For 2008:

FTSE tanked -31% that year
FTSE250 tanked -40% that year

Invesco Perpetual income fund for 2008. It was down -19.9% that year, so significantly better than the UK indices in that downturn. That was the worst year I could find for it since 1999.

For Woodford what often gets overlooked is he can be position himself cautiously and defensively when he thinks time is right. One of his trademarks is suffering less than peers in downturns.

Here's the performance of Ecclesiastical Higher Income A (label A) in 2008. For comparison I've included Woodford's Invesco Perpetual Income (label B) and the FTSE 100 (label C).

Attachment Deleted

As you can see, the Ecclesiastical fund fell less than Woodford's.

The 4th quartile doesn't bother me. It simply reflects the defensive nature of the fund. It's going to underperform in rising markets, but should help preserve your capital in falling ones. In 2014 it made 5.7%, and in 2013 10.1%. I'm not greedy. That's enough for me.  The 10 year annualised performance is 8.6%, which to me seems reasonable.

Just like the passive v. active debate, the open ended v. closed decision isn't clear cut.

(Actually, sometimes it is. I'm not going to pay a 23.4% premium to NAV to access Lindsell/Train's expertise via their investment trust. If I wanted to put my money with them I'd definitely go the open ended route. The premium is just madness. Not sure I'd pay a 10.2% premium for Woodford's investment trust, either.)

Anyway, a few points:

(1) Many investment trusts have now started to manage their discount/premium by buying up shares, or issuing new ones. This takes away the problem of widening discounts.

(2) If a trust is bought at a discount you're effectively getting more dividend income that if you bought an equivalent unit trust, which is nice.

(3) It does appear that more investment trusts are trading at a premium than in the past. Not sure if this is a result of the Retail Distribution Review or not. Some have obviously had their prices driven up by the search for yield (particularly in the infrastructure and property sectors). These I'd be wary of: I don't think the premium is sustainable.

(4) Investment trusts are pretty much always sellable. You don't get the problems such as there were with property funds a few years back where investors couldn't exit. Similar problems have afflicted those who invested in the Arch Cru range who have waited years to get a fraction of their money back.

(5) By not having to deal with redemptions, investment trusts can hold less cash than funds, cash being a drag on performance. They also don't have the forced sales which are incurred when there's a run on a fund, for example, if the fund manager leaves. Theoretically (and often in practice) an investment trust will perform better than an equivalent unit trust.

(6) I'm not so bothered by discounts widening. If a discount goes from 5% to 10% and I'm holding the investment trust for 10 years, then I'm only losing 0.5% a year. And some investment trusts I've held for more than 30 years. Of course, it's more of an issue if you're likely to be a forced seller at some point in the future.

(7) I don't particularly like the bid/offer spread on investment trusts, and really don't like paying the 0.5% tax on purchases.

(8) Many investment trusts don't communicate particularly well with their holders. Fund managers tend to do a better job with monthly fact sheets and the like.

(9) Investment trusts pay their managers less than funds. Does that mean that funds will attract better quality managers than trusts?

(10) Investment trusts have to reveal how much the managers and directors have invested in the trust. There's no similar mandatory disclosure for funds. I feel more comfortable when the manager has skin in the game.

For mixed funds rather than 100% equity, as mentioned I hold Invesco Perpetual Distribution for my mum, but had also looked at AXA Managed Balanced and Ecclesiastical Higher Income as realistic alternatives to change to for her, about a year back when Woodford left, and just now done a quick update. (I'd also dismissed a lot of others, and these were 3 I narrowed it down to). All 3 might be worth a look by rgs or anyone else if considering mixed funds: 

Below is the performance graphs:

Attachment Deleted

Yellow = mixed fund 20% to 65% sector - would be expected lowest returns, with lowest equity weightings
Blue = mixed 40% to 85% sector - would be expected to be higher than yellow given the higher equity weightings

Green = Invesco Perpetual Distribution
Orange = Ecclesiastical
Brown = AXA

Some key take-aways:

- It's clear all 3 have continued to beat their peers in the mixed fund sector, so all 3 worth considering
- For a lower proportion of equities, however, Invesco Perpetual was holding its own until a year or so back. With a higher proportion equity funds I would expect to generally have a higher return on AXA and Ecclesiatical in equity bull markets.
- Invesco Perpetual Distribution was beating its sector by more relatively (vs yellow) than Ecclesiastical and AXA (vs blue) over the last 5 years. So I liked the Invesco fund and was a clear cut addition to a conservative portfolio, until a year back when Woodford left, and I was less sure
But
- In the last year, Invesco underperformed its sector, as well as dipped vs the other 2 funds. Of 4 previous discrete calendar years it had outperformed. I really don't know exactly why that is, and it's too short to judge. It's possible it coincides with Woodford's departure, and definitely validates my decision to put on watch and monitor. But could also be down to the higher weighting in bonds it has to hold.

Below are the stats for discrete and cumulative years for these 3 funds plus their 2 sectors

Discrete calendar year performance

Investment                                                         19/06/10 -  19/06/11 19/06/11 - 19/06/12 19/06/12 - 19/06/13 19/06/13 - 19/06/14 19/06/14 -19/06/15


UT Mixed Investment 40%-85% Shares                    8.67%                  -1.94%                      15.61%                  6.67%                      6.89%

Ecclesiastical Higher Income B                                 12.84%                 1.2%                        17.08%                   10.85%                    4.03%

AXA Framlington Managed Balanced R Acc                12.99%                  0.59%                      18.54%                  8.23%                      6.3%


UT Mixed Investment 20%-60% Shares                     7.1%                 -0.09%                       11.69%                     5.72%                     5.08%

Invesco Perpetual Distribution Acc                             10.26%             2.52%                         20.37%                     8.12                        2%



Cumulative performance

Investment                                                                 3 months         6 months         1 year         3 years         5 years

UT Mixed Investment 40%-85% Shares                       -1.77%             4.98%             6.89%         31.82%         40.47% 

Ecclesiastical Higher Income B                                -0.89%              4.22%              4.03%        35.01%         54.16%

AXA Framlington Managed Balanced R Acc               -1.54%             4.73%             6.3%             36.38%        55%

UT Mixed Investment 20%-60% Shares                         -1.83%             3.34%             5.08%         24.07%         32.76%

Invesco Perpetual Distribution Acc                                -1.99%             2.32%             2%             32.75%         50.07%


So summing up:

All 3 funds are worth a look:

- All 3 have generated positive returns in each of 5 discrete calendar years to 19 June, whereas their sectors were slightly negative in 2011 and only 4 out of 5 for the sector
- All 3 outperformed their benchmark in 4 out of 5 calendar years exept the last one
- All 3 have generated around 50 - 55% % over 5 cumulative years, compared to 40% for the 40-85% sector and 33% for the 20 - 60% sector; 

Not a lot to choose between them

- Invesco did lose Woodford, which is a concern going forward, and it's going forward/ the future that counts; but then again other 2 fixed income managers are good and add stability
- Invesco did dip in the last year vs the other 2, but then again they both under performed their sectors too
- Relative to its sector the Invesco fund has outperformed more than the other 2 historically, but then again the higher bond weighting if rates rise is a concern for the future

I really don't find it clear cut between the 3. However, I would rather hold any of the 3 than your average fund in the UK mixed fund sector.

Cheers
Fletch

<duck> me sideways, look at that lot.

Park it in a Mia Noi. Much a lotta more fun than Fletch's charts.

Prices have risen, the quid ain't what it was, it is either or.