“From time to time, markets become detached from valuation reality and while they are, fund managers like me appear to be incapable of delivering good outcomes. I appreciate that this can be an uncomfortable journey for investors but valuation is the only reliable predictor of long-term investment returns. I remain focused on capturing the opportunity that exists in parts of the market that have been left behind since we voted to leave the EU two and half years ago. The portfolios are populated with profoundly undervalued companies, many that are exposed to the UK economy. Crucially, the portfolios are positioned how I want them to be and are completely focused on a valuation opportunity, the likes of which I haven’t seen for more than 30 years.”
— Neil Woodford
Global equity markets continued to move higher in March, allowing the UK stock market to deliver its biggest quarterly total return in six years. Leadership of the UK stock market was, as has been the case for much of the last three years, dominated by the large, global dollar-earners, such as the oil majors, mining companies and consumer goods companies.
Data from across much of the global economy, has continued to disappoint expectations. The US economy in particular, now appears to be losing momentum, prompting the Federal Reserve (the Fed) to significantly loosen its policy stance. Previously the Fed’s guidance had suggested two more interest rate increases were likely this year, with quantitative tightening (QT – the process by which the Fed reverses years of quantitative easing by reducing the size of its balance sheet, thereby withdrawing dollar liquidity from the financial system) expected to continue throughout the year. Now, the next move in interest rates might be down and the pace of QT will slow from May and will conclude at the end of September.
As a result of the stock market rally so far this year, bond and equity markets are now telling us very different things about the economic outlook. The yield on many long-dated US Treasuries, for example, recently moved below that of shorter-dated bonds. This is known as an “inverted yield curve”, which is often seen as an early warning sign that more troubling economic conditions are on their way. It is hard to reconcile this price behaviour in bond markets with the more buoyant mood in equity markets. We have more sympathy with the view expressed by bond markets currently and are positioned accordingly.
We continue to focus the portfolios where there are more attractive economic fundamentals. The UK is one such place. During March, we saw better-than-expected economic data in many different parts of the UK economy, including industrial production, unemployment, wage growth and retail sales.
WPCT annual report
Today saw the release of the Woodford Patient Capital Trust’s annual report for 2018, which includes Neil’s review of the year.
With so much perceived uncertainty surrounding the UK economy, we want to provide you with the full context on what’s been driving the performance of the funds (and indeed the broader stock market) for the past few years and the opportunities we believe lie ahead.
Three-month UK employment change – the best level since late 2015
+0.2%
UK retail sales growth in February – consensus expectations were for a -0.4% contraction
$25.50
Price per share that Biogen is paying to acquire Nightstar Therapeutics – a 72% premium to its undisturbed share price
August 2007
Prior to March’s yield curve inversion, the last time the US three-month interest rate was higher than the 10-year rate – shortly before the financial crisis
-20.7%
Year-on-year decline in the dollar value of China exports
-0.8%
German industrial production down in January, versus expectations of a +0.5% increase
$2.6bn
Amount committed by Burford Capital to new investments over the last two years – more than twice the total amount it had committed in the previous seven years since formation
3.4%
Average growth in UK weekly earnings data in January, ahead of expectations (3.2%)
-8.7%
US housing starts in February, well below expectations – January revised down too
Our strategy remains focused on avoiding the considerable risks that have built up in equity markets over the last decade of QE-fuelled exuberance and capturing the opportunity that exists in the few parts of the market that have been left behind. For the funds, this results in portfolios that have a strong but selective bias towards profoundly undervalued companies that are exposed to the UK economy.
Elsewhere, the Woodford Equity Income Fund and Woodford Patient Capital Trust portfolios continue to be positioned to capture an exciting long-term opportunity across a range of earlier-stage businesses exposed to the themes of healthcare innovation and disruptive technology more broadly.
To continue using the site you need to read the revised version and agree to the terms.
At Woodford1 we are committed to safeguarding and preserving your privacy.
This Privacy and Cookies Policy (together with the website Terms and Conditions) explains what happens to any personal data that you provide to us, or that we may learn about you while you visit our websites2, attend Woodford events, visit our offices, use our services or invest in one of the funds discretionary managed by us. This notice also informs you about your privacy rights and how the law may protect you.
