Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Is Woodford set for a u-turn on banks?
Britain’s most famous fund manager Neil Woodford is not ruling out banks for his soon-to-launch CF Woodford Income Focus fund, despite previously having a negative view on the sector.
Interestingly, the notorious bank bear has been quoted as saying ‘I think banks are more investable than they have been in a long time, but I can’t tell you whether they will appear in the portfolio or not’.
The inclusion of banks, a logical source of high yield, would represent a u-turn for Woodford, who as recently as November 2016 told the AJ Bell Investival conference banks were ‘unappealing investments’ and concluded ‘life will remain difficult for banks to earn attractive returns’.
Targeting an income of 5p in its first year off a £1 launch price, implying an initial yield of 5%, the new fund will benefit from the flexibility to invest overseas.
Moreover, it will only invest in quoted assets, unlike Woodford’s other two funds, CF Woodford Equity Income (GB00BLRZQ620), which he dubs a total return fund ‘but with an income responsibility’, and Woodford Patient Capital Trust (WPCT).
A more concentrated portfolio prioritising income generation, the new fund will be unfettered by the long tail of unquoted and small quoted tech businesses found in the first income product.
Investors can apply for units in CF Woodford Income Focus through their stockbroker. The launch offer period runs from 20 March until 12 April. (JC)