Funds Still Pushing Back On Full Transparencywritten by Bella Palmer
Fund manager Neil Woodford has for a long time been put on a pedestal as one the UK’s ‘rock star’ investment managers. And for good reason. Over many years, first in his role as manager for the Invesco Perpetual Income and Invesco Perpetual High Income funds, and latterly as head of his own asset manager, Woodford Investment Management, he has consistently outperformed the market. However, he has recently come under significant pressure for the first time in his career.
A period of
One of the biggest pressures Woodford’s funds
Woodford’s transparency is unusual in the fund world. Most funds will only publish details of their top 3-10 holdings from a total of up to 100 or more. There are a couple of reasons put forward for that. The first is not wanting to tip off competitors while building up stakes or generally allowing the wider market to see the detailed composition of funds. The second is avoiding the kind of disruptive scrutiny Woodford is currently subject to when things are not going well. If Woodford’s stake in AJ Bell had not been transparently declared it probably wouldn’t have been first in the firing line to be sold and held onto for several more months would suddenly have transformed into a major winner.
The FCA, who regulates UK-based funds, provides no clear directives on the level of transparency funds need to offer around their holdings breakdown. Which means it’s a decision taken by individual funds. For those investing online in
With arguments on both sides, fund transparency, or the lack of it, is likely to be an ongoing debate.
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