We update this Policy from time to time, so please do review it regularly.
Please read the following carefully to understand our views and practices regarding your personal data and how we will treat it.
How and from where we may receive personal data
From you
When you contact or correspond with us (for example, by phone (including during recorded calls), e-mail or otherwise) for any other reason (for example, to request services from us);
When you use our Website, post comments on our Website or via social media;
When you report a problem with the Website;
When you:
register to receive information from us;
meet with us;
attend our events;
interact with us at third party events;
hand us your business card;
subscribe for blog alerts and bulletins;
sign up to receive news and updates from us;
participate in our surveys, competitions, questionnaires etc.; or
When you provide us with feedback, opinions and / or comments regarding the Website or our services.
Data from other sources
Like many other businesses, we may receive personal data from many sources. This section seeks to list various places from where we may receive personal data about you.
Data we indirectly gather about you:
When you use the Website, details of your usage (including the date, time, location or duration of the usage);
If you visit the Website, certain technical information, for example, the type of device (and its unique device identifier) you use to access the Website, the Internet protocol (IP) address used to connect your device to the Internet, your login information, browser type and version, time zone setting, browser plug-in types and versions, operating system, mobile network information and platform; and
Information about your visit to the Website including the full Uniform Resource Locators (URL), clickstream to, through and from the Website (including date and time), pages you viewed, page response times, download errors, length of visits to certain pages, page interaction information (such as scrolling, clicks, and mouse-overs), and methods used to browse away from the page.
Data we may receive from third parties
Companies that introduce you to us (such as financial advisers)
Financial advisers
Investment platforms through which you access our clients (investment companies and funds)
Investment fund administrators or shareholder/unitholder registrars
Social networks (e.g. google, twitter – see below for further details and our cookies policy below)
Public information sources such as Companies House or the Financial Conduct Authority’s Register
Market researchers/Data providers who collect and provide personal data from many sources for the specific and approved purpose of sharing such data with businesses like ours to help with our internal analysis (including assessing market trends, fund distributions statistics etc).
Marketing partners engaged to help distribute content on us and our services through any medium
Agents, consultants and advisers. These can be specialist companies who advise us on ways to develop and improve our services and products. These can also be types of firms that help us to prevent, detect and reports unlawful acts and fraudulent behaviours, in particular with regards to financial crime.
Government and law enforcement agencies
Purpose and legal basis for processing your data
Purpose of processing
Type of personal data
Legal basis for processing
To enable us to check your identity
Name, address, date of birth, passport details, driving license details and any other information you may provide us with
Legal obligation
To enable us to complete anti-money laundering checks to prevent financial crime and guard against market abuse activities
Name, address, date of birth, passport details, driving license details and any other information you may provide us with
Legal obligation
To deal with any enquiries, correspondence, concerns or complaints you have raised
Name, phone number, email address and details of the enquiry raised
Legitimate interests – to enable us to improve our services and the Website
To process any relevant payments
Bank, credit or debit card details
Performance of a contract with you
To enable us to process a referral from a third party (for example, a financial adviser)
Name, address, telephone number, email address, details of the referral and details of the third party making the referral
Legitimate interests – to enable us to process the referral
To compile internal reports and statistics of usage of the Website and our products and services
Name, details of any products or services purchased and the technical information mentioned above
Legitimate interests – to enable us to develop and manage our brands, products and services
To process your registration made via our Website to enable you (whilst acting on behalf of your company) to access the Woodford services
Your name, email address and company details (if applicable)
Legitimate interests – to enable us to provide you (where you have registered on behalf of your company) with Woodford online services
To send you our news items, marketing materials, product information, blog posts, insights and articles via email
Your name and email address
Legitimate interests – to enable us to communicate with business contacts
or
Consent – where we contact you in your personal capacity, for example where you are a user of our Website
To provide you with information, products or services that you request from us or which we feel may interest you
Your name and email address
Legitimate interests – to enable us to communicate with business contacts
or
Consent – where we contact you in your personal capacity, for example where you are a user of our Website
To assess how people use our products and services
Technical information as mentioned above
Legitimate interests – to enable us to improve our products and services
For our internal operations, including data analysis, testing, research, statistical purposes and troubleshooting
Technical information as mentioned above
Legitimate interests – to enable us to improve our products and services
As part of our efforts to keep the Website safe and secure
Technical information as mentioned above
Legitimate interests – to enable us to improve our products and services
To communicate with you if you wish to post on our Website
Your name, contact details, details of the post you wish to make and technical information as mentioned above
Legitimate interests – to review your request
To invite you to Woodford events
Your name, email address and details of the event
Legitimate interests – to allow us to obtain attendees for Woodford events
To enable us to host an event
Your name, email address, details of the event and any applicable dietary requirements (including relevant medical information)
Legitimate interests – to allow us to host Woodford events for attendees
The legal basis for processing any medical information to ensure we adhere to your dietary requirements and allergies will be consent.
