Fund Managers Back Tobacco Stocks

Woodford, Fidelity and Invesco all have tobacco stocks in their top 10 holdings. Will the threat of a windfall tax if Labour win the next election change this?

Emma Wall 24 September, 2014 | 3:16PM
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Tobacco stocks will be hit with a £150 million windfall tax to fund the NHS if Labour wins the next election.

When the medical profession first revealed the damage cigarettes do to users' health, it was predicted that the world would stub out on mass.  But fast forward two decades later global revenue streams have grown in that time, as emerging market consumers adopt the 'Western' pastime.

The latest challenge to the tobacco industry - electronic cigarettes - is actually proving to be another opportunity for profit.  British American Tobacco rolled out its new Vype e-cig in the United Kingdom last year - the first kind of product diversification in almost a century.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Altria Group Inc48.70 USD0.00Rating
Fidelity MoneyBuilder Dividend234.80 GBP-0.04Rating
Imperial Brands PLC1,570.50 GBP0.00Rating
Invesco UK Eq High Inc UK Inc324.78 GBP0.63Rating
Philip Morris International Inc98.37 USD0.00Rating
Threadneedle UK Equity Alpha Inc Rtl Inc0.66 GBP-0.18Rating

About Author

Emma Wall  is former Senior International Editor for Morningstar