Here are Neil Woodford's latest trades

Neil Woodford loves the healthcare sector. High-yielding drug majors have been a significant contributor to his fund's success. But it also hurts disproportionately when they fall out of favour, which is what happened last month.

Ironically, much of the damage was done by the perceived threat of a Hillary Clinton victory in the US presidential election. The Democrat's likely crackdown on drug pricing had long been an overhang for the sector.

It's partly why investors rotated into banks and commodity-based stocks. And that triggered a modest decline in net asset value (NAV) at the CF Woodford Equity Income fund, compared with small gains for the FTSE All-Share index. It was similarly "grim" at the Woodford Patient Capital trust, where the "intense storm" around healthcare hit NAV.

Adverse effects during late-stage trials for head and neck cancer treatments had the income fund's AstraZeneca lower. Traders thought this could have implications for results of trials for Mystic, due next year.

We remain confident AZN's drug pipeline is well placed to create long-term value"We do not share the market's concern however, as the treatments are for completely different types of cancer and it is unlikely that there is a valid read-across," reckons Woodford.

"We remain confident that AstraZeneca's innovative drug pipeline is well-placed to create substantial long-term value and added to the holding towards the end of the month."

GlaxoSmithKline fell despite much better than expected third-quarter results. Theravance Biopharma struggled, too, although, after a meeting with management, Woodford still regards long-term prospects as "extremely attractive".

However, there was good news at Alkermes, which surged on the back of clinical data from trials for its potential blockbuster treatment for major depressive disorder.

Both Utilitywise and litigation finance firm Burford Capital also did well for the portfolio.

Big trades

After hitting an all-time high in reaction to the British American Tobacco bid, Woodford cashed out of Reynolds American completely "at a very attractive price".

He used the money to add to positions in BAT, which still owns 42% of Reynolds, and peer Imperial Brands.

Swiss drugs giant Roche also got the boot from the fund, with the proceeds recycled into Capita, Provident Financial, Lancashire and Paypoint. Unquoted biotechs AMO Pharma and Precision Biopsy also make it in.

And Woodford has had a bit of luck playing the currency markets. Anticipating a drop in sterling following the Brexit vote, Woodford left the portfolio's US dollar exposure unhedged. But the fun, he thinks, is over.

"We now believe that the weakness in sterling has gone far enough and so hedges were introduced against all remaining foreign currency exposures towards the end of the month," says Woodford.

Not a lot has changed as far as the outlook for the US or global economy is concerned"As with all investment decisions, this reflects a long-term view - we have no insight into what will happen to sterling on a three-month view, but on a three-to-five-year view, we no longer expect further material weakness in the domestic currency."

A Trump presidency is nothing to be feared, according to Woodford, who thinks a US recession is unlikely. However, "it would be wrong to get carried away" with the stampede out of US Treasuries into sectors that would benefit from more government spending.

"At the margin, a Trump presidency probably does mean more spending on infrastructure but this needs to be seen in the context of an already highly constrained fiscal position and some elements of the Republican Party that will be very resistant to fiscal stimulus and/or tax cuts," he writes.

"'Campaign in poetry, govern in prose', as the saying goes and, whilst it's difficult to describe anything that we heard in the run-up to the election as poetry, the reality of a Trump presidency will likely be more moderate than was suggested by the campaign.

"In other words, not a lot has changed as far as the outlook for the US economy is concerned, nor indeed for our view of the global economy."

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.