James Gard: Welcome to Morningstar. It’s coming up to the end of 2022 and that’s a good time to take stock of our investments. The FTSE 100 is set to end the year down around 1%, which isn’t a bad result considering. But some shares have done much, much better than the index. Anything to do with energy has done well of course, such as Centrica and BP and Shell. But the current leaders in the FTSE 100 are BAE Systems and Pearson. I’m calling them the 50 percent club because their shares are up by over a half this year. Their businesses couldn’t be more different: BAE makes miltary hardware and Pearson sells educational textbooks and training courses. In a year of war, it’s no surprise to see an arms manufacturer at the top of the list.
But what about Pearson? It’s emerged from the pandemic in good shape, seeing a rise in subscriptions and posting decent half-year figures in the summer. It’s also had a boost from dollar earnings through its North American divisions. And the company has also rebuffed takeover interest from private equity, which could resurface again next year. What about the bottom end of the FTSE 100? Persimmon and Ocado are part of the wrong 50% club, having lost around half of their value this year. As with all share price gains and losses, expecting a similar result next year would be foolish – a great year is often followed by a bad one and vice versa. For Morningstar, I’m James Gard.
