With only six weeks to go until the end of this year's Share Competition, our professional fund manager Colin McLean – the chief executive of SVM Asset Management – looks to have the game sewn up.
When the competition began in February, none of the competitors knew they would face some of the most testing market conditions in history. And perhaps it's no surprise that the professional was the only competitor who had the mettle to deal with them. Amazingly, his portfolio is down just 5 per cent since 1 February, compared to a fall in the FTSE All Share of almost 30 per cent. The school pupils from Leicester's Moat Community College are only a shade behind the index – down 32 per cent. But the Birch Investment Club – made up of employees at Britain's largest lime producer, Singleton Birch – are down almost 60 per cent, and will struggle to get back into contention before the game ends on 31 January.
Colin McLean, SVM Asset Management
McLean has been by far the most nimble, sometimes holding positions for just a few days before taking profits and reallocating his portfolio. Over the past three months, he's been particularly active in battered banking stocks. Although he made some profits here, his losses have so far outweighed these. Since we last looked at his portfolio in October, he has held firm on four of his five holdings – GlaxoSmithKline, AstraZeneca, British Energy and Unilever – although he has varied the size of these positions as the markets have moved.
"These are all holdings we have in our main portfolios, and we still believe they're too cheaply valued," McLean says. He expects to stick with these four, barring any disasters, through to the competition's close.
The fifth spot in the portfolio has been the place for experimentation. After selling Imperial Tobacco at a good profit, McLean dabbled in Royal Bank of Scotland, HBOS and Trading Emissions, but none of these has produced the results he was looking for.
McLean expects conditions to stay tough into the new year, predicting that the banks may need more financial aid. But he's shown that he has the ability to weather such conditions; his hedge funds are up 23 per cent for the year, outperforming the market by more than 50 percentage points.
Moat Community College
The students have been busy with work experience over the autumn term, and haven't put much time into managing their portfolio. Since we last caught up with them in October, they sold their holding at JKX Oil and Gas at a hefty loss, and have replaced it with Aquarius Platinum – a mining stock that they dabbled in without much success earlier this year, but which is now turning a profit for them.
For the last six weeks of the competition, however, they plan to go all out – turning over most of their portfolio in the hope of picking out a few high-octane stocks to help them close the yawning gap to the fund manager.
The South African gaming group, Gaming VC, is among new recruits to their portfolio, as are the directories group Yell and the telecoms group Telent. Will these choices provide them with the boost they need?
Birch Investment Club
Having lost more than 50 per cent of their portfolio's value by October, the Birch Investment Club has, alas, given up on any dreams of glory.
Prior to October, the club had lost most of their money on two bad bets – HBOS and the Western Canadian Coal Corporation. Banking and commodity stocks have been hit hardest over the past six months, but rather than selling out and turning their attention elsewhere, they decided to hold on to both stocks in hope of a recovery that has not materialised. Quite the opposite, in fact; Western Canadian Coal has seen its share price lose another two-thirds since the end of October. The holding has cost the club almost £700 in losses. HBOS and Royal Bank of Scotland, another member of the portfolio, have simply flatlined since October. Overall, the portfolio is down almost 60 per cent.
The Share Competition is sponsored by Abbey, and the game platform is provided by bullbearings.co.uk. Follow the race at www.bullbearings.co.uk/independentReuse content