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Woodford goes shopping for Brexit bargains

  • Woodford backs the UK economy
  • Woodford sells Glaxo and buys Lloyds, housebuilders and property stocks

The latest update from Woodford Investment Management reveals that Neil Woodford has sold out of GlaxoSmithKline and has been on a bit of a shopping spree with the proceeds.

New additions to the Woodford Equity Income portfolio include Lloyds bank, Barratt Developments, Taylor Wimpey and British Land, as the manager seeks to make the most of valuation opportunities thrown up by what he sees as excessive bearishness over the UK economy.

Laith Khalaf, Senior Analyst, Hargreaves Lansdown:

"Neil Woodford has been out shopping for some Brexit bargains, in a sign that the UK’s best known fund manager thinks fears over the UK economy are overblown.

The investment in Lloyds bank is a bit of a milestone seeing as Neil Woodford hasn’t held banks in his portfolio since 2003, aside from a very brief flirtation with HSBC in 2014. Selling out of banks was one of the big calls Neil Woodford made which protected investors from the worst ravages of the financial crisis, and reaffirmed his reputation as an outstanding fund manager.

Ten years after the onset of the credit crunch, Neil Woodford is now back in Lloyds, which reflects the fact that banks are finally returning to business as usual. Of the UK listed big banks, Lloyds has made the most progress, and now looks like a safe stable bank with the potential to pay investors a handsome level of dividends. The bank is heavily plugged into the UK economy though, so any domestic shocks will take their toll.

We believe Lloyds is the most attractive banking stock in the Footsie. It has a lower risk profile than its peers, and a better grip on costs, while the huge costs of PPI compensation finally seem to be disappearing in the rear view mirror. The fact the government is close to cashing in the last bit of its stake in the bank is also a positive, as this eliminates a big seller in the market putting downward pressure on the share price.

Lloyds is the most popular stock held by our DIY investors, and with a strong consumer brand and a prospective yield of over 4.5%, it’s easy to see why.

As well as Lloyds bank, Woodford has bought into housebuilding, property and construction stocks, which is a vote of confidence in the UK economy, despite the ongoing Brexit process. Neil Woodford is a contrarian investor, which means not only being wary when others are complacent, but being bullish when others are bearish."