Charles Webb has been investing in shares for just over 10 years. He started investing through Nationwide’s share dealing service back in 2008, and has since built up a diversified investment portfolio that includes FTSE 100 shares, start-up companies, precious metals, buy-to-let property and some cryptocurrency holdings.
He says: “Overall I have a SIPP, a shares ISA, a cash ISA and a couple of smaller workplace pensions. It’s a mix of retirement planning (via the SIPP) and saving for a rainy day with my ISA.” He says diversification is important which is why he has invested in a range of other assets such as property and commodities.
Charles, who is in his early 50s and works as a project manager in the advertising industry, has increasingly looked towards companies that take their corporate responsibility seriously, particularly in relation to issues like climate change.
He says: “Initially, when I started investing I was buying shares that looked liked being good long-term holds and offered decent dividends.” At the time oil companies fitted this criteria and seemed good long-term bets.
However his views of this have changed in the last decade. Charles adds: “I have sold all my shares in the oil and gas company Shell for example and moved into renewables instead. I also won’t invest in tobacco, gambling or armaments.”
Wind Turbines
Charles recently moved to Wales with his partner, who works as an ecologist. He says that investing in renewables is not only good for the planet but has proved to be good for his investment portfolio, with some of these renewable investments being among his most profitable holdings in recent years.
For example. he has a holding in Siemens Gamesa Renewable Energy (SGRE), a leading manufacturer of onshore and offshore wind turbines. This company, which was formed from the merger of Siemens Wind Power and Gamesa in 2017 now has the second highest installed capacity of turbines in the world.
Demand for renewable energy has driven sales of its main product and its share price in recent years. However, stiff competition among manufacturers in this market has hit profits.
At the start of 2015 shares in the company were trading at €7.90, before rising over the next few years. Share prices then climbed steeply during 2020 in the wake of coronavirus pandemic – which caused a significant drop in the price of many fossil fuels. At the start of 2021 shares were trading at a high of €37.21 although they have since fallen back, and are currently trading at around the €18 mark.
Morningstar gives the stock a 3-star rating, and says competitive pricing pressure among wind turbine manufacturers has placed a large emphasis on cost-saving programmes to increase Siemens Gamesa’s profit margins, which have consistently lagged its closest competitor Vestas (VWS).
Morningstar analysts add: “A new management team has been tasked with a newly initiative restructuring programme focusing on product innovation and cost optimisation. As we shift towards a subsidy-free environment, we believe a combination of these factors need addressing to restore profitability to the group.”
Astra and Reckitt
Another one of his stronger holdings in recent years has been the pharmaceutical giant AstraZeneca (AZN), which is associated with the rollout of the coronavirus vaccine in the UK. The share price in this FTSE-listed company has grown steadily over the past 10 years, giving investors total annualised returns of 17.65% over the past five years and 12.99% over the past decade. In both cases, this is more than twice that of the FTSE 100.
Morningstar points out that the company has built a leading presence in the pharma and biotech industries with a range of patent-protected drugs, and a pipeline of new products to replace those where patents are running to an end. As a result it is has a wide economic moat, meaning its markets are well protected from competitors.
Elsewhere Charles has made investments in the hospitality start-up Tipjar, via Crowdcube. Against these higher-risk single company holdings he also has invested in iShares Core FTSE 100 ETF (ISF), which has a Morningstar Analyst Rating of Bronze.
These various investments are mainly held through his SIPP and ISA, both of which he has with AJ Bell.
Charles says: “When buying individual shares it’s easy to get swamped with information which makes decisions difficult. I’ve had a few bad performers in my portfolio, for example Reckitt Benckiser. He says his shares in this company, which manufactures a range of household and personal-care brands, such as Calgon and Lysol, have been underwhelming.
He adds: “I also bought one GameStop Corp Class A share at the absolute top of the market. My lesson from this was don’t do meme-stocks unless you get in right at the start.”
Over the years Charles has learned not track prices on a daily basis. “The best thing is to do your research in advice, choose your stock and then forget about it. Looking at prices everyday is a path to madness.”