To enable us to comply with our health and safety obligations when hosting an event (such as fire marshal duties)
Your name and details of the event you are attending
Legal obligation
To administer any quizzes and prize competitions we may run
Your name, email address, telephone number and your prize competition entry or quiz entry
Legitimate interests
To run polls in which you may choose to participate, for example via Twitter. We may then use the results of our poll (including your views) to inform our market insight or articles we may write
Your Twitter handle (or other relevant social media handle), the IP address associated with you (if relevant) and details of your response to the poll
Legitimate interests – collecting and analysing information for market analysis purposes, which you submit voluntarily
To receive feedback on our corporate governance and performance, including any views of investors in the funds that we manage
Your name, email address, telephone number and details of the feedback provided
Legitimate interests – collecting and analysing feedback on our performance and the performance of funds that we manage
To personalise the content you may see from us online (either on our Website or the websites of our online partners) if you have agreed to targeted advertising cookies
Your IP address and your consent to the use of targeted advertising cookies
Consent
To share your details (where you are an independent financial adviser business contact) with suppliers who carry out market analysis and information relating to IFAs, to enable them to take you into account in their research and analysis
Your name
Legitimate interest of the supplier – to carry out research and analysis on IFA market activity and publish information a directory of such activity – we would contractually require suppliers to whom we provide data to comply with data protection laws in their use of that data
Where we have a legal basis to use your personal data without consent (as we have described above), this Privacy and Cookies Policy fulfils our duty to process personal data fairly and lawfully and in a manner that you would expect given the nature of our relationship with you, by giving you appropriate notice and explanation of the way in which your personal data will be used.
Where consent is required for our use of your personal data as described above, we will request your consent. Typically, we would collect your consent by you performing an action such as ticking the appropriate consent box or otherwise communicating your consent to us (for example, by email or by you providing us with non mandatory information), you consent to our use of that personal data as set out in this policy.
You can always change your mind about our processing of your personal data. If you change your mind you can contact us by email at info@woodfordfunds.com, or in respect of marketing messages you can unsubscribe by using the unsubscribe link at the bottom of our marketing messages.
Cookie policy
Like most other websites, our website uses cookies. Cookies are small text files stored on your computer or mobile device by your browser. Cookies can be used to store certain preferences on a website or track if you have visited that site before.
No cookies used by Woodford store personally identifiable data such as:
Names
Phone numbers
Email addresses
Mailing addresses
Financial data
If you would like to limit or block the usage of cookies, you can do so in your browser settings. These settings differ between browsers.
By clicking “I Agree” on the cookie consent banner when you first access the Website and by using this site without changing your cookie settings, you are consenting to our use of cookies.
If you choose not to allow cookies, the quality of your browsing experience may be reduced and you may not be able to access all or parts of the Website. You can opt out of some individual cookies as described below.
For more detailed information about cookies and how they can be managed and deleted, please visit www.allaboutcookies.org.
Retaining personal data
We will retain the personal data we receive or collect about you for the period reasonably required for us to use it in accordance with this Privacy and Cookies Policy or in accordance with our legal rights and obligations. To determine the appropriate retention period for personal data, we consider the amount, nature, and sensitivity of the personal data, the potential risk of harm from unauthorised use or disclosure of your personal data, the purposes for which we process your personal data and whether we can achieve those purposes through other means, and the applicable legal requirements.
