Neil Woodford’s Edinburgh Investment Trust was buoyed by its lack of exposure to mining stocks and heavy exposure to the pharmaceutical sector.
The manager says both positions have benefited the investment trust during the six months to 30 September, as net asset value per share outperformed its FTSE All-Share index benchmark.
He says: “The portfolio has no exposure to the mining sector and this provided a positive impact on performance over the six months.
“The sector underperformed as results confirmed the impact that falling commodity prices and rising costs are having on earnings and future projects in the sector.”
Woodford adds: “The company is very heavily exposed to the pharmaceutical sector, and this too provided a positive impact on performance.”
However, the trust’s significant weighting to the tobacco sector, which underperformed during the six month period, detracted from performance.
Yet, Woodford believes stocks in the sector can deliver attractive profits and grow dividends in a low growth environment.
Woodford sold out of International Power after GDF Suez announced it would buy the remaining 30 per cent stake in the company it does not already own.
The manager also held on to BAE Systems following the abortive takeover bid by EADS and has increased its position in Capita, following a recent share placing. Woodford also disposed of Hibu and reduced exposure to BG and Tate & Lyle.
The trust saw net asset value rise by 3.4 per cent during the six months to 30 September, compared with a 1.9 per cent increase in the FTSE All-Share index.