Woodford to increase overseas limit in trust

Neil Woodford is poised to increase the limit on overseas investments in his £940m Edinburgh Investment trust to 20%, as the manager continues to find better income opportunities outside of the UK.

Woodford is currently restricted to holding 15% in securities listed on overseas exchanges.

The move would allow the income star, who also runs the Invesco Perpetual Income and High Income funds, to top up existing bets which have been performing strongly.

The manager holds overseas stocks including Reynolds American, Altria, Roche, and Novartis in the trust, as well as backing them in his two multi-billion pound OEICS.

He has continued to stick to his guns, investing in defensive sectors in the expectation they will see share prices rise as investors look for dependable companies.

The move is starting to pay off, with both his long-only OEICS topping the IMA Equity Income sector over three months, amid rotation away from cyclicals.

The proposal was announced in the trust's annual results released this week, with the company also announcing it had outperformed the FTSE All Share index in the last year by 2.7%, to end of March 2011.

"In 2009 shareholders approved a change to permit investment of up
to 15% of the value of the investment portfolio, measured at the time of acquisition, in securities listed on overseas exchanges," the trust's results said.

"A number of such investments have been made in the subsequent two years, they have performed well, and the manager has no flexibility to add to these holdings or to purchase others which he believes to be attractive."

The board said it is in the company's interest to increase the overseas limit, and plans to propose an appropriate resolution to shareholders at the upcoming annual general meeting.

Any change would need shareholder approval.