Fund managers come and go, but if you are looking for someone who is in it for the long term, you could do worse than back Neil Woodford. This month his Invesco Perpetual High Income Fund celebrates its 25th birthday.
Woodford has been at the helm for all but eight months of those years and generated impressive returns: £1,000 invested at launch would now be worth £7,155, plus £3,616 would have been paid in income, says Mark Dampier on Fundweb.co.uk. According to Trustnet, the fund has delivered a return of 40.9% over three years and 13.3% over one year.
Woodford has enjoyed success with his long-term and often contrarian approach, notably buying into the tobacco sector in the 1990s when firms were facing expensive litigation. He believed that the fears were overdone and the sector offered high barriers to entry – his bet paid off.
Similarly, like Warren Buffett, he was “castigated” for refusing to invest in the technology boom, but was vindicated by the dotcom crash.
But his performance has been mixed lately, says Thisismoney.co.uk. Last year, he admitted his “aversion” to the banking sector had hit the fund’s performance. As Frank Talbot at Citywire says, “his long-term performance is excellent, but his strategy of taking big bets in unloved sectors suffers over the short to medium term”.
Around 30% of holdings are in pharmaceuticals, which Woodford believes is “undervalued”. He also thinks there will be further downgrades for cyclical stocks and is continuing to avoid the banking sector. This one is for investors in it for the long haul.
Contact: 0800-085 8677.
Invesco Perpetual High Income top holdings
| Name of holding | % of assets |
|---|---|
| AstraZeneca | 8.94% |
| GlaxoSmithKline | 8.21% |
| Roche Holdings | 6.22% |
| British American Tobacco | 5.66% |
| Reynolds American Inc | 5.29% |
| Imperial Tobacco | 4.95% |
| BT Group | 4.95% |
| Reckitt Benckiser | 4.90% |
| BAE Systems | 4.78% |
| Capita Plc | 3.73% |