Peering into Woodford’s portfolio

Neil Woodford says he has achieved his goal of creating a portfolio similar to the ones he ran at Invesco Perpetual, but analysis of the full holdings does show some interesting variations.

The manager will publish the full holdings of his portfolio and the weightings of those companies in his fund on a monthly basis, in a move that goes a step further than rival fund groups.

Many groups only publish a list of top 10 holdings and include a full breakdown in an annual report instead of continuous full disclosure. Multi-manager funds usually outline their full holdings but few accompany this with weightings.

Delving into the portfolio shows Mr Woodford has just one unquoted stock, which is Oxfordshire-based Gigaclear. The company provides super-fast broadband to rural communities and has been running since 2011.

The UK’s appetite for faster internet speed is definitely growing – just last month prime minister David Cameron was bemoaning his break in Cornwall, which he had to cut short because of a lack of internet. In the long term, perhaps Gigaclear will be a key factor in helping the development of faster broadband nationwide.

In terms of sectors, the fund has 18 healthcare positions ranging from large companies AstraZeneca, GlaxoSmithKline and Roche through to micro-cap stock Oxford Pharmascience, a drug development company. It was established by a team of entrepreneurs in 2008 and is a publicly listed company on London’s Alternative Investment Market. The company has what it calls ‘out-licensing agreements’ with pharmaceutical companies worldwide, including Bayer.

The second most prominent sector is financials with 14 such companies featuring in the fund. Perhaps the most interesting holding is HSBC, seeing as the manager has not held a UK bank for near on a decade.

Mr Woodford said he was bullish on BT, which is the only telecom stock alongside Gigaclear. However, Mr Woodford said he did not favour mobile company Vodafone.

“Vodafone has fallen a long way now, so perhaps it is about time I had another look at the valuation but the fundamentals don’t appeal to me,” he said. The stock has fallen nearly 35 per cent from 294.6p in February to 192.1p last week.

The manager has also stuck with investing in early-stage companies, with seven of his holdings being below the £100m market-cap level, excluding the unlisted Gigaclear.

Mr Woodford said on a webcast posted last week he also had some “interesting stock ideas”, which he was factoring into his thinking.

He has used his full 20 per cent allowance of overseas stocks, with key holdings being Switzerland-based Roche and US-domiciled Allied Minds.

Mr Woodford added that the portfolio’s weighting in tobacco was “slightly larger” than he had modelled in his head, while the pharmaceutical weighting was “slightly below” the level he had previously envisaged.

Three utilities stocks feature – Centrica, SSE and Drax – but Mr Woodford said he was not bullish on the utilities sector as a whole and particularly disliked regulated utilities.