Woodford reveals top 10 holdings dominated by pharma and tobacco

Highly influential fund manager Neil Woodford has revealed the top 10 stocks in his new £1.6bn Woodford Equity Income fund, including new favourites Imperial Innovations and Rolls-Royce.The university technology spin-out group and the aircraft engine-maker did not feature in the manager's previous £12.8bn High Income fund at Invesco, which he left in April.Woodford said in a statement that he had been careful to build a portfolio that avoided sectors that he believes "are vulnerable to a faltering global economy", with a heavy leaning to tobacco and pharmaceutical companies to achieve this aim. "These two sectors are resilient to falling demand, have strong balance sheets and attractive valuations," he said.The largest two holdings in the new fund are drug companies AstraZeneca, which accounts of 8.3% of the portfolio, and GlaxoSmithKline with 7.1%. Woodford also has 3.6% of the fund in Swiss giant Roche.Cigarette makers represented in the top ten included British American Tobacco at 6.2%, Imperial Tobacco at 5.3% and Reynolds American at 3.6%.Woodford has also given strong backing to the new sports-focused strategy at BT, with a 6.02% of the portfolio. Rounding up the top ten is outsourcing group Capita, at 3.36%.Woodford said his recent cautious view on the global economy has not changed. "The liquidity flows that have supported asset prices over the past five years are going into reverse, while growth in many parts of the world is being downgraded."The global economy and financial markets both face a tricky time over the next few years, but there are still many undervalued assets in equity markets and it is these opportunities that the fund is seeking to exploit."OH