Woodford Patient Capital Trust PLC Reveals All!

When top investor Neil Woodford launched his Woodford Equity Income fund just over a year ago there were few surprises when he revealed his holdings. The portfolio was dominated by familiar blue-chip names identified by Woodford as companies capable of delivering positive long-term returns and a growing income stream — a strategy he’d employed with huge success at Invesco Perpetual for more than a quarter of a century.

However, the launch of a second fund in April this year — Woodford Patient Capital Trust (LSE: WPCT) — was an altogether more intriguing proposition. Only a quarter of the portfolio would be given over to mature mid- and large-cap companies (or “our highest conviction blue-chip ideas”) — a further quarter would be invested in smaller growth companies, and a full half would be devoted to early-stage businesses (both quoted and unquoted).

Woodford gave some examples of the companies the trust would be looking to invest in. But this week he has revealed the full portfolio for the first time — or, at any rate, its standing at 30 June with about three-quarters of the cash invested.

The table below shows the top 10 holdings of the mainstream Woodford Equity Income Fund (WEIF) and which of these companies also make an appearance in the new Woodford Patient Capital Trust (WPCT).

  WEIF rank WEIF weighting (%) WPCT rank WPCT weighting (%)
AstraZeneca 1 6.98 16 1.93
Imperial Tobacco 2 6.94
GlaxoSmithKline 3 6.57 15 1.98
British American Tobacco 4 5.60
BT 5 3.88
Capita 6 3.45
Reynolds American 7 3.31
Legal & General 8 2.93 29 0.92
Centrica 9 2.91
Allied Minds 10 2.91 9 2.63

As you can see, only a select few of the heavyweights in Woodford’s mainstream fund feature in WPCT. In fact, among WPCT’s 49 holdings there are just four FTSE 100 firms: in addition to the three in the table above (AstraZeneca, GlaxoSmithKline and Legal & General), there is only Rolls-Royce (rank 32, 0.87% weighting in WPCT).

Now, Woodford may add some other blue chips to the portfolio, but if you’re looking for FTSE 100 investment ideas right now, the master investor’s “high-conviction four” might be a good place to start.

But what are the big bets of WPCT? The table below shows the top 10 holdings and some brief information on what are probably unfamiliar companies to many investors.

  Rank Weighting (%) Market Sector
Prothena 1 4.53 Nasdaq Health Care
Verseon 2 4.22 AIM Health Care
Northwest Biotherapeutics 3 3.97 Nasdaq Health Care
Proton Partners International 4 3.66 Unquoted Health Care
Circassia 5 3.66 FTSE SmallCap Health Care
Vernalis 6 3.22 AIM Health Care
Oxford Sciences Innovation 7 2.81 Unquoted Financials
Alkermes 8 2.80 Nasdaq Health Care
Allied Minds 9 2.63 FTSE 250 Financials
Imperial Innovations 10 2.41 AIM Financials

The preponderance of health care companies in the top 10 reflects the bias towards the sector in the portfolio as a whole. Health care accounts for almost half the total weighting — and over half when you take into consideration that a number of the companies listed as financials (including the three in the top 10) are investment companies focused on biotech and other leading-edge technologies.

In the trust’s maiden half-year results, which accompanied the release of the portfolio, Woodford declared himself: “pleased with the operational progress being made by our investee companies and very excited by the long-term potential that they collectively represent”.

Woodford’s new venture certainly offers an usual fund proposition  — as well as plenty of ideas for anyone who prefers to invest in individual shares.

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G A Chester has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.