Aviva divests £1bn from tobacco

Aviva has announced it is divesting around £1bn from tobacco.

It will continue to invest in tobacco companies for third-party investors or through index trackers that have exposure.

The divestment, which includes equities and corporate bonds, is part of a review of positions in a number of areas, says an Aviva spokeswoman.

French rival Axa divested from the sector last year.

Tilney Group managing director Jason Hollands says whatever ones views on tobacco products, tobacco is legal and is popular in many UK equity funds, especially income funds.

Hollands notes Aviva’s UK Equity Income fund holds its third biggest position in British American Tobacco (4.6 per cent) and a further 3.3 per cent is in Imperial Brands.

This month Neil Woodford, who has long favoured tobacco stocks, revealed he had trimmed British American Tobacco in Woodford Equity Income to fund his contrarian bet on the UK economy.