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    July 14, 2019
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RAYMOND JAMES PROMOTION hetors RAYMOND JAMES INVESTMENT SERVICES The demise of Neil Woodford liquid holdings without causing their prices to drop. This issue Jeil Woodford CBEwas lauded Income fund was on the 'Wealth by the BBC in 2015 as The man who cannot stop making money". Once Known as "Britain's s0 list of Hargreaves Lansdown top picks and he was also the manager for a range of St James Place approved funds creased a snowball effect of hurting performance by deflating the price of his portfolio holdings, which in turn caused more outflows and so on Warren Baffethis career now lies in tatters with his face strewn over the tabloids almost daily, accompanied by disparaging headlines WHY DID IT HA PEN? Due to prolonged poor performance investors have been heavily withdrawing from the fund. There are two issues here LESSONS TO LEARN Iwould be very careful what of you read about funds and their ratings, even ifendorsed by the likes of SIP orHargreaves Lansdown. The problem with many highly rated funds is that they are very large which makes it hard to be nimble and gives them liquidity issaes when redemptions are large. is also important to be aware of the shoetcomings of open-ended funds in general. Because they have to sell out of underlying investments at time of outflows, they are often forced to sell their assets at the worst times. WHAT HAPPENED? Woodford's flagship UK equity income fund, which was one of the The first issue is that the fund has a lot of its assets in illiquid and unquoted securities. Woodford has been unable to sell these quickly enough to be able to keep within the regulators' limits. As he sold off his more liquid assets to deal with redemptions, the unquoted, illiquid securities became a relatively higher largest, highest rated, most popular UKEquity funds, was suspended to investors on June 3rd for at least a month, but this will likely be many more. This means that, during this period, investors are completely unable to access their investment within it, causinga whole host of problems. The fund may even end up being wound up. Woodford's Equity percentage of the ponfolio. The suspension should give him the time to dispose of these unquoted and illiquid investments, although a buyer has to be found for them. He will likely be selling these assets RAYMOND JAMES INVESIMENTSERVICE We prefer to imvest directly where possible rather than through funds at a substantial discount which will This allows us to reduce the tiers of fees, increase transparency and. control and allows us to only invest in highly liquid investments that can further hurt performance. Novestment Advice The second issue is that because of the very large size of the fund, he was unable to sell down even its Stockbroking be sold within seconds.* RAYMOND JAMES Ribble Valley 8 Bery Lane, Longridge, Preston, Lancs, PR3 3JA 01772 780300 www.rjiswealthmanagement.co.uk Rk Waming Win vong your capts sat rok RAYMOND JAMES PROMOTION hetors RAYMOND JAMES INVESTMENT SERVICES The demise of Neil Woodford liquid holdings without causing their prices to drop. This issue Jeil Woodford CBEwas lauded Income fund was on the 'Wealth by the BBC in 2015 as The man who cannot stop making money". Once Known as "Britain's s0 list of Hargreaves Lansdown top picks and he was also the manager for a range of St James Place approved funds creased a snowball effect of hurting performance by deflating the price of his portfolio holdings, which in turn caused more outflows and so on Warren Baffethis career now lies in tatters with his face strewn over the tabloids almost daily, accompanied by disparaging headlines WHY DID IT HA PEN? Due to prolonged poor performance investors have been heavily withdrawing from the fund. There are two issues here LESSONS TO LEARN Iwould be very careful what of you read about funds and their ratings, even ifendorsed by the likes of SIP orHargreaves Lansdown. The problem with many highly rated funds is that they are very large which makes it hard to be nimble and gives them liquidity issaes when redemptions are large. is also important to be aware of the shoetcomings of open-ended funds in general. Because they have to sell out of underlying investments at time of outflows, they are often forced to sell their assets at the worst times. WHAT HAPPENED? Woodford's flagship UK equity income fund, which was one of the The first issue is that the fund has a lot of its assets in illiquid and unquoted securities. Woodford has been unable to sell these quickly enough to be able to keep within the regulators' limits. As he sold off his more liquid assets to deal with redemptions, the unquoted, illiquid securities became a relatively higher largest, highest rated, most popular UKEquity funds, was suspended to investors on June 3rd for at least a month, but this will likely be many more. This means that, during this period, investors are completely unable to access their investment within it, causinga whole host of problems. The fund may even end up being wound up. Woodford's Equity percentage of the ponfolio. The suspension should give him the time to dispose of these unquoted and illiquid investments, although a buyer has to be found for them. He will likely be selling these assets RAYMOND JAMES INVESIMENTSERVICE We prefer to imvest directly where possible rather than through funds at a substantial discount which will This allows us to reduce the tiers of fees, increase transparency and. control and allows us to only invest in highly liquid investments that can further hurt performance. Novestment Advice The second issue is that because of the very large size of the fund, he was unable to sell down even its Stockbroking be sold within seconds.* RAYMOND JAMES Ribble Valley 8 Bery Lane, Longridge, Preston, Lancs, PR3 3JA 01772 780300 www.rjiswealthmanagement.co.uk Rk Waming Win vong your capts sat rok