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LF Woodford Equity Income Class Z - Accumulation (GBP)

Sell:101.61p Buy:101.61p Change: 0.12p (0.12%)
Prices as at 24 May 2019
Change: 0.12p (0.12%)
You can buy or sell holdings in this fund through an ISA, Lifetime ISA, SIPP or Fund & Share Account
Prices as at 24 May 2019
Change: 0.12p (0.12%)
Prices as at 24 May 2019
You can buy or sell holdings in this fund through an ISA, Lifetime ISA, SIPP or Fund & Share Account
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

Our view on this Fund

This fund features on our Wealth 50 list of what we believe are the best funds in each sector.

Neil Woodford is one of the most successful, experienced and well-known fund managers in the UK. Over the course of his career he's significantly outperformed the UK stock market although recent performance has been disappointing. He often invests very differently to the wider market though and this inevitably leads to periods of underperformance.

After setting up his own fund management business in May 2014, we think he's well incentivised to perform over the longer-term. In this fund Neil Woodford blends investments in larger, high-yielding companies with smaller, more innovative businesses. The smaller businesses provide long-term growth potential but are higher risk than their larger counterparts.

The fund doesn't have a strict income target. Neil Woodford tries to generate a good total return, combining both rising income and capital growth. This means he will sacrifice some income upfront for the prospect of better growth in the capital and income over the long term. Of course there are no guarantees and we see this as a higher-risk UK fund.

Our view on the sector

The UK stock market is home to lots of world-class companies. From international giants to a diverse array of smaller businesses. This provides a rich hunting ground for fund managers in this sector. They all try to grow investors' money over the long term, but each goes about it in a different way. Some focus on larger companies in the FTSE 100 index, others invest in medium-sized or smaller companies, and some have the flexibility to invest in any company, regardless of size. Some aim to match or deliver a return similar to the broader UK stock market. Others have the freedom to try and make as much money as possible for investors and take more risks. That could mean investing in only a small number of companies, for instance. A fund that invests in UK shares is normally the first port of call for UK-based investors. But with such a variety on offer, investors should make sure a fund is right for their circumstances before investing.

Performance Analysis

Over his fund management career, Neil Woodford has outperformed the broader UK stock market . Our analysis of his performance shows a key strength is his interpretation of stock market trends and subsequent positioning of his portfolio. However, in recent years the fund's performance has been some way behind the broader UK stock market.

He often invests against the herd, so the fund can look quite different to the wider market and its peers. There will be times when his views are out of kilter with the rest of the market and his funds will go through periods of weaker performance. Recently he's had a more positive outlook for UK companies that make most of their money domestically, rather than overseas. A lot of people haven't shared the same view, and this has held back performance.

We still think the manager is able to get the big calls right, and expect this fund to do well for investors over the long term.

Investment Philosophy

Neil Woodford invests in companies that have been overlooked by other investors while taking into account his views on the broader UK economy. If he spots an opportunity, he'll invest whatever sector the company's in and whether it's large or small.

Process and Portfolio Construction

Neil Woodford searches for companies whose share prices don't properly reflect their future prospects. He also likes companies with predictable earnings and high cash flow. This is combined with his wider economic views.

In recent years Neil Woodford has become increasingly positive on the prospects for some of the smaller companies he owns. This part of the portfolio has grown and will be an important factor in the fund's future performance .

If Neil Woodford is right, this part of the portfolio could boost performance. In the short to medium term. However, it could make the fund more volatile and it reduces the potential for higher dividends. This is because some of the smaller companies don't pay dividends yet.

As a result this is unlikely to be the highest-yielding fund in the sector and is unlikely to appeal to a portfolio invested for high income today. For those comfortable with the aim to generate good long-term performance via a combination of income and capital growth, we think the fund has excellent prospects. The fund takes its charges from capital, increasing income return but reducing the potential for capital growth.

question mark Manager Track Record Based on HL Quantitative Research

  • Invesco High Income (UK) Inc
  • Invesco High Income (UK) Acc
  • FTSE All-Share TR
  • LF Woodford Equity Income C...
  • FTSE All-Share TR

Fund Track Record

24/05/14 to 24/05/15 24/05/15 to 24/05/16 24/05/16 to 24/05/17 24/05/17 to 24/05/18 24/05/18 to 24/05/19
Annual return n/a -0.51% 15.41% -10.05% -18.31%

Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.

Fund Management Group Comment

Woodford Investment Management was founded by experienced fund industry professionals and is designed to harness technology and professional outsourcing options to allow the core of the business to focus on fund management. As it is not weighed down by legacy costs or high expenses associated with existing fund management businesses, the company is able to offer its clients a better price.

Information about the fund

Fund manager biography

manager photo
Manager Name: Neil Woodford
Manager start date: 2 June 2014
Manager located in: Oxford

Neil Woodford is one of the most respected and highly regarded fund managers in the UK. His disciplined, valuation-oriented approach has consistently delivered outstanding long-term performance to his clients. Neil commenced his career 1987 at London-based Eagle Star, but has spent most of his investing career based in Oxfordshire, fine-tuning his distinctive and often contrarian approach away from the herd mentality of the City. He was appointed a Commander of the Order of the British Empire (CBE) in 2013 for services to the economy. Neil announced that he was setting up his own fund management business in 2013 and joined Woodford Investment Management in May 2014.

Data policy - All information should be used for indicative purposes only. You should independently check data before making any investment decision. HL cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used. Benchmark data provided subject to this disclaimer.
You can buy or sell holdings in this fund through an ISA, Lifetime ISA, SIPP or Fund & Share Account