A month ago, we launched the Morningstar Fantasy Fund Manager League. We gave each of Morningstar's European editors an imaginary £10,000 to invest, pitting them against each other in a battle to see who is the best investor of the bunch.
And in what’s often thought of as a quiet time for markets, it’s been an interesting first month. Five of our portfolios are in profit, while four are down after the first 30 days.
Storming into the lead is UK senior editor James Gard, who has notched up an impressive gain of 8.65% in the first month. That’s perhaps no surprise when you delve into his portfolio. Shares in cyber security company Darktrace (DARK) are up an incredible 53%. Last month the firm reported that its artificial intelligence learning technology was stopping 4,000 cyber threats every day. Darktrace said in a market update that full year revenue was likely to grow by more than 40% to at least $278 million, and that it expects growth of around 30% for the coming year. The firm floated at 250p earlier this year and shares have already more than tripled to 764p.
Just one holding in James’s portfolio is in the red for the month; taxi app Uber fell 12.85% after investment giant Softbank announced it would sell its $2 billion stake in the business.
Risers and Fallers
Also of interest on our performance chart is Fernando Luque’s portfolio, which you may recall was split across just three stocks. His green line, which takes a very strange trajectory during the month, shows how influential the performance of each single holding can be when you have a concentrated portfolio.
One of his holdings is mining company Compass Minerals, whose share price shot up almost 17% in a single day in July after it identified a resource of 2.4 million metric tons of lithium brine at its site in Utah, a major boon for a company looking to service the growing US domestic lithium market. Compass finished the month up 16.18% while British-Airways owner IAG leapt 13%, no doubt helped by the continued unlocking of the UK economy, with more international travel now allowed just in time for summer holiday season.
Overall, Andrew Willis is currently at the bottom of the leaderboard, with his portfolio down by almost 7% in the month. He also takes the undesirable honour of holding the worst performing stock of the month, with Riot Blockchain down 16.49%, closely followed by NIO, down 16.2%. A fraught time for cryptocurrency has hurt the likes of Riot, and after stellar gains in the first half of the year, many of the most popular digital currencies have recently seen a setback in prices, not helped by China’s efforts to crackdown on the sector and a rumour that Amazon was to start accepting payment in Bitcoin (which the e-commerce giant was quick to refute).
Electric vehicle maker NIO is, you might think, primed for success given the global trend of electrification and increasing use of EVs. But, as our analyst Lorraine Tam has recently noted, there is a global semiconductor chip shortage currently and that impacts on firms such as NIO, which is already fighting to make a name for itself in an incredibly competitive industry. It's worth pointing out that NIO's shares did recover somewhat after we'd run our month-end data, which could affect the standings next month.
That chip shortage has, however, been a boon for several of our portfolios. ASML is one of the most widely held stocks across the group and climbed 7.66% in the month, while Taiwan Semiconductor gained a chunky 22.66%, the second strongest stock across all the portfolios.
Of course, it wasn’t all double digit returns and losses – plenty of stocks across the portfolios had a non-eventful month. LVMH, Cisco Systems, Orsted and Royal Bank of Canada all delivered a positive return of less than 1%.
We're only allowing trading once every three months so there are no changes to the portfolios at this point - our imaginary porfolio managers will have to wait until the end of September for their chance to buy and sell. We'll be back next month to see how they're faring.
As always, we are keen to point out that these are fantasy portfolios and absolutely do not constitute advice or recommendations, or indicate how editors would invest in the real world.
