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Woodford sells stake in Vodafone

Neil Woodford 480

Invesco Perpetual income manager Neil Woodford has sold his entire stake in Vodafone, according to the Telegraph.

Woodford, who manages more than £20bn of assets across his Income and High Income funds, has sold the stake due to reduced forecasts for revenue growth.

Woodford has gradually reduced the position in the past few months across both funds. The stock fell out of his top 10 positions in August 2012, having accounted for 4.8 per cent of both portfolios in June 2012.

Invesco Perpetual director Mitchell Fraser-Jones says: “The company has reduced its forecasts for revenue growth on the back of ongoing weakness in its core southern European markets and the cash flow cover of the dividend has fallen to what we view as uncomfortably low levels.

“The company announced a share buy-back rather than the hoped for special dividend with its dividend from Verizon Wireless, while we also have reservations about the company’s ability to maintain its margin on data revenues.”

Woodford’s funds have lagged behind their peers in the Investment Management Association UK Equity Income sector in the past 12 months but he remains one of the most successful managers in the sector over the longer term having beaten the average return over three and five years.

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