Neil Woodford has revealed the full list of holdings in his newly launched £645m Income Focus fund, which has a higher overlap with his £10bn Equity Income fund than previously expected.
Launched in April, the Income Focus fund does not have a yield target but aims to deliver an income of 5% per share in its first full calendar year in 2018. It also sits in the IA Specialist sector, does not have any geographical constraints and will not hold unquoted stocks, unlike Woodford's Equity Income offering.
According to the latest breakdown, the new Income Focus fund has a more concentrated portfolio of 50 holdings, compared to 131 for the Equity Income fund.
A total of 32 holdings in Income Focus also feature in the existing fund, although Woodford previously expected the overlap to be 15-20 names at launch.
AstraZeneca is the largest holding in both funds, at 7.39% of the Income Focus portfolio and 8.06% in Equity Income. Legal and General, Imperial Brands, Provident Financial and AbbVie are also in both top tens.
In particular, Woodford said he has taken advantage of "depressed valuations in domestic cyclicals" by selectively buying stocks in sectors such as house builders, banks, construction, building materials and property for the new fund.
Notably, Lloyds is the sixth largest holding in Income Focus and the eleventh biggest in Equity Income. This is Woodford's first banking position, aside from a brief holding in HSBC in 2014, since 2003.
Talking about his stock selection, the manager said: "In the run up to the launch of the Income Focus fund I said I believed there was an attractive domestic opportunity, in part because people were too downbeat about the UK economy.
"The new portfolio is a manifestation of this view but in a more income-focused way. The bearish mood has resulted in very big share price falls in some domestic cyclical sectors and it is this opportunity set that I see in the stock market right here, right now.
"There are also some familiar names in the portfolio, which is in great shape and I am extremely confident it will deliver the income target we set when we launched the fund in March," he said.
Mark Dampier, head of research at Hargreaves Lansdown, commented: "The list of holdings in the new fund is much shorter than in the Woodford Equity Income fund, which has a long tail of smaller growth companies.
"However both funds demonstrate a high conviction approach to investing, with punchy positions in the biggest stocks in the portfolio.
"Our initial feeling is that the Neil and his team have certainly grasped the bull by the horns and are backing their convictions."
Woodford IM has published the entire portfolio of stocks, as it does with its Equity Income and £764m Woodford Patient Capital trust, in a bid to provide greater transparancy for investors. These are updated on a monthly basis.
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