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Neil Woodford v Mark Barnett: how do their numbers compare?

Can Woodford replacement Mark Barnett replicate his number?

 
Neil Woodford v Mark Barnett: how do their numbers compare?

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.   

2 comments so far. Why not have your say?

rickyroo

Oct 16, 2013 at 23:01

Please help!

Whilst I am aware of the difference between Investment Trusts and Unit Trust/Oeics and therefore understand that an Investment Trust can fall in price when a Manager leaves i.e. Edinburgh Trust on the announcement of Neil Woodford's departure, I am at a loss as to how his High Income fund could fall over 2% today. How in a unit linked fund is this possible?

Explanations from esteemed or informed readers please

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Anonymous 1 needed this 'off the record'

Oct 18, 2013 at 11:37

A number of the largest holdings Woodford held suffered sell offs as brokers think there may be outflows from his flagship holdings and as such the underlying holdings will need to be sold to accommodate the outflows thus pushing the share price of those holdings down. As the sell off by the brokers has reduced the underlying holdings share price the unitsed funds will drop in value as their NAV reduces as a consequence of these share price drops. Capita is one such example that suffered around a 4% drop.

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