Neil Woodford’s Cautious Stance Make Glaxo, BAT Top 10 Holdings

Jul 07, 2014 8:05 am ET

July 7 (Bloomberg) -- Neil Woodford has stuck to buying Britain’s largest drugmakers and cigarette makers for his new equity income fund, industries considered resilient from economic downturns.

His largest holding, worth 8.3 percent of the 1.6 billion- pound ($2.7 billion) fund, is AstraZeneca Plc, the drugmaker that rejected Pfizer Inc.’s bid in May, a decision that was publicly backed by Woodford. Competitors GlaxoSmithKline Plc and Roche Holding AG, as well as British American Tobacco Plc and Imperial Tobacco Group Plc are among the money manager’s top 10 holdings.

“My cautious view on the global economy hasn’t changed,” Woodford, the former head of U.K. equities at Invesco Perpetual, said in a statement. “I have been very careful in building a portfolio that avoids sectors that are vulnerable to a faltering global economy.”

Woodford was one of the biggest investors in British stocks at Invesco, where news of his planned departure from the firm wiped almost $1 billion off the parent company’s market value last year. He opened the CF Woodford Equity Income Fund last month as equities from the U.S. to Europe trade at their most expensive since 2009 and central banks discuss the prospect of raising interest rates.

The new fund is Woodford’s first product since starting Woodford Investment Management LLP this year. He also manages three funds, with more than 3.7 billion pounds in assets, for St. James’s Place Plc that he looked after at Invesco.

Britain’s BT Group Plc, the U.K.’s largest phone company, Rolls-Royce Holdings Plc, Capita Plc and Imperial Innovations Group Plc are also among Woodford’s biggest holdings. Reynolds American Inc., the maker of Camel cigarettes, is the only U.S. company to make the top 10.

Top 10 Holdings             % of Portfolio

AstraZeneca                      8.3%
GlaxoSmithKline                 7.11%
BAT                              6.2%
BT                              6.02%
Imperial Tobacco                5.31%
Roche                            3.9%
Imperial Innovations             3.6%
Reynolds American               3.55%
Rolls-Royce                     3.47%
Capita                          3.36%

--With assistance from Srinivasan Sivabalan in London.