NAV returns
Lindsell Train NAV grew + 425.6% vs Max Ward's NAV + 377.6%
The implication there being the L/T's fund picks over 10 years outperformed Max Ward's fund picks I suspect the gap is even wider as IIT is actually at a small premium of 1.2% now.
IIT gets a large uplift as the starting point was just after the GFC where discounts widened significantly, as sentiment in the market was highly negative.
Not to mention, the share price tanked from 292 to 117.5 in the 2 years to November 2008 as the starting point. So it had tanked a whopping 60% in 2 years before its excellent share price return. (NAV tanked by "only" 49% BTW )
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Post by Fletchsmile on Feb 28, 2019 12:23:51 GMT 7
Also: Since launch Lindesll Train UK equity has significantly outperformed Independent Investment Trust, up +314% compared to ball park just under 100% for IIT i.e LT more than quadrupled your money compare to IIT doubling it
====================================================================================
I arrived at the above statement as below....
In this context a 12 year return period - give or take is interesting as: 1) It takes into account that IIT tanked badly by 60% in share price or 51% in 2 years prior to the 10 years stats 2) Lindsell Train started up 12 years 7 months ago. (10 July 2006) So looking at these 1A) 12 years From Nov 2006 to Nov 2008 IIT gains are much less stellar Share price went from 292 to 531 = gain of approx 81% NAV went from 282.6 to 537.4 = gain of approx 90% much less impressive Share price 1B) Share price 27/2/19 is 548-562 bid to offer and 548.5 NAV So over the 12 year 3 month period Share price went from 293 to 555 (using mid price) = approx +89% gain NAV to NAV went from 282.6 to 537.4 = approx 90% gain Again much less stellar 2) Interestingly though, Lindsell Train UK equity has returned +314% since it's launch 12 years 7 months ago. Significantly higher than IIT's ball park 90% share price and NAV of Nov 2006 - today Given we're looking at long term performance I'd rather take as long a period as possible. 12 yrs 7 months vs 12 years 3 months isn't coterminous, and that 4-ish months mid-July to end of Nov in 2006 ideally needs adjusting for.
There's already a significant element of adjustment given LT's 12 year 7 month is only +314% compared to +426% for 10 years, but to check this and better understand what happened in the July 2006-Nov2006 gap which doesn't quite match I had a look at the FTSE All share to get a sense of the UK market. (Not easy to find specific data for prices on LT or IIT that far back)
Between 9 July 2006 and 26 Nov 2006 the FTSE all share went up about 7% from 2898 to 3110. Suggests it was not a major factor.
So to be fair IIT would need a bit of an uplift for that gap (July 2006 - Nov 2006) to add to the Nov 2006 to today; to make comparable to LT launch (10 July 2006 to today). Rather than 7% lets say add on about 10%
Ball park, my estimate, sinch launch in 10 July 2017:
LT is up +314% since launch per the screenshot from screen shot from AYG
IIT would be up just under 100% (both share price and NAV)
Conclusion: Since launch Lindesll Train UK equity has significantly outperformed Independent Investment Trust, up +314% compared to just under 100% for IIT i.e LT more than quadrupled your money compare to IIT doubling it
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Post by Fletchsmile on Feb 28, 2019 13:22:03 GMT 7
Rather better than both has been Independent Investment Trust [IIT]. Over 10 years it has returned 487.5% versus Lindsell Train's 425.6%. However, it's been a much more thrilling ride, with the crazy premium to NAV of 20% last year falling to around par now. As I say I'd done some work in looking at IIT from when you mentioned it on another thread. I hadn't compared to LT UK, though which you suggest. Quite an interesting excerise including that.
I'd say the statement above is misleading and distorts a wider picture. Longer term/since LT launched = the longest period available, LT's total return has far exceeded IIT. Over 10 years LT's NAV has also been rather better than IIT's.
A more accurate and a more complete description of longer term performance would therefore be:
The crazy/ wild swings in discount/ premium definitely need considering.
IIT also has other complexities which need further understanding. Not just relating to its IT vs UT/OEIC structure either.
While only a small % of holdings is now global, someone would need to understand the history of that and how it variess.
I had a quick glance at 1 or 2 annual reports in the middle. One listed some quite large USD currency exposures, another holdings in US and Canadian oil and gas stocks I'd never heard of.
The objectives refer to use of futures index to achieve performance
Share buy backs and purchase of its own shares.
Of particular interest in looking further would be that 12-24 month +71.6% increase. That's a massive contribution to performance stats. I'd like to kow what happened there? Can you shed any light on that AYG? Very interesting.
It's definitely an interesting investment as you say.
It does highlight however, how ITs are often better left to more experienced investors.
10 year performance looks great, but it's definitely not something a novice investor should be basing their investing decisions on in isolation. LT as a UT/OEIC is much more suitable for a less experienced investor and not just for understanding. LT is much lower risk, lower volatility, and better returns since launch. For me LT beats Max Ward hands down since launch
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