Your rights
You have the following rights with regard to your personal data:
Access: You have the right to access data we hold about you. This enables you to receive a copy of the personal data we hold about you and to check that we are lawfully processing it.
Rectification or erasure: You have the right to request that we rectify or delete any personal data that we hold about you (unless we have the legal right to retain it). If you request that we erase any personal data that we require in order to provide our products and services to you, you may no longer be able to use it. This right does not extend to non-personal data. It is likely to be necessary for us to retain your personal data to enable us to carry out a contract with you, and your rights under applicable law to request erasure may be limited accordingly. This means your rights under applicable law to request erasure may be limited accordingly.
Data portability: You have the right to obtain personal data we hold about you, in a structured, electronic format, and to transmit such data to another data controller if the legal basis for processing such personal data is consent or on the basis of performance of a contract.
Restriction: You also have the right to restrict us from processing your personal data if the data is inaccurate, the processing is unlawful or we no longer need to your personal data for the purposes for which we hold it.
Object / Change of preferences: You have a right to request that we stop processing your personal data where we are relying on a legitimate interest (or those of a third party). You also have the right to object where we are processing your personal information for direct marketing purposes. For example, if you have given your consent to receive updates from us about new products or services, but have changed your mind, you have the ability to opt out from receiving such communications going forward by contacting us using the details provided below or clicking the relevant link in any communications you receive. Please note, if you submit a request for us to stop processing your personal data in a certain way and this type of processing is required in order to provide you with our products and services, you will no longer be able to use our products and services following your request for us to stop the relevant processing.
Complaints: If for any reason you are not happy with the way that we have handled your personal data, please contact us. If you are still not happy, you have the right to make a complaint to the Information Commissioner’s Office.
Please note that if you ask us to stop processing your personal data in a certain way or erase your personal data, and this type of processing or data is needed to facilitate your use of any of our products or services you may not be able to use them as you did before. This does not include your right to object to direct marketing, which can be exercised at any time without restriction. Please allow at least 5 working days for your request to be actioned.
Please note that the rights mentioned above do not extend to non-personal data. Please also note that it is likely to be necessary to retain your personal data for the purposes of assessing and verifying data that is submitted by you and to manage our products and services, so therefore your rights under applicable law to request erasure may be limited accordingly.
If you would like to exercise any of the rights mentioned above, please contact us at info@woodfordfunds.com.
Disclosure of your personal data
investment funds/trust or companies (including their agents or service providers) discretionary managed by us, such as the LF Woodford Equity Investment Fund;
other companies in the Woodford Group and their agents;
service providers (for example, IT services), business partners, suppliers and sub-contractors for the performance of any contract we enter into with you, and for processing of our data on the basis of our legitimate interest (as we have explained in this policy) including providing you with marketing communications or developing and tailoring products. Such service providers may help us to update your records, carry out marketing fulfilment services (such as distributing our materials and reports) and help us analyse data for our own internal purposes;
analytics, market researchers, data partners and search engine providers that assist us in the improvement and optimisation of the Website, our services, our products and their distribution;
government or other law enforcement agencies, in connection with the investigation of unlawful activities or for other legal reasons (this may include your location information);
in the event that we sell any business or assets or receive investment into our business, in which case we may disclose your personal data to the prospective buyer or investor;
if we or substantially all of our assets are acquired by a third party, in which case personal data held by us, including your personal data, will be one of the transferred assets; and
if we are under a duty to disclose or share your personal data in order to comply with any legal obligation, or in order to enforce or apply the Terms and Conditions for our website or any other contract between you and us;
or to protect the rights, property or safety of Woodford, our users, and others.
Storing your personal data and transferring data outside of the EEA
In operating our website and our services it may become necessary to transfer data that we collect from you to locations outside of the European Economic Area (EEA), such as the US and Australia, for processing and storing. By providing your personal data to us, you agree to this transfer, processing or storing. This may involve the transfer of data by electronic media, including the internet.
