For this year’s Xmas investment tips competition none of our experts predicted a Russian invasion of Ukraine, unsurprisingly, so most of their picks are in the red.
However, three of the tips have shrugged off the wider woes of the stock market and advanced against the flow of the crowd.
And there’s a good reason why all three have made progress.
Currently leading this friendly competition is the pick from Neil Wilson, market analyst at Markets.com, who selected SARK ETF, or to give it its full name, Tuttle Capital Short Innovation ETF.
This exchange-traded fund is a way to short Cathie Wood and her ARK Innovation fund, aka ARKK.
And the reason it’s done well is that ARKK has fallen this year, as Wilson predicted in the original story. More precisely, he said Tesla, which was and remains the ARKK ETF’s largest holding “has to massively derate sooner or later” and that he rightly predicted that tightening from the Federal Reserve “should impair the fund and higher inflation and higher rates should mean these big long-growth disruptors are squeezed”.
Priced at US$37.2 on publication, the SARK ETF has risen almost a third since Xmas.
In second place is another fund pick, with financial trader Vince Stanzione having chosen the Invesco DB Agriculture Fund, which is up almost 15% since. (As this fund cannot be bought by many UK investors, his backup tip of the Wisdomtree Agriculture ETF is even higher, almost 24%.)
Stanzione, who also came second in last year’s contest, suggested these funds, which are effectively tracking the prices of a ‘basket’ of agriculture commodities would do well as prices “are still very depressed” even more so if also factoring in expected rises in inflation and food prices in 2022.
Inadvertently both the ETFs have taken a leg higher since Russia went to war in Ukraine – two major food-producing nations – but even before the invasion the funds were up around 9% and 12% respectively.
As Stanzione said: “Agriculture commodities are not tied to the stock market, so even if stocks are weak they can move higher, after all we still need to eat!”
In third place is Peter Sleep, senior investment manager at 7 Investment Management, with his tip of Ruffer Investment Company Ltd (LSE:RICA), which is up 5.5% since publication.
Sleep, who also took the bronze medal last year as well, prefaced his tip with a sage prediction: “If the markets do well this pick will put me last in the list.”
As he said, Ruffer’s intention with the fund is to do well in extreme adverse events, by holding a selection of index linked bonds, gold and derivatives, with the investment trust adding “real diversification” to one’s portfolio.
Fresh data from investment platform has shown it has been one of the most popular investment picks for ISA investors in the past month (https://www.proactiveinvestors.co.uk/companies/news/978748/inflation-protection-and-leaning-into-volatility-the-key-trends-for-uk-fund-investors-ahead-of-isa-deadline-978748.html), as investors seek wealth preservation.
But for the other 12 tips there’s still over eight months to go before the winner is decided. See below for some up-to-date thoughts from the contributors.
(Starting prices were as of 11am in London on 29 December and latest prices were taken on Thursday 14 April)
- Apple – Victoria Scholar @ Interactive Investor
- Tip price US$179.29, latest price: $167.66
- Cordel Group – Andrew Hore @ AIM Journal
- Tip price 11p, latest price tbc 10p
- CRH – Danni Hewson @ AJ Bell
- Tip price 3,906p, latest price 3,016.5p
- Games Workshop – Dan Lane @ Freetrade
- Tip price 10,080p, latest price 7,685p
- Invesco China Equity – Darius McDermott @ Fundcalibre
- Tip price: 786.95p, latest price 690.49p
- Invesco DB Agriculture Fund – Vince Stanzione, financial trader
- Tip price: US$19.77, latest price $22.68
- Legal & General – John Kingham @ UK Value Investor
- Tip price: 297.8p, latest price 270.7p
- Metahero (Hero token) – Andy @ Operation Crypto
- Tip price: US$0.1404, latest price $0.0397
- Micro Focus – Peter Higgins @ Conkers Corner
- Tip price: 409.2p, latest price 404.5p
- Purplebricks – Oliver Haill @ Proactive Investors
- Tip price: 24.3p, latest price 22.5p
- Ruffer Investment – Peter Sleep @ 7 Investment Management
- Tip price: 291p, latest price 307p = up 5.5%
- SARK ETF – Neil Wilson @ Markets.com
- Tip price: US$37.2, latest price US$49.14 = up 32%
- Unilever – Chris Beauchamp @ IG
- Tip price: 3,996p, latest price 3,423.5p
- Vanguard US Equity Index Fund – Maria @ The Money Principle blog
- Tip price: 77,834.58p, latest price 74,806.78p
- VinaCapital Vietnam Opportunity – Dan Wilderness @ The Financial Wilderness blog
- Tip price: 518p, latest price 511p
Dan Lane at Freetrade on Games Workshop Group PLC (LSE:GAW): "Nothing tempts fate like putting your name to a stock. Would I change my pick though? No. Supply chain sluggishness has been a big issue for GAW but as those disruptions ease (the World Container Index is already coming down), the market might realise the core investment case is still intact. With inflation riding high, the shine has come off discretionary items like those in GAW’s arsenal but Warhammer fans are steadfast. Even with a hike in staff and shipping costs, gross margins in November were still 70%. The market has been indiscriminate in selling off names that could be victims of consumer belt-tightening but with GAW, this presents huge opportunity. Its fan base might turn out to be less flaky than the market thinks - 70% gross margins aren’t to be sniffed at and suggest a bit more pricing power than is factored into shares at the moment. If it can hold onto those high margins and really make the most of video game IP royalty this year, the current price could turn out to be achingly cheap."
John Kingham on Legal & General Group PLC (LSE:LGEN): "L&G's recent 2021 results showed a strong post-pandemic recovery and the dividend was increased by 5%. I expect that sort of dividend growth to continue, so the current dividend yield of almost 7% still seems very attractive."
Vince Stanzione: "I am pleased to say I am in the green. Being invested in agriculture has not been a bad place to be with wheat and corn being the top holdings of the DBA ETF up around 15%. The UK listed one has done even better AIGA thanks to exposure to soybean oil and soybean meal and is up 24%. I am happy to stay with both and I expect agricultural prices can still move much higher. Even if the Russian/Ukraine war is resolved soon, the agricultural market
remains in sever deficit for at least another 12 to 18 months and fertilizer and fuel prices (diesel and Nat Gas) used in farming will remain elevated.
Dan Wilderness on VinaCapital: "I spoke about this fund as potentially helping manage against geo-political risk - but I wasn’t particularly thinking of Russia as the one to emerge! I stand by the long term potential for both this fund and Vietnam, albeit if a key export market in Europe continues to face headwinds it will also limit growth through demand - but still a lot to like here."