Woodford fund favours health and tobacco

The flagship fund from manager Neil Woodford’s new asset management company has revealed its top ten holdings, which displays a bias to pharmaceuticals and tobacco stocks.

The top stock of the CF Woodford Equity Income Fund, a UK equity fund, is AstraZeneca, followed by GlaxoSmithKline and British American Tobacco. The top ten also includes holdings in BT and Rolls Royce.

“I have been very careful in building a portfolio that avoids sectors that I believe are vulnerable to a faltering global economy,” says Woodford, who adds that stocks in the tobacco and pharmaceuticals sectors are resilient to falling demand.

Woodford’s pessimistic view of global growth flows from his opinion that liquidity flows which have supported asset prices since the financial crisis are going into reverse, which will cause problems for global markets in the next few years.

Woodford Investment Management has previously said it will disclose its entire portfolio in a commitment to transparency aimed at differentiating the fund from rivals, which typically only reveal the top ten holdings. The firm says it will reveal the full portfolio on July 14 and a spokesperson said she could not disclose any holdings apart from the top 10 until then.

Among Woodford’s innovations with the product is the decision to absorb all fund expenses into the annual management charge, which has pleased many advisers. The fund is available to retail investors for as little as 65 basis points on some platforms, though many of these same platforms will charge their own fee on top.

©2014 funds europe

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