Investment matters
Later this month investors in Neil Woodford’s flagship fund Equity Income will receive their first pay out since it was suspended – known as “gated” in the trade.
“ Equity income” is a misnomer as the equities were mainly private companies and illiquid (he could find no market as investors withdrew their cash) and there is no income except for Woodford, who continued to charge fees.
He led a charmed life (and lifestyle ), chiefly at Invesco, as a renowned stock picker. Now his reputation is in tatters and the fund is being liquidated.
I do not recall any warning from the financial press and there is some controversy as the fund was backed by Hargreaves Landsdown, a well-known brokerage and financial advisor.
Now the self-same press have digs at other successful fund managers like Nick Train and Terry Smith, despite the fact their funds are not invested in illiquid private companies.
It’s not the only financial scandal in recent months.
Another well-known company was fined for charging certain clients for active investment advice when they were “managing” passive funds, which require no advice.
There are some who neither have the time nor inclination to manage their own portfolio. In reality it’s not that difficult.
The Investors Chronicle, for example, provides excellent advice including a section where they examine someone’s investment portfolio critically.
An Independent Financial Advisor will charge 1% of the portfolio value, win or lose, and recommend managed funds who will also charge.
Rack these charges up front end and your first slice of profit – assuming you make any – goes to them.
Talking to Bob Tickler, he seems ahead of the game.
He invested in gold some time ago – now trading at over $15 per ounce; held and sold Fevertree, the great success story of the drinks industry; and Burford Capital who are successfully involved in litigation funding.
By the nature of the beast there is always going to be a Woodford and Bob allows for this with a 1% write-off. With banks offering 1% interest and FTSE dividends averaging at 3.5% he says investing in the stock market is a no-brainer but he prefers to do it himself.
