Woodford income focus fund

[nmdhqbc]

If it truly is a global fund its benchmark should be a global index, not a national one.

No one (including Neil) said it was a global fund. Just that it is not restricted geographically. Big difference.

[OhNoNotimAgain]

If it truly is a global fund its benchmark should be a global index, not a national one.

No one (including Neil) said it was a global fund. Just that it is not restricted geographically. Big difference.

If it has the potential to select an investment from anywhere in the world then the opportunity for return is global. Therefore the benchmark must be global.

The reason it is not doing that uis simply to confuse the punters by saying, look we beat our benchmark, but without pointing out that it invested outside the benchmark. Woody has been doing it for years without anybody pointing ourt this discrepencay and it has made him a millionaire. Why would he stop now?

Rob

[nmdhqbc]

If it has the potential to select an investment from anywhere in the world then the opportunity for return is global.

Not really. It's his fund to run as he wanted to outline at the get go. He decided not to restrict himself but he has also not declared it a "global" fund as such. He's just not restricted himself. There's no need to fit any mold like you seem to want him to. He can invest to whatever strategy he wants. I'm guessing funds have to declare a benchmark? If they did not have to I'm guessing he'd probably not bother. I don't care what benchmarks are used. I look at each fund on it's own merits and how well it suits me.

Therefore the benchmark must be global.

Clearly this is not the case. Unless you are setting your own set of rules which you are going to somehow enforce by posting here.

The reason it is not doing that uis simply to confuse the punters by saying, look we beat our benchmark, but without pointing out that it invested outside the benchmark. Woody has been doing it for years without anybody pointing ourt this discrepencay and it has made him a millionaire. Why would he stop now?

This again is simply not true. He did not get into the headline loads of investment articles by slight of hand you're suggesting. He did it by performing well in absolute terms. Benchmark is irrelevant. The numbers speak for themselves. He did better than the rest for decades. Investors don't care what benchmark it has. They care about the money growing.

[OZYU]

No Rob.

'Woody' is welcome to his millions, over the last twenty five odd years he has made us, and countless others, serious money.

As for the choice of benchmark, if he ends up with only a few non UK holdings as I suspect he will, then it will be fine and of little importance.

Ozyu

Disc. Mrs 'Oz' has a smallish reference holding(£12,876.78) in 'Woody's' current income and growth fund in her ISA, no plans to invest in the new one because she has other plans at present, but nothing against it either.

Moderator Message:
Personal attacks removed. Any more may result in sanctions being imposed.

TJH

[OhNoNotimAgain]

This again is simply not true. He did not get into the headline loads of investment articles by slight of hand you're suggesting. He did it by performing well in absolute terms. Benchmark is irrelevant. The numbers speak for themselves. He did better than the rest for decades. Investors don't care what benchmark it has. They care about the money growing.

Of course you need a benchmark. The asset class of UK equities has delivered fantastic returns over the long term and that can now be easily accessed by low cost, low risk passive funds and, in some cases, better yields than the competition. Woody is offering a product that will incur more costs, probably more risk and with no certainty of being able to deliver a better return than the benchmark.

Rob

[mc2fool]

Of course you need a benchmark. The asset class of UK equities has delivered fantastic returns over the long term and that can now be easily accessed by low cost, low risk passive funds and, in some cases, better yields than the competition. Woody is offering a product that will incur more costs, probably more risk and with no certainty of being able to deliver a better return than the benchmark.

As opposed to passives, which are guaranteed to do worse than the benchmark.

In any case, benchmarks are just a means for fund managers to make excuses when they lose their investors money.

[OhNoNotimAgain]

Of course you need a benchmark. The asset class of UK equities has delivered fantastic returns over the long term and that can now be easily accessed by low cost, low risk passive funds and, in some cases, better yields than the competition. Woody is offering a product that will incur more costs, probably more risk and with no certainty of being able to deliver a better return than the benchmark.

As opposed to passives, which are guaranteed to do worse than the benchmark.

In any case, benchmarks are just a means for fund managers to make excuses when they lose their investors money.

In fact that is not the case. Some passives outperform their benchmarks, which raises interesting questions about tracking error.

Equity investing means that you have to take a long term view. Sure, you might suffer a capital loss in the short term. However, the recent publication of the 2017 Barclays Equity Gilt study agains emphasises the importance of reinvested dividends to generate better long term returns than other asset classes.
Over the last ten years UK equities have delivered a real annual return of 2.5% compared to -1.3% for cash.

Having and using the correct benchmark tells investors what the default return should be and then they can determine how much value an investor has added.

Rob

[nmdhqbc]

Having and using the correct benchmark tells investors what the default return should be and then they can determine how much value an investor has added.

