He runs the £10 billion Woodford Equity Income fund has returned 36 per cent over the past three years, compared to 24 per cent for the average fund in the IA UK Equity Income sector in the same time period.
The fund manager was almost a lone voice before the EU Referendum in opining that a vote to leave the EU could have a short-term ‘stimulative ‘ effect on the UK economy.
Since then, he has been, by his own admission, uncharacteristically bullish about the prospects for the UK economy.
His view that the UK economy is on a smooth path have provoked him to make a number of new investments that are geared to the success of the UK economy.
Woodford commented, ‘Another new holding is Forterra, a UK brick manufacturer. The UK brick industry has been structurally challenged for many years, with surplus capacity. As a result, the domestic industry has consolidated and Forterra is one of the last remaining players with a solid market position and a low cost base. The weakness in sterling since last summer has meant that importing bricks from Europe is no longer as economic and the long-term prospects for Forterra now look very attractive. We believe the company is well-positioned to benefit from steady growth in the UK construction industry in the years ahead and took the opportunity to buy a meaningful stake in the business at what we consider to be a very appealing valuation.’
He continued on the same theme with the comment that, ‘Other new additions to the portfolio in recent weeks include housebuilders Barratt Developments, Taylor Wimpey and student accommodation developer, Watkin Jones, construction materials businesses Eurocell and Topps Tiles, real estate businesses British Land, Hansteen, Londonmetric and Sirius Real Estate, technology service companies Softcat and Micro Focus and retailer Card Factory. We also participated in the IPO of Eddie Stobart Logistics, a business we know well as long-term investors in its parent group, Stobart. The IPO underscores how active and creative Stobart’s management team is in realising shareholder value from its collection of assets.’
The CF Woodford UK Equity Income fund has returned 16 per cent over the past year. The largest investment in the fund is pharma giant Astra Zeneca, which is also the largest holding in Woodford’s recently launched Income Focus fund.