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Woodford reveals every single stock in his new fund

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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

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Neil Woodford
Neil Woodford
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