View the article online at http://citywire.co.uk/money/article/a709790
Neil Woodford v Mark Barnett: how do their numbers compare?
Can Woodford replacement Mark Barnett replicate his number?
Investment is famously motivated by a balance between fear and greed: Neil Woodford’s investors were in many cases in his fund because they appreciated his ability to walk the line between the two.
His flagship fund, the £14 billion Invesco Perpetual High Income fund , has returned 208% since 1999 versus an index (IMA UK Equity Income) return of 66%. Over that period his deepest drawdown (the biggest downward swing in the fund's value) has been -17.49% versus a peer average figure of -23.38%.
That lack of volatility was enough for many investors to forgive the fact that for much of the time within that period – particularly since the 2009 bounce – his compound annual return has run below peer-average.
Can his replacement Mark Barnett replicate those numbers? Over the last 10 years Barnett lags Woodford by 197% to 218%. He knocks the peer average of 119% out of the ring however.
Over five years the situation is reversed, with Barnett returning 90% to 72% versus the peer average of 65.9%.
Over time, Barnett’s drawdown has consistently run a few basis points below Woodford’s – for instance in the depths of 2008 he recorded a maximum discreet loss of 19.89% versus -17.49%.
But equally in recent years he has consistently offered higher compound annual returns – particularly since the beginning of this year as markets have rallied hard globally.
So occasionally more return, consistently a little more risk – although given that is relative to one of the safest pairs of hands in UK equity management, that is probably not cause to start panic selling.
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by Gavin Lumsden on Sep 30, 2016 at 17:23