The Share Challenge: Students' blue-chips set up early lead but veterans are unruffled

After just one week of trading, the students at the Moat College in Leicester have taken a decisive lead in our portfolio competition, outpacing both the experienced Lexar investment club and the City expert, Sean O'Flanagan, of the Unicorn fund managers.

The 15-year-olds were the only team to finish the week in profitable territory, booking a respectable one per cent profit, as their blue-chip stocks proved more resilient in volatile market conditions than the small-caps favoured by the other competitors.

Should the veteran stock pickers be worried? "It's still too early to make any judgement calls," stresses Mr O'Flanagan, after his portfolio finished the week down three per cent. "We are 0in this for the long term. Anything can happen in a week."

On the first day of trading, the students jumped into the lead, comfortably retaining their top position throughout the week. "They are taking the competition very seriously. They are quite confident they can win this," says Claire Jackson, the team's teacher. "They reckon they can double their money in as little as four months."

Their larger stocks, most notably in the banking giant HSBC, provided the bulk of their gains. WH Smith also performed nicely, clocking up a three per cent rise.

Mr O'Flanagan spent much of the first week of the competition in last place, eventually crawling into second place.

A buy-and-hold advocate, he shrugged off early losses and remains confident in his portfolio's long-term strength.

"It's impossible to make a judgment call so early in the game," said Mr O'Flanagan, who says his stock picks are all solid names that have slipped in line with much of the market this week. His portfolio suffered from poor performances by Harvey Nash, the recruitment specialist, and Morse Holdings, the information technology services provider, which both dropped seven per cent over the week. Mr O'Flanagan's portfolio includes shares owned by the Unicorn Free Spirit Fund.

The Lexar investment club started off on a good clip, only to suffer when Bookham Technologies, the optical telecoms equipment maker, warned that first quarter earnings would be hit by the weakened dollar. The news sent the stock plunging 13 per cent. Overall, the club's portfolio was down four per cent for the week. But the club's other picks performed reasonably well.

If you fancy taking on the teams with your own fantasy portfolio, visit the Independent Share Contest website at www.bullbearings.co.uk.