Renowned investor reveals top 10 holdings in his new Woodford Equity Income fund
Neil Woodford's new Woodford Equity Income fund has large holdings in AstraZeneca and GlaxoSmithKline, the drugs makers Photo: Jeff Gilbert
Neil Woodford, Britain's most celebrated fund manager, has announced the top
10 holdings in his new fund, the Woodford Equity Income fund.
The £1.6bn portfolio contains many names familiar to investors in the funds he
used to manage at Invesco Perpetual, such as AstraZeneca, which accounts of
8.3pc of the new fund, GlaxoSmithKline (7.1pc of the fund) and British
American Tobacco (6.2pc).
Two other tobacco companies, Imperial Tobacco and Reynolds American, also make
the top 10, as well as a third drugs maker, Roche. The other top holdings
are BT, Rolls-Royce, Capita and Imperial Innovations, which invests in life
science and technology companies spun out from top universities including
Imperial College London.
Imperial Innovations is by far the smallest company in the Woodford Equity
Income top 10, with a market value of about £390m. AstraZeneca, by
comparison, has a market value of almost £56bn. Imperial Innovations
accounts for 3.6pc of the Woodford fund, which means that the fund owns
about 13.5pc of the company.
It is understood that Mr Woodford took advantage of an opportunity to buy
Imperial Innovations shares and won't seek to maintain its current weighting
as the fund grows. Taking a large stake in a relatively small company is not
always possible without causing the price to rise sharply.
Here are the top 10 holdings of the Woodford Equity Income in full.
AstraZeneca 8.3pc
GlaxoSmithKline 7.1pc
British American Tobacco 6.2pc
BT 6pc
Imperial Tobacco 5.3pc
Roche 3.9pc
Imperial Innovations 3.6pc
Reynolds American 3.6pc
Rolls-Royce 3.5pc
Capita 3.4pc
Holdings as of June 30
Woodford Investment Management said it planned to publish a full list of the
fund's holdings in a week's time.
Mr Woodford said he had a "cautious" view of the world economy
because of the reining in of "quantitative easing" and falling
expectations for global economic growth. As a result he was avoiding sectors
that he saw as vulnerable.
“My cautious view on the global economy hasn’t changed," he
said. "The liquidity flows that have supported asset prices over the
past five years are going into reverse, while growth in many parts of the
world is being downgraded.
“The global economy and financial markets both face a tricky time over the
next few years, but there are still many undervalued assets in equity
markets and it is these opportunities that the fund is seeking to exploit."
He added: “I’ve been using a pilot analogy to explain the process of building
the portfolio of my new fund. We have taken off and we have already gained a
lot of height, but we are not yet at cruising altitude. The portfolio will
continue to evolve.
“I have been very careful in building a portfolio that avoids sectors that I
believe are vulnerable to a faltering global economy. There is significant
emphasis in my new fund on the tobacco and pharmaceutical sectors. These two
sectors are resilient to falling demand, have strong balance sheets and
attractive valuations."
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