View the article online at http://citywire.co.uk/money/article/a527070
Top Stocks is not a portfolio, but it's a great tool
Why we think Citywire Top Stocks is exciting.
It was great to see the Financial Times write about Citywire Top Stocks at the weekend. Following what the best fund managers are doing has always been a key tenet of Citywire, and it’s good to see the message getting a wider airing.
However, there was just one aspect of Matt Vincent's article I wanted to clarify. We are not presenting Top Stocks as a portfolio. I totally agree with the advisers quoted in the FT Money article who say dealing costs and tax would make buying all 37 stocks prohibitively expensive.
That said, I must admit we did consider presenting it this way early on in the project. This is because we noticed that the compilation of top 10 holdings from the five fund managers did beat the FTSE All Share. For example, our back testing shows that from 30 September 2008 to 31 August 2011 Top Stocks gained 16.35% compared to 6.91% from the FTSE All Share.
However, I stress that performance is theoretical and could not be achieved by a private investor who would bear dealing costs and stamp duty.
What we are doing is presenting Top Stocks as a generator of investment ideas. Even if many of the companies are familiar to you, I think you’ll find it fascinating to see that GlaxoSmithKline (GSK.L) is so widely held by our panel of fund managers; or that Weir (WEIR.L) is the top holding of Nigel Thomas’s AXA Framlington UK Select Opportunities; or that GKN (GKN.L) is the biggest position in Edward Legget’s Standard Life Investments UK Equity Unconstrained fund.
Of course the timing of our launch could have been better. You couldn’t imagine more volatile or stressed out markets as the eurozone crisis peaks. We had no control over that, obviously. Anyway, you could argue – I know many of you do – that this is precisely the time to be looking for investment opportunities, when so many investors are scared. Things look very bad right now but sentiment could improve rapidly if a solution to the debt crisis is solved soon. In this respect it is interesting that Top Stocks guides you to some of the FTSE giants, like Glaxo and Shell, which have strong balance sheets and pay good dividends and as a result look resilient in times of trouble.
What Top Stocks doesn’t do is tell you whether any of the shares are worth buying. It simply shows what stocks the five managers have in their top 10, many of which will have been long-term holdings.
This is where our editorial coverage kicks in. For me, one of the most exciting things about Top Stocks is the chance it gives us to focus our coverage and analysis on stocks we know to be significant. This is our form of ‘data journalism’. Each day we will provide a digest of Top Stocks news and highlight analysts’ comments on the companies too. We’re looking forward to hear your comments and opinions too.
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Andrew Friend, acting co-manager*, and Marcus Langlands Pearse, co-manager of the Henderson UK Property Unit Trust (HUKPUT), provide an overview of the key risks and opportunities for the UK commercial property market.
More about this:
Look up the shares
Look up the fund managers
More from us
- Top Stocks: a message from Derek Stuart in these stormy markets
- Top Stocks: real engineering, not financial engineering
- Top Stocks: why Glaxo, Galliford, Resolution & Weir are special
- Citywire Top Stocks
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