Neil Woodford has stuck to buying Britain’s largest drugmakers and cigarette makers for his new equity income fund, industries considered resilient to economic downturns.
His largest holding, representing 8.3 percent of the 1.6 billion-pound ($2.7 billion) fund, is AstraZeneca Plc (AZN), the drugmaker that rejected Pfizer Inc.’s bid in May, a decision that was publicly backed by Woodford. Competitors GlaxoSmithKline Plc (GSK) and Roche Holding AG (ROG), as well as British American Tobacco Plc (BATS) and Imperial Tobacco Group Plc (IMT) are among the money manager’s top 10 holdings.
“My cautious view on the global economy hasn’t changed,” Woodford, the former head of U.K. equities at Invesco Perpetual, said in a statement. “I have been very careful in building a portfolio that avoids sectors that are vulnerable to a faltering global economy.”
Woodford was one of the biggest investors in British stocks at Invesco, where news of his planned departure from the firm wiped almost $1 billion off the parent company’s market value last year. He opened the CF Woodford Equity Income Fund last month as equities from the U.S. to Europe trade at their most expensive since 2009 and central banks discuss the prospect of raising interest rates.
The new fund is Woodford’s first since starting Woodford Investment Management LLP this year. He also manages three funds, with more than 3.7 billion pounds in assets, for St. James’s Place Plc (STJ) that he looked after at Invesco.
Britain’s BT Group Plc (BT/A), the U.K.’s largest phone company, Rolls-Royce Holdings Plc (RR/), Capita Plc (CPI) and Imperial Innovations Group Plc (IVO) are also among Woodford’s biggest holdings. Reynolds American Inc. (RAI), the maker of Camel cigarettes, is the only U.S. company to make the top 10.
Nine of the companies also made up Woodford’s top 10 positions when he managed the Invesco Perpetual High Income fund, according to measurement service TrustNet Ltd. BAE Systems Plc (BA/) didn’t make the list, though Woodford is scheduled to disclose his entire holdings each month starting July 14.
Woodford has outperformed his peer group in eight out of a possible 10 years, TrustNet said. The Invesco fund, which had almost 14 billion pounds in assets before Woodford left the firm, had an 11.47 percent annualized return over a five-year period, according to company filings. That fund is now run by Mark Barnett, Invesco’s new head of U.K. equities and has about 13.2 billion pounds in assets.
Top 10 Holdings % of Portfolio AstraZeneca 8.3% GlaxoSmithKline 7.11% BAT 6.2% BT 6.02% Imperial Tobacco 5.31% Roche 3.9% Imperial Innovations 3.6% Reynolds American 3.55% Rolls-Royce 3.47% Capita 3.36%
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