Neil Woodford says he has “deep insecurities about everything I do” as he prepares to launch his Income Focus fund next month.
The star manager, who runs over £10bn in his two existing mandates, says the stockmarket “humbles you every day”.
The head of investment at his eponymous firm says: “I suffer from imposter syndrome…I test my hypotheses every day. My severest critic is myself, as you might expect. There is absolutely no complacency about what I do or say.”
The Income Focus fund is the last Woodford will run, he says, adding that it was always the plan to have three products spanning the risk spectrum.
He says: “We launched the Equity Income fund first, which looks and feels like the products I have run for a long time. It is about the total return. I have never thought of myself as an income manager. I am a total return manager, with an income orientation.”
Following the closed-ended Patient Capital trust, Woodford’s new Income Focus fund will sit at the other end of the spectrum, with no exposure to unquoted companies.
It will also be notably different to the existing open-ended Equity Income fund, although there will be a crossover of between 15 to 20 holdings.
“Equity Income has 25 per cent in stocks not paying dividends, so those businesses will not be in the Focus fund,” he says.
“The dummy portfolio has around 50 stocks, which is more concentrated than Equity Income and Patient Capital, but not overly concentrated.”
Income Focus is not restricted geographically like the Equity Income fund, which has to invest at least 80 per cent in UK equities, and will sit in the specialist sector. However, Woodford maintains that it will not be a ‘global’ fund.
“I’m not a global man,” he says. “I wouldn’t want to be. It is a different skill set and a different approach. I wouldn’t want to embrace it. At launch we won’t be anywhere near 20 per cent invested globally. The income job can be done very well from a domestic-focused portfolio.”
He adds: “We will invest domestically and internationally as and when it is the right thing to do.”
The new fund is launching with a yield target of 5 per cent based on the launch price, which Woodford hopes to grow by “low to mid digits per annum” to provide “high single digit returns”.
“Over the long term there may be the scope to engage better returns,” Woodford says.
Income Focus launches on 20 March, subject to regulatory approval, with a fixed offer running until 12 April and four share classes.