Renowned investor Neil Woodford will be hoping this week holds fewer hidden surprises than the last fortnight, as some of the largest companies in his portfolio have seen their share prices plummet.
The business which held the largest position in Woodford's Equity Income Fund portfolio, drug company AstraZeneca, suffered as its shares plunged towards the end of last month. It became the biggest faller of the day on the London Stock Exchange after it said trials of a lung cancer treatment had not met expectations.
Imperial Brands, which occupied the second largest space in the fund, saw its shares dive just the next day as the US Food and Drug Administration (FDA) announced plans to cut nicotine in cigarettes.
Although the announcement wiped a significant amount off the value of his portfolio, Woodford may well have felt the relief in the fact that he no longer owned British American Tobacco (BAT) – a stake which he had sold just weeks earlier. In the aftermath of the FDA's announcement, BAT's share price fell from 5,322p to 4,713.5p. Woodford had sold his shares at more than 5,000p apiece.
But the move to increase the fund's stake in Provident Financial may have seemed less wise, as Britain’s largest sub-prime lender warned in the last week of July that its profits had been hit by severe operational problems.
The Woodford Equity Income Fund was launched three years ago, shortly after Woodford left Invesco perpetual to set up Woodford Investments, and aims to offer “capital growth and a growing income stream, paid quarterly”.
Despite the recent falls in some of its holdings, Woodford's Equity Income Fund is still outperforming the FTSE All Share Total Return index by around seven percentage points.