There is no adequacy decision by the European Commission in respect of the US or Australia which means that the laws of these countries are not deemed to provide an adequate level of protection to your personal data. However, to ensure that your personal data receives an adequate level of protection we may implement any mechanism that is approved under data protection laws to ensure that your personal data is treated by those third parties in a way that is consistent with EU and UK laws on data protection. These measures could include the following:
EU-US Privacy Shield; and/ or
EU standard contractual clauses.
If you would like to find out more about this or obtain a copy of the relevant standard contractual clauses, please contact us at info@woodfordfunds.com.
Our Website can also be accessed and used worldwide, which means your data may be processed outside the EEA. Please note that the country from which you are accessing personal data may not provide an adequate level of protection for your personal data.
Security
All information you provide to us is stored on secure severs. We will use appropriate technical and organisational measures to safeguard your personal data.
Where we have given you (or where you have chosen) a password, you are responsible for keeping this password confidential. We ask you not to share your password with anyone.
We maintain (and ensure that anyone we share your personal data with maintains) appropriate technical and organisational measures to ensure that an appropriate level of security in respect of all personal data we process. Unfortunately the transmission of information via the Internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted via the website or any of our services; any transmission is at your own risk. Once we have received your personal data, we will use strict procedures and security features to try to prevent unauthorised access or inadvertent disclosure.
Third party links
On occasion we include links to third parties on this website. Where we provide a link, we are not responsible for the collection or use of your personal data from these third party websites. You should review their privacy policy before sending them any personal data.
Letting us know if your information is incorrect
If any of the information which we hold about you is incorrect, please tell us and we will amend it. You can write to us at Woodford Investment Management Ltd, 9400 Garsington Rd, Oxford, OX4 2HN or email us at info@woodfordfunds.com.
How to complain
This section tells you how you can contact us to complain about our data privacy processes and how you can contact appropriate government regulators.
Please let us know if you are unhappy with how we have used your personal data. You can contact us using info@woodfordfunds.com.
You also have the right to complain to the regulator, and to lodge an appeal if you are not happy with the outcome of a complaint.
In the UK this is the Information Commissioner’s Office. Find out on their website how to report a concern.
How to withdraw your consent and implication of not providing personal data
This section explains what to do if you no longer want us to hold or use your personal data. This section also explains the effects of not choosing to provide personal data.
Withdraw consent
You can withdraw your consent at any time. Please contact us at info@woodfordfunds.com if you want to do so.
This will only affect the way we use information when our reason for doing so is that we have your consent.
If you withdraw your consent or do not provide minimum personal data (like contact details), we may not be able to
provide information on certain products or services to you;
keep you informed on our business developments;
contact you regarding your desire to post on our website; or
report back to you on the status of any complaints you have made.
Contacting us
Please contact us if you have any questions relating to this Privacy and Cookies Policy at info@woodfordfunds.com.
Thanks for the update and analysis of the fund’s poor performance, which you have broken down and rationalised in the above analysis. As a customer I have a couple of thoughts: –
1) With your knowledge of the markets, your analysis and the way the market is behaving (momentum) could you not have protected your customers investment and the performance of the funds with a more balanced approach and taken advantage of some of the momentum activity to curb the losses? It seems that the fund is stuck in a dogmatic unyielding approach which is failing to give good returns.
2) 2 years ago, Brexit was 2 years away and as we have got closer it has become obvious that it will not be settled for sometime even if we leave, we will have some uncertainty for the UK after we leave so again surely you should have protected your customers investments with a more balanced approach and driven value from some of the momentum opportunities you clearly see in your day to day analysis.
3) In your analysis you do not analyse the effect on the funds’ performance due to the considerable redemptions from the fund by investors, neither do you reflect on the lost opportunity to the fund of the stocks that had to be sold to fund the redemptions surely this needs to be included.
So, I appreciate the analysis but wonder if just more of the same is going to drive returns for customers or do we have to wait it out, loose more money and hope for better returns. The better returns are going to have to be spectacular to allow the funds performance to catch up and overtake its peers.
The right approach would have been to have the courage of your convictions and protect your customers investments and the funds performance at the same time.
