Woodford Boosts Returns with Dollar Hedge

Neil Woodford has boosted returns for investors in his Woodford Equity Income fund by hedging the dollar - calling the bottom of the pound's slump at $1.21

Emma Wall 30 March, 2017 | 9:31AM
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Star UK equity income fund manager Neil Woodford has bet against the dollar, calling the bottom of the sterling slump. Woodford, as with many other fund managers invested in large UK companies, benefitted from the fall in sterling last year, which boosted the revenues of his internationally-focused holdings.

On June 23, £1 was worth $1.49, but following the Brexit vote, the pound fell as low as $1.20 on January 16 this year. Today it is worth $1.24. Woodford hedged his portfolio to benefit from the eventual rise in sterling in mid-October when the pound was worth $1.21.

The Falling Pound and the Rising Market

A week before the Brexit vote, the FTSE 100 sat at 5,924. The stock market hates uncertainty, and Project Fear was doing its very best to convince voters that should they opt to leave the European Union there would be disastrous consequences for the UK economy and businesses.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
British American Tobacco PLC2,580.00 GBP0.00Rating
Diageo PLC3,606.50 GBP0.00Rating
Jupiter Income Trust L Inc481.60 GBP0.02Rating
LF Equity Income A Sterling Acc3.40 GBP0.00
Standard Chartered PLC494.30 GBP0.00Rating
Unilever PLC3,787.00 GBP0.00Rating

About Author

Emma Wall  is former Senior International Editor for Morningstar