Which Stocks Will Woodford Buy?

Neil Woodford will launch his Woodford Equity Income fund in one week - which stocks should investors expect to see in his new offering?

Emma Wall 12 June, 2014 | 4:02PM
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Which stocks will Neil Woodford choose for his new equity income fund? The man himself has admitted the Woodford Equity Income fund will look very similar to his previous products.

“Woodford Funds as a company will be a very different offering – but expect business as usual when it comes to stock selection and the running of the new income fund,” he said last month.

While he gave up his Invesco Perpetual funds eight weeks earlier than planned in March, there is one mandate the City stalwart has been quietly managing in the background for more than a decade.

The St James’s Place UK High Income fund has been managed by Neil Woodford since 2001, and is a good indicator of how the star manager may choose to run his new fund. It was with this fund that Woodford chose to dip a toe back into the banking sector with HSBC (HSBA) – after a decade long hiatus.

So using the St James’s Place mandate as a blueprint, which stocks can investors expect in the new Woodford Equity Income fund?

AstraZeneca (AZN)

Weighting: 9.23%

AstraZeneca sells branded pharmaceutical products across several major therapeutic classes, including gastrointestinal, cardiovascular, respiratory, cancer, immunology, neuroscience, and infectious disease.

GlaxoSmithKline (GSK)

Weighting: 9.06%

In the pharmaceutical industry, GlaxoSmithKline ranks as one of the largest companies by market capitalisation.

BT Group (BT.A)

Weighting: 6.93%

BT Group, formerly known as British Telecom, is the incumbent phone operator and largest supplier of fixed-line phone services in Britain with about 42% market share.

British American Tobacco (BATS)

Weighting: 6.75%

British American sells tobacco products in 180 countries and holds leadership positions in around 50 of its markets. 

Imperial Tobacco Group (IMT)

Weighting: 5.81%

Imperial Tobacco is the world's fourth-largest international tobacco company with total 2013 volume of 317 billion cigarettes sold in more than 160 countries. 

BAE Systems (BA.)

Weighting: 4.9%

BAE Systems is the United Kingdom's largest defense contractor, with 2013 revenue of £18 billion.

Capita (CPI)

Weighting: 4.6%

Capita provides business process outsourcing services to local and central government entities and agencies in the United Kingdom.

Reckitt Benckiser Group (RB.)

Weighting: 4.43%

European firms Reckitt & Coleman and Benckiser combined in 1999 to form Reckitt Benckiser. The firm's products include a variety of household product and personal-care brands.

Rolls Royce Holdings (RR.)

Weighting: 4.06%

Rolls-Royce is one of the world's leading suppliers of jet engines to civil, defense, marine, and energy applications.

Centrica (CNA)

Weighting: 3.8%

Centrica PLC is a vertically integrated utility based in the U.K. with operations that produce and supply natural gas and electricity.

 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Emma Wall  is former Senior International Editor for Morningstar