TRUST
WOODFORD PATIENT
CAPITAL TRUST
On the eve of the first portfolio breakdown from this
hugely popular new launch, Daniel Lanyon asks if it has
risen too fast, too soon
trustnet.com
PERFORMANCE OF TRUST VS SECTOR
AND INDEX SINCE LAUNCH
20%
15%
IT UK All Companies (4.14%)
Woodford - Patient Capital Trust (13.75%)
FTSE All Share (-4.21%)
10%
5%
0%
-5%
Jul
-10%
Jun
MANAGER: Neil Woodford
LAUNCHED: 21/04/2015
PREMIUM/DISCOUNT: +10%
ONGOING ANNUAL EXPENSES: 0.35%
CROWN RATING: N/A
The first list of holdings for
Woodford’s trust will be made
available in early to mid-August
but it is as yet unclear whether
the manager will follow his habit
of publishing a full portfolio
breakdown as he has done with
his £6bn CF Woodford Equity
Income fund.
The manager’s outstanding
record has ensured demand for the
trust’s shares has been nothing
short of spectacular and it quickly
moved to a premium of 13 per
cent after launch in April, although
this has now fallen to 10 per
cent. Experts are now split as to
whether the trust still represents
a good long-term prospect, with
May 15
I
n the Woodford Patient Capital
Trust, the latest venture
from the much-vaunted Neil
Woodford, the manager has not
only ventured into new territory,
pioneered an innovative fee
structure and broken records for
initial capital flows; he has also
asked for your patience.
Woodford believes that small
businesses, particularly those
spun out of top UK universities and
where intellectual property is a
core asset, offer hugely compelling
investment opportunities. He says
chronic underfunding for these
types of businesses make them
attractive long-term holdings, but
only if they have access to cash.
As yet there are only a few
indications of where the record
£800m of seed money will go.
Initially, it has been parked in the
type of large caps the manager is
most familiar with – big pharma
and big tobacco. Woodford has
made no official statement about
where he is putting the huge pot
of cash to work, but we know from
external sources he has bought a
stake in AJ Bell – an investment
platform aimed at the DIY investor.
Iain Scouller, analyst at broker
Oriel Securities, recently advising
investors to sell out.
“Given the long-term patient
investment style, we think the
shares have risen too far, too
soon, partly for technical indexjoining reasons,” he said.
Others, such as Mark Dampier,
head of research at Hargreaves
Lansdown, point out that trying
to time the market goes against
the ethos of the patient strategy.
The trust has returned 13.75
per cent since launch compared
with losses of 4.21 per cent from
the FTSE All Share over the same
period. The average trust in the
IT UK All Companies sector is up
4.14 per cent.
However, ignoring the
movement to a double-digit
premium, the underlying shares
have moved up 3.4 per cent.
The trust’s ongoing annual
expenses are not expected to
exceed 0.35 per cent of assets
under management and will be
paid out of the quoted stocks’
income, with any excess given to
shareholders as a dividend.
Source: FE Analytics
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