Hi Jon,
Thanks for the comment. The points you have made seem to be suggesting that Neil should abandon the disciplined investment principles that have served him and his investors so well throughout his long career, in order to deliver a more index-like performance over all time periods, and to avoid the risk of a prolonged period of under-performance.
This is something that he / we would not be prepared to do, because we wholeheartedly believe that it would not be in investors’ interests in the long run to do so.
To suggest that the “right approach would have been to have the courage of your convictions and protect your customers investments and the funds performance at the same time” is a contradiction, unless it is qualified with some form of time frame. A conviction investor like Neil cannot guarantee performance over any and every time period. A conviction investor can and should, however, stick to the principles of his / her investment discipline at all times, in order to build a portfolio that he / she believes will avoid a permanent loss of capital and deliver attractive long-term returns, based on the opportunity set that he / she sees ahead (even then, it is important to point out that there can be no guarantee of success – but we can at least point to a track record of prior success from the same approach, including occasional periods of under-performance that are similar to what we have recently endured).
That is what Neil has been doing – in fact, it is what Neil has always done, irrespective of whether his funds have been growing or shrinking in size. This disciplined investment approach has delivered exceptional long-term returns in the past, and we are very confident that it will deliver exceptional long-term returns going forward.
Admittedly, this approach has not delivered the outcomes we would have hoped for or expected over the last couple of years. We can understand why you and other investors are disappointed. But it would be absolutely the wrong thing to do, to react to this disappointing period of performance by abandoning our disciplined investment approach.
Kind regards
Mitch
Thanks for the update and analysis. With all the criticism Neil receives at the moment I admire the fact that Neil is sticking to his philosophy and investment approach. Neil’s professionalism and his ability to remain grounded gives me faith to trust him with my money. I hold two Woodford funds and will continue to drip feed money in for long term growth.
Hi Daniel,
Thanks for your comment and for your support. Investing without discipline is like sailing rudderless without a map. You might end up somewhere nice, but it is more likely to end in trouble, particularly when the seas get rough.
Kind regards
Mitch
It seems you have sold over 20% (6% of the equity) of your holding in NRR.It looks like Invesco bought this holding from you.Is this simply redemption related?.
Hi John,
This transaction should be seen in the context of maintaining the shape of the portfolio in an evolving market opportunity set. It does not represent a change of investment view.
Kind regards
Mitch
For investors on these pages concerned that they are (or have been) missing out on the market gains that momentum strategies have yielded for the best part of the last 10 years (i.e. during the ‘recovery’ phase of the financial crisis), it is probably important to note that a big reason for why these strategies have gone up, up and up was central bank intervention via quantitative easing that inflated financial asset prices. Momentum investing, especially those strategies employing a purely systematic style (i.e. that do not have any input from a fund manager but which completely allow algorithms to buy / sell based on market patterns) can be extremely risk – and one doesn’t need to go back too far to see this: just in the final quarter of last year, momentum funds have been absolutely battered. In fact, I don’t know of any momentum fund that has outperformed the market in Q4 of 2018 (i.e. during a time when you would hope that your money will do better than a falling market). The situation has become so complicated to navigate market patterns in a world in which financial markets’ gyrations seem to be dictated by the mood of the Fed that even Renaissance Technologies (one of the pioneers of [systematic] momentum investing) has cut back ‘sharply’ its use of strategies that bet on market patterns (see FT today). One reason for why these strategies haven’t worked in the market downturn is simply because momentum investing, by definition, believes that the past will continue, at least enough for the investor to make a return above cost – most strategies buy assets (let’s say stocks) that have been doing well for the past 6-12 months. In other words, most momentum investors were long (and quite a few of them also leveraged) the market right when the positioning (based on so, so many macro factors) supposed to be the opposite. It is almost impossible to call market tops, especially if you are basing your analysis on the past 6-12, even 24 months during which the market has only gone up – extrapolating the past can be dangerous and this is one of the main reasons why momentum can be extremely risky.
