In the world of fund management, only a few individuals have earned the industry's widespread respect. Anthony Bolton is one and Neil Woodford is another. When The Guardian asked Britain's top investment advisers to name their favourite funds, one name kept cropping up: Woodford.
Woodford manages two funds, Invesco Perpetual Income and Invesco Perpetual High Income, and "more small investors are in these funds than any other in Britain", says Patrick Collinson in The Guardian.
The bear market was kind to Woodford his funds fell 19% in 2008 against a FTSE 100 fall of 31%. But last year both funds lagged the market recovery, rising around 11% compared to a 22% gain in the FTSE. And his defensive holdings in Invesco Perpetual Income such as AstraZenca, British American Tobacco and Tesco trailed behind the recovery stocks.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
But investors should buy the fund anyway. "He hugely underperformed last year," says Darius McDermott, managing director of Chelsea Financial Services, in The Guardian. "But I don't care. I've owned that fund for a decade and had a return of 104%."
Woodford is now focusing on tobacco, pharmaceuticals, utilities, telecoms and aerospace and defence. There's "excellent value" in these areas, he says. The firms he has been buying "have the potential to deliver resilient growth," which isn't reflected in the current share prices.
The Invesco Perpetual Income Fund aims to deliver a reasonable level of income alongside capital growth. The minimum investment is £500 and the annual management fee is 1.5%.
Contact: 0800-085 8677.
table.ben-table table { border: 3px solid #2b1083;font: 0.928em/1.23em verdana, arial, sans-serif;}
th { background: #2b1083; padding: 10px 5px;color: white;font-weight: bold;text-align: center;border-left: 1px solid #a6a6c9;}th.first { border-left: 0; padding: 5px 2px;text-align: left;}
tr {background: #fff;}
tr.alt {background: #f6f5f9; }
td { padding: 5px 2px;text-align: center;border-left: 1px solid #a6a6c9;color: #000;vertical-align: center;}td.alt { background-color: #f6f5f9; }td.bold { font-weight: bold; }td.first { border-left: 0; text-align: left;}
InvescoPerpetual Income Fund top ten holdings
| AstraZeneca | 8.4 |
| GlaxoSmithKline | 7.5 |
| BG | 5.6 |
| Reynolds American | 5.5 |
| British American Tobacco | 4.9 |
| Vodafone | 4.9 |
| Tesco | 4.6 |
| Imperial Tobacco | 4.2 |
| National Grid | 4.2 |
| BT | 3.8 |
-
Dividends: Reliability in uncertain timesDividends have formed over half of the total return of the UK market over the last 20 years. Dividend strategies have been under-appreciated while investors have focused on US mega cap technology. Income strategies may have more appeal in a tougher investment climate
-
Trump’s tariffs: what is he thinking and how should UK respond?Every right-thinking person knows that free trade is a surer route to the wealth of nations than protectionism, says Stuart Watkins. What is Trump thinking?
