Speaking on Monday last week, Woodford said although a number of businesses are likely to find it hard in the next two years, he is confident that those that make it through are likely to do so in good shape.
He remains negative on cyclical and consumer-facing stocks but believes tobacco, pharmaceuticals, telecoms and, to an extent, the oil sector all represent good opp-ortunities for investment.
He said: “I am still very optimistic about the cash resilience of those businesses, the asset resilience of those businesses and their dividend-paying potential. Those are four sectors that we are very keen on and where we have substantial weightings currently and expect them to do well over the next three to five years.”
Woodford says he now believes these are worse economic conditions than in the early 1990s but says his own defensive approach should negate some of the threats .
He says: “The overall index has been very disappointing now for a very long time. I think we are now a lot lower than we were 10 years ago, for example, in terms of index performance but I think the asset class now is looking very bombed out and should deliver decent returns over a three to five-year per- iod and especially against other asset classes.”
“I would say that this is a very bad time to disinvest and on a three to five-year time horizon, I think this is a good time to put money to work in the UK equity market but you have got to be very selective.”