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Woodford reveals every single stock in his new fund

Star fund manager Neil Woodford takes the unusual step of disclosing all the holdings of his new £1.6 billion equity income fund.

 
Woodford reveals every single stock in his new fund

Star fund manager Neil Woodford has disclosed all the holdings of his new £1.6 billion CF Woodford Equity Income fund, revealing a heavy weighting to health care stocks and a substantial investment in early-stage businesses.

Woodford’s disclosure of all the stocks held by his fund, the first to be launched from his new investment company Woodford Investment Management, is an unusual move. Funds normally disclose only their top 10 holdings.

The fund’s biggest allocation is to health care stocks, making up 31.8% of the fund, much more than the 8.5% weighting to health care by its benchmark, the FTSE All-Share index. Woodford is also ‘overweight’ – holding more than the benchmark – in consumer goods stocks and industrials, with 20% and 14.4% weightings versus 14.1% and 10% respectively by the FTSE All-Share.

Much of the consumer goods holding is made up of tobacco stocks, perennial favourites of Woodford’s due to their defensive qualities. British American Tobacco (BATS), Imperial Tobacco (IMT) and Reynolds American (RAI.N) feature in the fund’s top 10, while Philip Morris International (PM.N) at 1.8% of the fund, and Altria (MO.N) at 1.3% are significant positions.

Shunning oil and gas

Woodford has almost completely shunned oil and gas stocks. While they make up 15.6% of the All-Share, Woodford holds just one stock from the sector – Alternative Investment Market (AIM)-listed Velocys (VLSV), which converts gas into liquid fuels – making up 0.6% of the fund. Basic materials also barely figure, with Revolymer (REVO) – another AIM share which manufactures non-stick chewing gum and is more of a technology stock – the only holding in the sector. It makes up 0.3% of the fund, versus the benchmark’s 7.8% weighting to basic materials.

The portfolio also shows Woodford’s scepticism about the financial services sector. The headline figures show a 17% weighting to financials versus 24% from the benchmark. However, over 6.5% of this weighting is accounted for by Imperial Innovations (IVO) and Allied Minds (ALML), companies which focus on commercialising technology research from universities, and so could equally be considered technology stocks. Woodford’s longstanding aversion to banks is shown by the presence of only one – HSBC (HSBA) – in his portfolio.

Consumer services stocks are a more modest underweight, at 3.6% of the fund versus the benchmark’s 10.5%, while utilities and telecommunications companies are small overweights, at 4.9% and 6.3% of the fund, versus the benchmark’s 3.8% and 4.3%.

Early-stage investments

While the portfolio contains a number of blue-chip, household names, there are also a large number of lesser-known, early-stage businesses. ‘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,’ said Woodford.

AIM-listed Imperial Innovations makes it into the top 10, and there are a plethora of other AIM stocks making up the fund. They include:

  • RM2 International (RM2), which manufactures high-strength pallets
  • Vehicle hire group Redde (REDD)
  • Energy consultancy Utilitywise (UTW)
  • Drug development group e-Therapeutics (ETXP)
  • Burford Capital (BURF), which provides finance services for litigation
  • Biotechnology firm Benchmark Holdings (BMKB)
  • Oxford Pharmascience (OXP), which redevelops approved drugs to make them safer, and fellow pharmaceutical stock 4D Pharma (DDDD)
  • Xeros (XSG), which manufactures waterless washing machines
  • Clinical research provider Retroscreen Virology (RVG)
  • Netscientific (NSCI), which commercialises health care technologies from universities

