Woodford Investment Management has revealed it does not share market excitement that Opec members will agree to cut oil production at their next meeting.
“We are sceptical,” head of investment communications Mitchell Fraser-Jones says. “It remains the incentive of all major oil producing nations to maximise production and to achieve the best possible price that they can for that output.
“It is questionable, therefore, whether the agreement that has been proposed can ultimately be reached and doubtful that it would be adhered to.”
The fund manager avoids resource-related stocks meaning it missed out on the market rally following Opec’s announcement last month it was heading towards a deal to cut production, immediately pushing the oil price towards $50 a barrel and prompting the FTSE 100 to rise.
Today Brent crude futures were trading at $52.42, while US West Texas Intermediates were trading at $51.02.
The Woodford Equity Income fund was slightly down in September, with Capita being the largest pull on performance due to a profit warning.
It returned negative 0.2 per cent for the month compared to the FTSE All Share, which returned 1.7 per cent.
The equity income fund also underperformed the benchmark in April due to a commodity rally.
Last week, the fund announced it had launched a Dublin-domiciled feeder fund for European investors, providing both currency hedged and non-hedged share classes.