The fund will reside in the specialist sector in order to allow the manager the flexibility to invest more than 20 per cent in overseas shares if he sees fit.

Woodford Investment Management is set to launch a new UK-focused fund that will aim to generate high levels of income while growing capital and maintaining a lower long-term risk profile. 

The CF Woodford Income Focus Fund will be rolled out 20 March, subject to regulatory approval. It will aim to deliver income of 5p per share in 2018, equivalent to a yield of 5 per cent in that calendar year on the initial launch price of £1 ($1.30). 

The fund will invest in a concentrated portfolio of market-listed securities, Woodford Investment Management says, and will initially focus mainly on the UK market.

The fund will be managed by Neil Woodford and will complement the firm's equity income strategy, Woodford Investment Management said. 

Full disclosure of the fund's portfolio and a breakdown of fees will be provided to investors on a monthly basis. Fund-related expenses will be accounted for in its annual management charge. 

“The level of income you can generate from an income-focused equity portfolio today is extremely attractive in the context of what is available from other asset classes,” said Mr Woodford.

He added: “The fund will draw on my long-held investment philosophy and reflect my investment convictions. It will have a more concentrated portfolio, with a focus on dividend-paying stock market-listed securities and no geographic constraints - allowing me the flexibility to capture income from international equities when, and if, appropriate.”