The full portfolio

Name Industry % (Weight)
AstraZeneca Health Care 8.3
GlaxoSmithKline Health Care 7.11
British American Tobacco Consumer Goods 6.2
BT Telecommunications 6.02
Imperial Tobacco Consumer Goods 5.31
Roche Health Care 3.9
Imperial Innovations Financials 3.6
Reynolds American Consumer Goods 3.55
Rolls-Royce Industrials 3.47
Capita Industrials 3.36
Allied Minds Financials 2.93
BAe Systems Industrials 2.91
HSBC Financials 2.79
Sanofi Health Care 2.34
Legal & General Financials 2.09
Novartis Health Care 2.01
Centrica Utilities 1.98
AA Consumer Services 1.87
SSE Utilities 1.85
Reckitt Benckiser Consumer Goods 1.83
Philip Morris International Consumer Goods 1.81
Prothena Health Care 1.72
Next Consumer Services 1.68
Altria Consumer Goods 1.3
Smith & Nephew Health Care 1.27
BTG Health Care 1.22
Provident Financial Financials 1.13
Drax Utilities 1.11
Alkermes Health Care 1.04
Gagfah Financials 1.02
G4S Industrials 0.97
RM2 International Industrials 0.93
Redde Financials 0.9
Utilitywise Industrials 0.62
Serco Industrials 0.59
Meggitt Industrials 0.59
Lancashire Financials 0.58
Velocys Oil & Gas 0.55
e-Therapeutics Health Care 0.54
Vernalis Health Care 0.49
ReNeuron Health Care 0.48
Cobham Industrials 0.48
Burford Capital Financials 0.44
Catlin Financials 0.43
Benchmark Health Care 0.43
Amlin Financials 0.43
4D Pharma Health Care 0.43
Oxford Pharmascience Health Care 0.35
Revolymer Basic Materials 0.31
Hiscox Financials 0.31
Beazley Financials 0.29
Gigaclear Telecommunications 0.29
Paypoint Industrials 0.25
Homeserve Industrials 0.09
Retroscreen Virology Health Care 0.09
Xeros Industrials 0.07
NetScientific Health Care 0.05
IP Financials 0.04
Circassia Health Care 0.03
Stobart Industrials 0.03
Cranswick Consumer Goods 0.01

18 comments so far. Why not have your say?

Chander Hingorani

Jul 14, 2014 at 16:07

We all have little bit of Woodford in us. I have holdings in six of his portfolio. I am glad I am doing something right.

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patchy

Jul 14, 2014 at 16:20

More fund managers should be confident enough to publish their entire portfolios. It can only be a good thing.

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richard tomkin

Jul 14, 2014 at 16:58

With stocks like these it is a good thing he's at Edinburgh Investment Trust no more.

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peter hart

Jul 14, 2014 at 17:24

Health care and tobacco. Kill or cure. I see the logic.

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Tony Peterson

Jul 14, 2014 at 17:40

I hold six of these too. Funnily enough, four of them are on my profit-slicing list. And two on my add-to list.

I wonder how wise he is to stay steering clear of Vodafone. BT has been our best performing major holding of all time, but I am inclined to switch some of the gains into Vodafone.

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TJL

Jul 14, 2014 at 19:02

While not currently invested with NW (but having previously been invested for many years) I think he is a hero for the upfront, open approach he is taking.

It is a unique breath of fresh air, and whether it is his intention or not, his attitude may bring about some major, investor friendly changes in the industry.

It could be just a very shrewd marketing move (who better to understand the market and plan such a thing), but I think not. I think he will go from strength to strength (but if I was in his position I would have retired and bought a bigger yacht).

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Jonathan

Jul 14, 2014 at 19:31

He might be thinking he'll have so many people copying publicising his holding will be a self fulfilling prophecy. People will buy the same holdings so the price will go up. A bit like when the Daily Mirror gave share tips but the tipsters were buying the shares the day before the Mirror published them then dumping them a few days later when the prices had gone up due to everyone buying them.

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Jonathan

Jul 14, 2014 at 19:32

He might be thinking he'll have so many people copying publicising his holding will be a self fulfilling prophecy. People will buy the same holdings so the price will go up. A bit like when the Daily Mirror gave share tips but the tipsters were buying the shares the day before the Mirror published them then dumping them a few days later when the prices had gone up due to everyone buying them.