“During March, we saw better-than-expected economic data in many different parts of the UK economy, including industrial production, unemployment, wage growth and retail sales.” (Woodford)
This is from Chris Williamson, IHS Market:
“A drop in service sector activity indicates that UK GDP contracted in March, with the economy stalling over the first quarter as a whole and at risk of sliding into a deepening downturn in coming months. Both the services and construction sectors are now in decline and manufacturing is only expanding because of emergency stockpiling ahead of Brexit.
The underlying picture of demand is even worse than the headline numbers suggest. Service sector order books have contracted at the steepest rate since the height of the global financial crisis in 2009 so far this year, with companies reporting that Brexit uncertainty has dampened demand and led to cancelled or deferred spending, exacerbating a headwind from slower global economic growth.”
Why is this not mentioned in your update? Why don’t you give us the complete picture, not just a highly selective (and misleading) set of data to prove your investment case?
I would like to see more honesty and integrity from Woodford Management.
Dominik,
Some economic variables are more reliable than others. Some are forward looking, some are backward looking. Some are certainly more important than others, as a guide to what’s really happening. Consumer spending accounts for broadly 2/3 of the UK economy, so it is worth watching. The public finances are also a tangible guide to what is really happening in the economy, because they reflect real receipts from taxpayers. The labour market too is important, and it is undeniably strong at the moment. “More people in work, spending more money, leading to better tax receipts”. That is something we’ve been saying for some time now and, although it doesn’t fit neatly with the consensus view that the UK economy is a factory-closure away from recession, it is actually happening.
It is always possible to find data from somewhere which fits the narrative one wants to build but I genuinely do not believe that we are guilty of that here. We have consistently given you our view, based on what we believe to be the key drivers of the UK economy, where hard, reliable data is available. And we will continue to do that.
Kind regards
Mitch
11 April and no replies to some good questions. Communication is as poor as the trusts performance.
Apologies for the delay in responding to comments. Mitch is away from the office but we will respond as soon as we can.
Hello Dave
I have several funds and I don’t know any that have this type of communication where you can put your questions and get answers. So if Woodfords communication is poor what does that make all the other funds. As for the performance can’t really disagree there, but I’m happy to stick with them for the time being.
Hi David – thanks for pointing that out. Back now and on the case…
Kind regards
Mitch
I have never known a fund manager receive so much criticism in all my years of investing. It is unfair. Neil’s reading of the current situation is spot on. Stick with him and you will be well rewarded. Patience is needed.
Jeremy Boots
It is not unfair, its a reflection on the funds poor performance and failing to meet the objectives set out at launch.
If Neil’s reading of the situation is spot on then I feel it makes the current situation and the length of the poor performance more open to criticism, as the investment strategy of the fund could have been moderated to achieve half decent returns and stick to a long term strategy.
The level of communication is brilliant and Neil and his team have to be praised for openness and a willingness to communicate I wish all my other funds would do the same.
Thanks Jon and Miles.
I agree, Jeremy. I wonder if Warren Buffet got this much criticism during the years he underperformed the market (https://www.theatlas.com/charts/S1mAAANEz).
Thanks Jeremy – we are confident your support and patience will indeed be rewarded.
Kind regards
Mitch
Jeremy you are right regarding the patience for the patient capital fund it is what it says on the can, but the equity funds have missed some good opportunities, perhaps Mr Woodford should have been a bit cleverer and hedged some of his stock picks. He appears to have gone hell for leather in the hope of making massive gains but in doing so he has made possibly a penny share rookie error. I am down a few Bob in both funds and to be honest making the same mistake in not getting out with a stoploss. I despair.
Hi Dave,
Please see my response above, regarding conviction and investing with discipline. The concepts of hedging stock picks and stop losses are the anti-thesis of what disciplined, conviction investment is all about. Please do not despair. Here’s a quote from something Neil said a while back, which I believe represents wise words to bear in mind for any investment decision. “I believe it is critically important to maintain a disciplined, fundamentally-based perspective in my investment analysis. In all situations, it is vital that I do not let emotion influence my judgement.”
Regards
Mitch
Have reluctantly redeemed my holding today.Two years and 10% down.Enough is enough.
For what it is worth I have no faith in Purple Bricks whatsoever.Hope I am proved wrong for current investors.
The Card Factory outlets are forlorn looking places and the only plus is the decent dividend.
