Fund of the week: Should you follow Woodford?

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Star fund manager Neil Woodford hasrevealed all 61 stocks in his new CFWoodford Equity Income Fund. Manyare long-term Woodford favourites, butthere are a few surprises too (you can seethe full top ten below).

The fund issimilar to the two income funds Woodfordran at Invesco Perpetual. As before, he isinvesting heavily in pharmaceutical andtobacco stocks. He likes these becausethey deliver reliable, growing cash flows.

The one surprise in the top ten' is Imperial Innovations, which commercialises technologies developed at British universitylabs. Many income funds wouldn't invest in a company likethis, as it pays no dividend. But it's clearly a favourite theme ofWoodford's outside the top ten, he has invested in several othertechnology stocks. In 11th place you'll find Allied Minds (LSE:ALM), which commercialises innovations from US universities.

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There are several biotechs too, including E-Therapeutics (LSE:ETX), Vernalis (LSE: VER) and Reneuron (LSE: RENE). None paysa dividend. Yet Woodford still expects the fund to pay a 4% yield.Should you invest?

Woodford has an outstanding long-termrecord. If you had put £1,000 in his Invesco Perpetual HighIncome Fund in 1988, it would have been worth just under£25,000 when he gave up the fund earlier this year.

He's arguablythe most successful working fund manager in the UK. But inrecent years, his performance hasn't been so strong. Accordingto Citywire, he's the 19th best-performing equity incomemanager over the last three years, of a field of 73 decent, butnot amazing. And the man who has taken over Woodford's oldfunds at Invesco Perpetual, Mark Barnett, comes fifth in that list.

Charges are pretty much as you'd expect on most investmentplatforms, you'll pay a 0.75% annual management charge,although it's 0.6% via Hargreaves Lansdown.

But if your priorityis low charges, you would do better with the Vanguard FTSE UKEquity Income Index Fund. This passive fund, which tracks anequity income index, has an annual charge of just 0.25%.