I had only bought the Edinburgh Investment Trust in October of last year and have now sold it. The story of why I bought it can be read here.
So why have you sold it?
I sold primarily because the markets are currently a bit frothy and I felt the need to reduce our share-holdings. From my previous blog you can see that I didn’t have a great deal of conviction in this fund from the start. So I’m not surprised it was the first on my list to sell. If markets go higher in the short term be prepared to see me sell more of our share-holdings. A profit can’t be counted whilst it is still invested.
Did it do what you wanted?
Well yes and no. I wanted to see the price rocket as Neil Woodford rode back in like a true English Knight in shining armour. But I’m still waiting; I now don’t think he is coming. But interestingly I don’t think anybody cares anymore. The new manager (I won’t bore you with his name mainly because I can’t be bothered to look it up) seems to have done an OK job. So my plan hasn’t worked.
Have we lost money then?
No. Far from it. Fortunately there were enough value seekers like me around that like a bargain. From the chart above you can see the fund has broadly tracked the FTSE All share index, except between the time we bought through to December. Here the chart shows the index falling but the fund growing. It is the only time the fund and the index has moved in different directions. It was likely caused by more individuals like us buying the fund whilst on the whole shares in the index were being sold.
How much was made?
Over the 8 month period the fund grew by 5.54% whilst the index returned 2.40%. That’s a difference of over 3% which based on an average 5% client holding equates to around an extra £65,000 spread across the clients.
Yes. If I would have known that Neil wasn’t coming back I would have sold in January and still made the same amount of profit. The investment worked but probably we would have seen a further 5% if he had returned. There is no point continuing to wait because others will also lose faith in his return and our profit could be lost if they sell before us.