Neil Woodford is among the most well-known fund managers in the UK. Given his star status, many private investors monitor Woodford’s key holdings in an attempt to clone his investment strategy.

So let’s look at the top three holdings in the Woodford Equity Income Fund and examine if they’re worth buying.

Financial market volatility

But first, let’s remember that there could be a great deal of near-term volatility in the financial markets after Friday’s EU referendum Brexit vote. The unexpected result has caused unprecedented amounts of uncertainty and if there’s one thing financial markets don’t like, it’s uncertainty.

Having said that, Woodford has made his stance clear on the result and has said he believes Britain’s long-term economic future will be largely unaffected by the decision to leave the EU. He’s also stated that his portfolio strategy will not change.

So with that in mind, here are Neil Woodford’s largest holdings.

Tobacco King

Woodford’s largest holding (7.6% of the fund) is tobacco giant Imperial Brands (LSE: IMB).

Tobacco stocks don’t suit everyone’s investing tastes, but Woodford has made it clear that he remains a strong fan of both Imperial Brands and rival British American Tobacco.

There’s no doubt Imperial Brands has performed well for his portfolio. The stock has delivered total annualised returns of almost 18% per annum over the last five years. But is this a reason to buy Woodford’s largest holding?

For me, the key question with Imperial Brands comes down to the long-term sustainability of tobacco revenues. I generally look for long-term revenue drivers when searching for investment opportunities, and personally I’m not 100% convinced about the sustainability of the tobacco industry over time.

Having said that, I can see plenty of reasons why investors could be interested in buying Imperial Brands right now though. The stock trades on a respectable P/E ratio of 15.5 times next year’s earnings, yields an excellent dividend of just under 4%, has high levels of free cash flow and could be seen as a ‘defensive’ stock in times of uncertainty.

Another key benefit of Imperial Brands is that it generates revenues from all over the world, so a weaker pound would be good for earnings. If you’re interested in a safety stock for the current volatile environment, Imperial Brands could be worth a look.

Healthcare theme

Woodford’s next two largest holdings are healthcare giants AstraZeneca (LSE: AZN) and GlaxoSmithKline (LSE: GSK) at 7.2% and 6.4% of the portfolio, respectively.

Healthcare is a theme that I like and with the global population ageing, I believe it’s a theme that could drive long-term revenues going forward. It’s also one that could provide some insulation from Brexit-related market volatility as healthcare is also considered to be a defensive sector.

While both companies have struggled for revenue growth over the last few years, a key attraction of these stocks is their sizeable dividend payouts. AstraZeneca yields around 5.1% while GlaxoSmithKline pays out an even bigger 5.4%.

One concern is that last year both companies’ dividends exceeded their earnings from continuing operations, which isn’t ideal. It’s an issue to keep an eye on going forward in the current volatile market. However, I can see the attraction of buckling down with these two healthcare powerhouses.

Do you have a strategy for the Brexit volatility? 

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Edward Sheldon owns shares in GlaxoSmithKline. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended AstraZeneca. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.