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.
Full disclosure: What do advisers think?
The move by Neil Woodford to disclose his full portfolio holdings certainly flows with the zeitgeist of greater transparency. With the post-RDR environment bringing fees into the light, advisers will likely demand further openness.
James Robson, independent financial planner at Plutus Wealth, said the move was “great for transparency” and was “quite a clever move to keep the momentum going for the new launch”.
“It is not especially useful to us though as we have enough fund feed information through companies such as FE and Morningstar, which allow us to gather all the information we need,” he said.
“However, I can see the appeal to individual investors; those that fund or stock pick from information they gather themselves though.”
Mr Robson added it was “probably inevitable” others would follow suit given the “herd mentality” in financial services.
Chris Budd, managing director at Ovation, agreed it was a good thing and “something all funds should do”.
But Kim Barrett, managing director of Barretts Financial Solutions, said standard fund factsheets were comprehensive enough and that if more information was required, fund groups usually responded to requests.
“In many senses, this is yet more hype surrounding Neil Woodford,” he said.
Key holdings in Neil Woodford’s new fund
Gigaclear
The Oxforshire-based community broadband company is Mr Woodford’s only unquoted holding in his portfolio and represents a 0.29 per cent weighting.
The company was founded by chief executive Matthew Hare in 2011, the same year it received permissions from Ofcom to provide internet services.
Since launch, the company’s website states it has created fibre optic internet service for rural communities Appleton, Eaton, and Besselsleigh in Oxfordshire, and in 2013 it completed fibre optic networks in Uppingham in Rutland, Erbistock in Wales and two more Oxfordshire villages.
The company has more fibre networks under construction in Oxfordshire and Kent and has announced plans to build in Northamptonshire and Peterborough.
Next
The high street retailer might seem like a counterintuitive move for the fund manager given he has a cautious view on the economy and expects the next three to five years to be more difficult in terms of returns.
He had owned the stock some 15 years ago and admitted he had “missed a couple of opportunities to buy into it previously”. But the manager said Next had a strong share buyback policy, had weathered difficult economic conditions and also had a strong online presence.
The stock has comfortably beaten the wider FTSE 100 index across one, three, five and 10 years, according to FE Analytics.
Next has paid out dividends to investors since January 2000 without any gaps, according to its website. It has even paid out two special dividends this year.
Allied Minds
The US-based IP commercialisation company Allied Minds has been a favourite of Mr Woodford for some time and featured in his portfolios at Invesco Perpetual. When he held it at the Henley-based fund manager though, it was an unquoted stock.
Allied Minds listed on the stockmarket just last month and raised £76m. Mr Woodford took part in the share placing in a serious way, with the company representing more than 2.9 per cent of the portfolio – the 11th largest holding.
Alongside IP Group and Imperial Innovations, Mr Woodford has more than 7 per cent in IP commercialisation.
An Allied Minds spokesperson said Invesco also took further interest in the firm when its shares listed and stated that just under 43 per cent of the firm’s market cap was held by Invesco funds at the time of the initial public offering.
AA
Perhaps another slightly unusual play is motoring company AA, which Mr Woodford supported at its recent initial public offering (IPO).
The manager said the roadside assistance firm was “unbelievably cash generative” with a “huge brand recognition and a strong subscription model”. It had been mooted Mr Woodford would support the group’s IPO before the shares were listed.
“It is quite highly indebted, but the new management team has paid down its most expensive debt using some of the money raised in the float and it looks well placed to deliver steady long-term growth,” Mr Woodford said.
The firm is Mr Woodford’s 18th largest holding and, with other parts of its business such as insurance, fits well with the manager’s other financials holdings.
