3 Global Stocks in Woodford's New Income Fund

Neil Woodford this week revealed the full portfolio of his new Income Focus fund - including three stocks listed outside of the UK

Emma Wall 18 May, 2017 | 3:07PM
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Neil Woodford has revealed the full portfolio of his newly launched Woodford Income Focus fund. The open-end fund is invested in 50 companies, with a predominantly UK focus. The largest sector representation is financials with 19 companies, followed by 10 industrial stocks, and six consumer goods companies. The largest holding in the portfolio is AstraZeneca (AZN) at 7.4%, followed by Legal & General (LGEN) at 6.6% and Imperial Brands (IMB) at 4.9%.

This mirrors the Woodford Equity Income fund with 8% in Astra, 7.3% in Imperial and 5.6% in Legal & General.

“I have recently said that I believed there was an attractive domestic opportunity, in part because people were too downbeat about the UK economy. The new portfolio is a manifestation of this view but in a more income-focused way,” said Woodford.

“The bearish mood has resulted in very big share price falls in some domestic cyclical sectors and it is this opportunity set that I see in the stock market right here, right now. I have been taking advantage of some of the depressed valuations in domestic cyclicals, selectively buying stocks in sectors such as housebuilders, banks, construction, building materials and property for the new fund.”

Despite Woodford’s bullish stance on the domestic market, there were a few international names revealed in the new fund – as the manager alluded to at launch.

As Morningstar reported in February the portfolio will remain predominantly domestically focused but Woodford does not want to be constrained by the Investment Association UK Equity Income sector requirement to have global stocks make up less than 20% of the total portfolio, and as a result the fund will sit in the Specialist Sector.

"I am not a global equity fund manager," he said at the time. "This is not a global fund. Being a global fund manager requires a different skill set, one I would not want to embrace."

The latest holdings data reveals three companies listed outside of the UK.

LEG Immobilien AG (LEG)

LEG Immobilien AG is an integrated real estate company listed in Germany. The Company is engaged in management and development of its residential property portfolio and the expansion of the portfolio through acquisitions with synergy potential.

The stock makes up 1.27% of Woodford’s portfolio at April 30, 2017.

AbbVie (ABBV)

AbbVie is a US pharmaceutical company with a strong exposure to immunology and oncology. The company's top drug, Humira, represents over half of the firm's current profits. The company was spun off from Abbott in early 2013. Despite the high dependence on one key drug, AbbVie holds a strong balance and should produce robust cash flows over the next several years.

The stock makes up 3.6% of Woodford’ s portfolio.

Gilead Sciences (GILD)

US firm Gilead Sciences develops and markets therapies to treat life-threatening infectious diseases, with the core of its portfolio focused on HIV and hepatitis B and C. The acquisitions of Corus Pharma, Myogen, CV Therapeutics, Arresto Biosciences, and Calistoga have broadened this focus to include pulmonary and cardiovascular diseases and cancer. Gilead's acquisition of Pharmasset brought rights to hepatitis C drug Sovaldi, which is also part of the recently approved combination regimen Harvoni.

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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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
AbbVie Inc170.39 USD-1.01Rating
Gilead Sciences Inc70.67 USD3.18Rating
LEG Immobilien SE75.12 EUR1.46
LF abrdn Income Focus A Sterling Acc  
LF Equity Income A Sterling Acc0.97 GBP0.00

About Author

Emma Wall  is former Senior International Editor for Morningstar

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