14th July 2014
Star manager Neil Woodford has gone against tradition in the world of fund management and published the entire contents of his newly launched portfolio.
While the vast majority of fund management groups only publish the top 10 holdings of any vehicle, the CF Woodford Equity Income fund has gone the whole nine-yards by allowing investors to examine all of its 61 constituents – and the percentage they represent (see table below).
The portfolio will be updated every month on the Woodford Investment Management website.
The former Invesco Perpetual fund manager says he is building a portfolio that avoids sectors and stocks that he believes are vulnerable to a faltering global economy and fund’s top 10 holdings highlight significant emphasis on the pharmaceutical and tobacco sectors.
Woodford believes that the fund’s investments within these two sectors will be resilient in the face of a general weakening economic environment – they have strong balance sheets and attractive valuations.
Right now, AstraZeneca, GlaxoSmithKline and British American Tobacco are his top three stock-picks.
The portfolio also includes several early-stage businesses, many of which are linked to scientific research emerging from universities across the UK.
Woodford says: “I strongly believe that investing in early-stage businesses can add meaningfully to the long-term performance of the fund, albeit individual positions will be small in the context of the overall portfolio.
“The UK has some of the best universities in the world, developing some of the best intellectual property. Unfortunately, as an economy, we have not had a good track record of converting these great ideas into long-term commercial success. There are many reasons for this, but the principle one is a distinct lack of access to appropriate long-term patient capital.”
Woodford asserts that this combination of great innovation and a lack of capital has created some very exciting investment opportunities, “which the fund is seeking to take advantage of via a portfolio of early stage investments”.
The CF Woodford Equity Income fund, launched on 2 June 2014, and raised a record breaking £1.6bn. Previously Woodford managed the Invesco Perpetual Income and High Income funds. The latter portfolio fund, which he ran for more than 25 years, was the best performing fund in the equity income sector under his management, turning a £10,000 investment into £230,000.
CF WOODFORD EQUITY INCOME FUND PORTFOLIO (AS AT 30 JUNE 2014)
|3||British American Tobacco||Consumer Goods||6.20|
|5||Imperial Tobacco||Consumer Goods||5.31|
|8||Reynolds American||Consumer Goods||3.55|
|15||Legal & General||Financials||2.09|
|20||Reckitt Benckiser||Consumer Goods||1.83|
|21||Philip Morris International||Consumer Goods||1.81|
|25||Smith & Nephew||Health Care||1.27|
|38||Velocys||Oil & Gas||0.55|
|47||4D Pharma||Health Care||0.43|
|48||Oxford Pharmascience||Health Care||0.35|
|55||Retroscreen Virology||Health Care||0.09|