Neil Woodford old vs new

The older fund is more focused on total return, aiming for capital growth and a growing income stream - an approach that proved highly successful for Mr Woodford when running the Invesco Perpetual Income (GB00BJ04HX60) and High Income (GB00BJ04HQ93). He ran these funds for more than 20 years up until 2014.

CF Woodford Equity Income holds unquoted companies, including BenevolentAI, the tenth-largest holding, and Oxford Nanopore, which accounts for 1.1 per cent of its assets. Other omissions from CF Woodford Income Focus include US-listed pharmaceutical companies Prothena (PRTA:NSQ) and Theravance Biopharma (TBPH:NMQ).

And although like CF Woodford Equity Income its largest holding is AstraZeneca (AZN) and it has a substantial allocation to AbbVie (ABBV:NYQ) - it has 13 per cent in healthcare shares, in contrast to the older fund's 29 per cent allocation.

Neither fund holds GlaxoSmithKline (GSK), which Mr Woodford sold out of CF Woodford Equity Income last month, the proceeds from which were used to buy into domestic cyclical opportunities. CF Woodford Income Focus also holds a number of these, including its sixth-largest holding Lloyds Banking (LLOY). Financials are the largest sector allocation for both funds - 37 per cent for CF Woodford Income Focus and 31 per cent for CF Woodford Equity Income.

"In the run-up to the launch of the Income Focus Fund I had said that I believed there was an attractive domestic opportunity, in part because people were too downbeat about the UK economy," explains Mr Woodford. "The new portfolio is a manifestation of this view, but in a more income-focused way. The bearish mood has resulted in very big share price falls in some domestic cyclical sectors and it is this opportunity set that I see in the stock market right here, right now. I have been taking advantage of some of the depressed valuations in domestic cyclicals, selectively buying stocks in sectors such as housebuilders, banks, construction, building materials and property for the new fund. There are also some familiar names in the portfolio, which is in great shape and I am extremely confident it will deliver the income target we set when we launched the fund in March."

Richard Troue, head of investment analysis at Hargreaves Lansdown, says: "He is certainly not being backward in coming forward with this strategic view, with two housebuilders in the top 10 and around 15 property holdings in total amounting to over 20 per cent of the portfolio. By keeping the portfolio focused with only 50 holdings, each company will have a significant impact on performance, although it is a higher-risk approach."

CF Woodford Income Focus has 50 holdings compared with CF Woodford Equity Income's 131, and assets of about £650m against over £10bn for the older fund.

But it has over three times the percentage of its holdings in consumer services as CF Woodford Equity Income, and over four times as much in utilities, including National Grid (NG.), water company Pennon (PNN), and top 10 holding SSE (SSE).

Nearly 89 per cent of the fund's assets are invested in the UK, although it has no geographic constraints because it is ranked in the Investment Association (IA) Specialist sector. CF Woodford Equity Income cannot have more than 20 per cent of its assets outside the UK because it is in the IA UK Equity Income sector. CF Woodford Equity Income's overseas holdings include US-listed biotech company Gilead (GILD:NSQ) and German residential property developer LEG Immobilien (LEGX.N:GER).

Woodford Investment Management says that CF Woodford Income Focus "has no geographic constraints to give Neil the flexibility to capture income from international equities if and when it becomes appropriate. At the outset, however, the fund is unlikely to need to utilise that flexibility because there are plenty of attractive yield opportunities here in the UK. Initially, therefore the vast majority of assets are likely to be invested domestically."

CF Woodford Income Focus Fund Portfolio as at 30 April 2017

Source: Capita/Northern Trust/Woodford Investment Management

*Holdings also in CF Woodford Equity Income

CF Woodford Income Focus sector allocation as at 30 April (%)

Source: Capita/Northern Trust/Woodford Investment Management

CF Woodford Equity Income sector allocation as at 30 April (%)

Source: Capita/Northern Trust/Woodford Investment Management