Managed Funds (Pie etc) - Risk to look out for

[Schrodinger]

https://www.theguardian.com/business/2019/jun/09/hargreaves-lansdown-apologises-to-clients-in-neil-woodford-fund

"Chris Hill, its chief executive, said he shared clients’ disappointment and frustration after the closure of the Woodford equity income fund which prevented investors from cashing out (https://www.theguardian.com/money/2019/jun/08/are-your-savings-trapped-in-neil-woodford-fund) of the ailing investment vehicle."

"His firm has come under fire from investors who will not be able to access their investments until the suspension is lifted. Investors have also criticised the City regulator, the Financial Conduct Authority, for failing to see the risks taken by Woodford."

Just a friendly reminder that this generally happens when the market turns or the "picks" dont work. The long withdrawl period for general business is in my opinion risky but if this turns sour and theres a run on the fund then you are locked in. Worth the extra 2% extra return?

Dont have all your money in one of these funds.

[Schrodinger]

https://www.theguardian.com/money/2019/jun/08/are-your-savings-trapped-in-neil-woodford-fund

https://woodfordfunds.com/words/blog/suspension-update-from-neil/#main

Funds explained:

https://www.youtube.com/watch?v=zuYyTVAKbjA

[Joshuatree]

Dont have all your money in one of these funds.[/COLOR]

Agree with that.

[Jaa]

https://www.theguardian.com/business/2019/jun/09/hargreaves-lansdown-apologises-to-clients-in-neil-woodford-fund

"Chris Hill, its chief executive, said he shared clients’ disappointment and frustration after the closure of the Woodford equity income fund which prevented investors from cashing out (https://www.theguardian.com/money/2019/jun/08/are-your-savings-trapped-in-neil-woodford-fund) of the ailing investment vehicle."

"His firm has come under fire from investors who will not be able to access their investments until the suspension is lifted. Investors have also criticised the City regulator, the Financial Conduct Authority, for failing to see the risks taken by Woodford."

Just a friendly reminder that this generally happens when the market turns or the "picks" dont work. The long withdrawl period for general business is in my opinion risky but if this turns sour and theres a run on the fund then you are locked in. Worth the extra 2% extra return?

Dont have all your money in one of these funds.

PIE are obviously aware of this risk as the withdrawal notice period on their riskiest fund is 3 months. That fund is also currently 50% cash, causing its performance to suffer.

[Joshuatree]

Sensible though , who knows whats around the corner. Same with our shares albeit more liquid. Successful savvy guys i know, ride out the cycles usually in larger companies though.

[SBQ]

https://www.theguardian.com/money/2019/jun/08/are-your-savings-trapped-in-neil-woodford-fund

https://woodfordfunds.com/words/blog/suspension-update-from-neil/#main

Funds explained:

https://www.youtube.com/watch?v=zuYyTVAKbjA


I think the same can be said for the opposite for funds that are at the top winning. It's like the argument goes, if 1000 fund managers went out to pick stocks for their clients, you're going to find 1 or 2 that will beat the S&P500 index after 10 years. But who would be willing to think those 2 would repeat the same performance, when they've only been lucky? Diversifying will end up be the same.

PIE funds are just a tax break for those that are in the top income tax bracket but get the benefit of the maximum 28% tax rate in that fund, when the person could easily be at the much higher tax rate.