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.
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.
Invesco Perpetual Income Fund top ten holdings
| Name of holding | % of assets |
|---|---|
| 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 |