Is Mr Woodford too far removed from the nuts and bolts of stock picking and leaving some selecting to lesser mortals.You have to be ahead and head of the game to obtain any sort of return.
David
Sadly, I imagine that your post is reflective of how many others are thinking and acting. I agree with your comments about Card Factory and Purplebricks. Unfortunately, they are only two in a long list. Back in 2014, like many others I followed Neil Woodford on the new venture. I was confident based on Neil’s long track record and my own personal experience of investing with him.
First doubts arose with the NWBO situation. In spite of the WIM assurances that due diligence had been done on the governance of the organisation, I remained concerned that the excuse of the robustness of the product case had been relied on too heavily. In response, I transferred part of my holding to another fund. I checked this morning and the value of that transferred investment has risen by 111%.
Allied Minds followed. I read all of the available background at the time and, frankly, the short sellers’ case made more sense. Provident Financial then came along. Again, I was not satisfied by the WIM response and reduced my holding accordingly. Prothena just seemed to confirm the long list of failed binary bets. The investments I transferred at that time have grown by 60%.
Last year, as the EIF price dropped below £1.10, I sold the last of my holding in that fund. Like you, David, I did this with sadness but I simply had to protect myself. I split the funds across three investments, which have grown by 19%, 17% and 14% since then. Although I am disappointed not to have followed my instincts after the NWB debacle and sold out completely at that time, I am heartened by the fact that, if I had stayed wholly invested with WIM, there is no way, even if the projected shift towards “value” does occur, that the deficit can be made up.
I retain a small investment in the Patient Capital Trust because I have sympathy with its ethos but I have lost any real confidence that I will ever see my 20% loss improve. More worryingly, the lack posts each month and the more recent lack of responses from the team signals something fundamental about the future of the funds. Neil’s quote above is nothing short of nonsense from someone of his experience – “From time to time, markets become detached from valuation reality and while they are, fund managers like me appear to be incapable of delivering good outcomes.” Markets can’t become detached from reality – they are reality! Markets are not entities that can be wrong. Markets are simply a reflection of the decisions taken by millions of individual and institutional investors.
It is these statements and others in the media recently that give me real cause for concern for the future of the whole enterprise. With reference to the moderator’s comment on 12 April about Mitch being out of the office. I hope he is not unwell by, if so, my best wishes for a speedy recovery, both for him and the whole of WIM.
I fully understand why you did this and I wish I did this at the same time you did. I have been in the funds from the start, but now I’m getting ready to push the button myself. I agree on the stock picks and unless there is a turn around very soon both me and my wife will be pulling our funds out. The stock picks may have been cheap, but sometimes things are cheap for a good reason.
Hi David,
That is a shame but we respect your decision. We would like to reassure you though, that Neil is not at all removed from the stock picking process. Neil is responsible for all investment decisions across all mandates.
Regards
Mitch
Ray,
I am fine, by the way. It was just a holiday but I appreciate your good wishes.
I would just like to briefly reply to the point you have made about the quote on markets becoming detached from reality. I think I know what you are saying, in that what happens in financial markets is reality because it actually happens. That is why the quote reads “From time to time, markets become detached from valuation reality…”.
The point we are trying to make is that sometimes, what happens in financial markets does not reflect the reality of what is happening in the real world. Sometimes, this happens on a grand scale and, hence, you get asset price bubbles. Individual semper augustus tulip bulbs, for example, changing hands for more than the value of house. Or the Tokyo Imperial Palace becoming valued at a price equivalent to the entire state of California. Or Worldcom becoming worth more than Ford, Boeing and Merrill Lynch put together.
All of these things actually happened, but it is hard to argue that they bore any relation to valuation reality. And that is why these prices only persisted temporarily. As we have said before, we are concerned that this sort of valuation-insensitive behaviour has been increasingly evident in markets recently. It is, as you point out, the product of countless individual investment decisions. It is definitely easier to go with the herd than to go against it. But, we believe investors should be aware of the risks that have built up in markets as a result and tread carefully, because these are very dangerous market conditions.
Kind regards
Mitch
Anyone else buying Allied Minds? 😀