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spike

Jul 14, 2014 at 20:22

spot on Jonathan! He's saying to the public at large....these are my recommendations, you know I am always right, go out and buy!! (who needs the Investors Chronicle, lol.)

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Lardarz

Jul 14, 2014 at 21:10

I only own 8 stocks outside of funds, and am quite reassured that 5 of them are on this list. Interesting that AZN and GSK are on the list, but not Shire though

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richard hickman

Jul 15, 2014 at 21:16

A lesson for those that want to better an index.... The top 10 will be a core that follows a benchmark, the others have a 1 in 30 chance of doing extraordinarily well, and a 1 in 100 chance of going belly-up

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Len Dowsett

Jul 16, 2014 at 11:41

I am astonished how much he has invested in tobacco shares as I no longer regard them as the safe haven that they were, and he seems to think they are still.

I would hesitate buying into his portfolio as seems unbalanced.

I started share buying in 1952 & Oct 96 I bought 754 Imperial Tobacco for £754 . In 2010 I sold some to buy Bats to spread risk, but May 2014 decided to get rid of ALL my Bats- profit £10,000.

My remaing Imps also held in an ISA show profit of £19000.making £29,000 gain on original £754 - but I am watching whether they are " played out" long term. Once market seems surer than at moment I will probably dump half my Imps.

Len D

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jackd via mobile

Jul 19, 2014 at 10:20

But wouldn't you reveal all if you wanted your stocks to rise?

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LEICESTER VESTOR

Nov 28, 2014 at 08:16

Hip Hip Hooray 3 cheers for Neil Woodford for being a pioneer to set a new

trend in fund managemnt . As for as I can remember its the first time a fund

manager has made public 100 % of his portfolio and showing his commitment

& confidendce and throwing himself wide open to criticism by friends and

foes .

I had so much trust in this fund manager that I decided

to commit nearly 20 % of my portfolio to his new fund C F WOODFORD

EQUITY INC. from the day 1 and my conviction has been proved right so far.

My thanks also go to shall I say my good friends , Tony Peterson and JEL G

who managed to persuade me venture back to direct equity investments

rather than just funds and am glad to say that I now hold not just funds but

also AIM's and mainstream equities plus investment trusts . I hav'nt ventured

into the ETF's & CFD's till now as this will need further extensive research.

Current portfolio split is 70 % funds and 30 % direct

equities . I am still enjoying my time in the Far East but try to keep in touch

with the UK financial world through various message boards and sites .

I do hope more fund managers follow Neil's footsteps

and start revealing their portfolios 100 % so that we their fund payers can

question their judgements and perceptions regarding selections . Some

readers think its a clever ploy by the fund manager to give their fund's

holdings a temporary uplift but I personally don't think that a manager like Neil

need that kind of gimmick to enhance his popularity . His reputation is well

established and it needs a brave manager to follow his actions and throw

himself wide open to the wolves .

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LEICESTER VESTOR

Nov 28, 2014 at 16:05

Bye the way any comments on the new investment trust RMMC which has

recently raised appx. 53 million on its first offering and will come on LSE

live market on 2nd of Dec 2014 . It is the type of fund I've been looking for

though I already hold marlborough multi cap , marlborough micro cap. and neil's

cf woodford equity income funds in my mixed portfolio.

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Aran

Nov 30, 2014 at 00:01

I hold three from the list, all showing losses. IP group, xeros..As soon as they recover , I will move funds into JQW,Toumaz,Ixico, Arria NLG and Ilika. I am sure these undervalued stocks are ready for take off.

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Aran

Nov 30, 2014 at 00:03

Manx Financial and Manx Telecom are worth looking at.

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Tony Peterson

Dec 03, 2014 at 12:21

Thanks, LV, for your kind words.

I repeat that I think that equities are the only game in town, and until you've notched up your first million you should stick to large companies providing essential services and paying good dividends. With most, but not all, of our dividends reinvested my wife and I have notched up a 40% increase in just such a portfolio in the past 23 months. We're happy with that.

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