Neil Woodford says his biggest investment mistake during his career is not investing enough in tobacco companies.
Speaking to Radio 5 live’s Wake up to Money, he said that he continues to back tobacco companies, despite other investors shunning the sector.
“I’m paid to exercise investment judgement. I have to look at my investment universe and pick the best investments that I can and expose my investors to those investments and hopefully deliver attractive returns,” he says.
“And I have throughout my career believed the tobacco industry offers some very attractive characteristics. Probably, if I were to put my hand up, the biggest single mistake I’ve made in my career is not having enough tobacco exposure.”
Currently Woodford has more than £1bn invested in tobacco firms at Woodford Investment Management.
In his Woodford Equity Income fund his largest holding is Imperial Tobacco, at 7.67 per cent of the fund. British American Tobacco at 5.49 per cent and Reynolds American at 3.93 per cent are also in the fund’s top 10 holdings.
Performance attribution data published by the asset manager, which highlights which stocks have driven up performance, shows tobacco firms rank highly.
Most recent data shows that Imperial Tobacco was the second highest contributor, bringing 2.03 per cent of performance, closely followed by Reynolds American at 1.87 per cent.