Sometimes a fresh perspective helps. I've garnered from other posters comments that you work in the industry. I think that as such you're stuck in the industry ways. You have is set in stone that this is the way things have to be. As a freshish outsider I don't see why I need to be restricted in my thought process like this. I can and will determine for myself what performance is good or suits me. I do not need them to decide for me what to benchmark to. If I want to check performance within a sector I can. Or if I care more to compare a particular fund / IT to a different sector I can. I assess my investments old and prospective on my own terms. What I choose to compare investments to will and should be different to the next person.

[nmdhqbc]

Woody is offering a product that will incur more costs, probably more risk and with no certainty of being able to deliver a better return than the benchmark.

There's no certainty of anything in investing. You take your chances. Decades of outperformace is enough evidence to suggest he'd have a decent enough chance. And his charges are lower than most open ended active funds.

[OhNoNotimAgain]

Having and using the correct benchmark tells investors what the default return should be and then they can determine how much value an investor has added.

Sometimes a fresh perspective helps. I've garnered from other posters comments that you work in the industry. I think that as such you're stuck in the industry ways. You have is set in stone that this is the way things have to be. As a freshish outsider I don't see why I need to be restricted in my thought process like this. I can and will determine for myself what performance is good or suits me. I do not need them to decide for me what to benchmark to. If I want to check performance within a sector I can. Or if I care more to compare a particular fund / IT to a different sector I can. I assess my investments old and prospective on my own terms. What I choose to compare investments to will and should be different to the next person.

Yes I do work in the industry but I think few people would say I am stuck in the industry ways. I am a challenger, an outsider, and that disconcerts peoplewho like certainties.
I know there is a point of view now to dismiss experts but I feel there is a benefit to experience and to an understanding of how the industry works. Even so, I am continually surprsised at the new and complex ways it creates to bamboozle investors. For instance, do you know which web sites include passive funds in their performnance league tables and which don't?

You probably know that different classes have different risk and returns characteristics. Blending them can of course improve one or both of these and it is helpful to know the raw ingredients to form an opinion of the end result. After all, if someone put a large engine in a small car you would surmise that it would go fast but have poor fuel consumption relative to the same car with a smaller engine.

Rob

[nmdhqbc]

For instance, do you know which web sites include passive funds in their performnance league tables and which don't?

Everyone has something to peddle. You do your best here, they do their best there. The middle sensible ground is not loud enough to get heard. Both passives and actives will have their moments in the light and it's not a one way is right or wrong situation.

[nmdhqbc]

I am continually surprsised at the new and complex ways it creates to bamboozle investors.

I feel that by ignoring official sectors and benchmarks. Taking a step back from the technicalities that pigeon hole one fund in one category and one in another I'm much less confused that I might be. I've (and so could others) simplified it for myself for the better.

[saechunu]

I can and will determine for myself what performance is good or suits me. I do not need them to decide for me what to benchmark to.

Indeed. I've found the best benchmark for my portfolio is whether it meets my needs.

Everyone has something to peddle. You do your best here, they do their best there.

And, importantly, with most (other) posters around here have nothing to peddle and are thus agenda-free, they're probably the ones worth paying most attention to.

[Itsallaguess]

Moderator Message:
edited as referred post deleted. Raptor.

:O)

Itsallaguess

[OhNoNotimAgain]

For instance, do you know which web sites include passive funds in their performnance league tables and which don't?

Everyone has something to peddle. You do your best here, they do their best there. The middle sensible ground is not loud enough to get heard. Both passives and actives will have their moments in the light and it's not a one way is right or wrong situation.

I am not allowed to peddle anything here, just making the point that some websites present only a percentage of the available funds on their performance tables so some funds do not even get considered by investors. That tilts the playing field and I would argue it tilts it against the public.

Rob

[nmdhqbc]

I am not allowed to peddle anything here, just making the point that some websites present only a percentage of the available funds on their performance tables so some funds do not even get considered by investors. That tilts the playing field and I would argue it tilts it against the public.

They exclude all passives from lists, you talk down all actives. So how about we say you are not peddling and also they are not peddling.

Those websites you refer to are not the only ones that exist. I'm sure there's plenty with neutral tendencies and some that edge to your side of things. I don't think you can complain too much just because they don't all happen to go your way. I read and hear on podcasts about how passive is better ALL the time. Probably more so on balance than the other way. I think you point of view is represented plenty on the web and media in general. No need to get all Trump screaming "FAKE NEWS" just because some don't do what you want. You have your Fox News equivalents too. Chin up.

[OhNoNotimAgain]

Those websites you refer to are not the only ones that exist. I'm sure there's plenty with neutral tendencies and some that edge to your side of things.

Really? Please show me.

Rob

[nmdhqbc]

Really? Please show me.

