Close behind is the Edinburgh Investment Trust, which is also managed by Neil Woodford, and then comes the laggard, the 3 picks.
Originally selected from the 3 most represented sectors in Woodford's top 10, this selection looked to be forging ahead in July and August but has since fallen back and, as things stand currently, is the only one of the 3 ways to follow Woodford that is showing a loss.
| Qty | £price | £value | %gain | |||
| Inv. Perp. High Income | 1110.14 | 5.58 | 6197.94 | 3.30% | ||
| Residue | 0.00 | |||||
| Dividends | ||||||
| Total | 6000 | 6197.94 | 3.30% | |||
| Edinburgh Investment Trust | 1182.00 | 5.09 | 6016.38 | 0.27% | ||
| Residue | 0.43 | |||||
| Dividends | 141.84 | |||||
| Total | 6000 | 6158.65 | 2.64% | |||
| 3 Picks | ||||||
| BAT | 61.00 | 32.74 | 1997.14 | -0.14% | ||
| Glaxo | 138.00 | 13.35 | 1841.61 | -7.92% | ||
| Vodafone | 1191.00 | 1.61 | 1919.30 | -4.04% | ||
| Residue | 3.68 | |||||
| Dividends | 149.72 | |||||
| Total | 6000 | 5911.45 | -1.48% | |||
| Transactions in the month: | ||||
| Invesco Perp. High Income | N/A | |||
| Edinburgh Inv. Trust | N/A | |||
| 3 Picks | N/A | |||
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| Click to enlarge, close to return. |
Taking a look at the current Top 10 holdings in the High Income I can see that I now have a problem in that the top 3 sector representations in the Top 10 have changed.
Last month saw Vodafone drop out of the top 10, which left BT as the sole Telecoms representative.
However, as of this month's update I see that within the top 10, the Pharmaceuticals and Tobacco sectors continue to dominate, and, with 23.88% and 16.03%, these 2 sectors now amount to 39.91% of the entire High Income Fund.
But, following changes in share price, Reckitt Benckiser (household consumer goods), has overtaken BT to become the 3rd largest sector weighting in the Funds Top 10 holding.
And, whilst clinging to the fact that BT and Vodafone probably still total more than Reckitt Benckiser I have little visibility as to whether or not Woodford has other holdings such as Proctor & Gamble or Unilever to boost the sector weighting for consumer goods.
All that I can see is that in the total Fund industry sector breakdown, Consumer goods total 21.56% but Telecoms are now 7.73%.
This lack of visibility being the reason for working off the dominant Top 10.
I also see that, according to Motley Fool (http://www.fool.co.uk: Here's what the City super-investor has been buying and selling.), Neil Woodford has again managed a couple of wonderfully timed trades, with BG Group and Vodafone being sold ahead of their respective slumps at respective average prices (approx. calcs), of 1235p and 180p.
Read into this what you will but it does suggest that Neil Woodford, is not a rigid investor locked into high income.
His influentially sized holdings probably also give him a position closer to the "well" and access to information that is already out of date when it is published to us mere mortals.
He also appears to be willing to trade with large scale sell-offs not out of the question once he has a clear view on things e.g on banking, company/industry specific problems, and the lack of recovery in the EU.
This is reflected in the other extreme as well with 40% of the High Income Fund now invested across just 6 companies and 2 sectors.
As ever, it seems likely that the same approach is being reflected in his management of the Edinburgh Investment Trust as well.
But I find this approach a little conflicting with the assumption that he has a "long term" view of things as, whilst he has chosen to stick with long term projects like BAE, he has cashed in his chips on Tesco, and BG, and significantly reduced holdings in Vodafone and Tate & Lyle.
One thing to note is that the volumes being traded could themselves be creating noise, volatility, and (conspiratorial whisper!), trading opportunities following sell-offs, unless the shares are placed en bloc with buyers.
But, in summary, its not yet a difficult time for the 3 picks (valuation wise), as the majority of the losses continue to be the set-up costs but, I am being challenged on whether to sell Vodafone (Telecoms), as it is unlikely to find its way back into the top 10 now given the Fund's sale, and replace it with Reckitt Benckiser (household consumer goods).
Hmmm.
Related article links:
Earlier related posts:
- August 2012: "following Woodford" update.
- July 2012: Following Woodford update.
- June 2012: Portfolio Update.
- July 2012: Following Woodford update.
- June 2012: Portfolio Update.
- New proposed investment strategy based upon Neil Woodford's top 10.
Note: Unlike my Portfolio updates (Portfolio Updates.) which reflects an actual investment portfolio, following Woodford is an experimental strategy and a virtual portfolio.
However, I do hold an investment in Vodafone.
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