I just took a random look online....

Trustnet: home page has "Passive Funds" section and a drop down menu for ETF's. All fund info there. Seems pretty neutral to me.

HL Wealth 150+ has tracker funds recommended for each sector along with their active recommendations. Pretty neutral.

Interactive Investor: Has section for ETF just as they do for active funds. Pretty neutral.

Nutmeg: in their "how we invest" section it says "we keep things simple with low-cost, high-quality exchange-traded funds (ETFs)". So completely on the passive side. Not even an option to go active.

Wealthify: "Your money is invested into mainly passive investment funds, such as Exchange Traded Funds [ETFs] and Mutual funds". So not fully but tending towards your way.

MoneyFarm: "We invest your money in low-cost, liquid, exchange-traded funds (ETFs), building you a portfolio that will maximise your returns over time." Completely passive.

Warren Buffet is pro passive even though he is active. Has bets with hedge fund managers and tells his possible widow to be to put all her cash in a S&P tracker and bonds.

Hard to list without listing to hours and hours of podcasts again but... I listen to lots of investing shows and I've come away with the overall impression that they advise passives more then actives. I think for myself though and I understand that things will swing in and out of favor of both. Plus I'm happy to take the chance to try and beat the market. So I just have 1 FTSE 250 tracker and the rest is active.

I think you just like to play the martyr. The fact is passive is hugely in vogue at the moment. But you always see the bad news (from your perspective).

[OhNoNotimAgain]

Really? Please show me.

I just took a random look online....

Trustnet: home page has "Passive Funds" section and a drop down menu for ETF's. All fund info there. Seems pretty neutral to me.

HL Wealth 150+ has tracker funds recommended for each sector along with their active recommendations. Pretty neutral.

Interactive Investor: Has section for ETF just as they do for active funds. Pretty neutral.

Nutmeg: in their "how we invest" section it says "we keep things simple with low-cost, high-quality exchange-traded funds (ETFs)". So completely on the passive side. Not even an option to go active.

Wealthify: "Your money is invested into mainly passive investment funds, such as Exchange Traded Funds [ETFs] and Mutual funds". So not fully but tending towards your way.

MoneyFarm: "We invest your money in low-cost, liquid, exchange-traded funds (ETFs), building you a portfolio that will maximise your returns over time." Completely passive.

Warren Buffet is pro passive even though he is active. Has bets with hedge fund managers and tells his possible widow to be to put all her cash in a S&P tracker and bonds.

Hard to list without listing to hours and hours of podcasts again but... I listen to lots of investing shows and I've come away with the overall impression that they advise passives more then actives. I think for myself though and I understand that things will swing in and out of favor of both. Plus I'm happy to take the chance to try and beat the market. So I just have 1 FTSE 250 tracker and the rest is active.

I think you just like to play the martyr. The fact is passive is hugely in vogue at the moment. But you always see the bad news (from your perspective).

Have a look at a passive fund on Trustnet and see if you can find the same detail on ranking, quartile, beta, Information ratio and so on that you get for an active fund. You won't find it because Trustnet does not provide that data for rules based funds, with one exception.

The other ones you quote are, at best, neutral or favour ETFs which are more complex than OEICs.

None of them are biased in favour of passives as you claim. A website simply saying it favours passives is quite different from a website that ranks funds by performance, and then omits 10% or one that does not provide the same level of data for passives as it does for actives.

Rob

[mc2fool]

Have a look at a passive fund on Trustnet and see if you can find the same detail on ranking, quartile, beta, Information ratio and so on that you get for an active fund.

No, they use a different methodology more appropriate to passive funds.

"FE has long rated managers’ ability to outperform, but the original FE Crown Fund Rating does not do justice to the growing passive fund market, which currently accounts for over $100bn in the UK alone.

Unlike an active fund which attempts to beat its designated benchmark, passive funds and ETFs attempt to track their index, with the aim of delivering a return as closely in line with it as possible. Comparing active and passive funds using the same rating methodology is therefore flawed.

As a result, FE has introduced the FE Passive Fund Rating. Passive funds will be awarded between one and five Passive Crowns, based on their ability to track their index over a three year period. We have launched a dedicated Passives Funds section on the site that allows advisers and investors to filter out passive funds in a number of different ways, including by FE rating. " https://www.trustnet.com/learn/learnabo ... gs.html/1/

You won't find it because Trustnet does not provide that data for rules based funds, with one exception.

That wouldn't, perchance, happen to be the fund you run, would it? Possibly that, and your upset with them, is because: "Smart beta products are not passive funds, they are actively managed funds that use passive investments, therefore they don’t qualify to be rated." https://www.trustnet.com/News/598811/pa ... ?preview=1