Four ‘summer sizzlers’ in Elite Rated portfolios

Sam Slator 31/07/2018 in X Strategy

Research by ABTA* last year found that the average number of holidays per person in Britain has grown to 3.8 per year. When asked about plans for 2018, the UK was the most popular destination overall with two thirds (66%) planning a UK break. Those that opted for a staycation have certainly been rewarded with the driest summer in 57 years.

After a brief respite and some much needed rain last weekend, the good weather is forecast to continue, so we asked four Elite Rated managers, which ‘summer sizzlers’ they have in their portfolios.


L’Oreal, Threadneedle European Select

With all this sunshine, preventing sun burn is top priority for many. So what better place to start than L’Oreal, which produces SPF 15-50+ lotions and moisturisers to protect skin from the sun’s rays. It’s a top ten holding for Elite Rated Threadneedle European Select fund.

Mark Nichols, co-manager, said: “We have held L’Oreal, the world’s leading beauty company, since 2012. The business has a strong track record of organic growth, and has taken market share across different categories around the world. Alongside L’Oreal Paris, it owns brands as varied as Maybelline, Kiehl’s and Yves St Laurent, which allow it to serve more than one billion consumers across different price points.

“L’Oreal has numerous competitive advantages given its scale, portfolio of brands and digital expertise, which have enabled the company to deliver attractive returns over the long term.”


easyJet, Smith & Williamson Enterprise

For those looking to holiday further afield, it’s likely you’ll be off to the airport. easyJet is a top 10 holding in Elite rated Smith & Williamson Enterprise.

“easyJet’s recent trading statement confirmed that 2018 should be a strong year, with the company benefiting from less competition,” commented Mark Swain, co-manager of the fund. “As the likes of Monarch have fallen by the wayside, capacity has come out of the market, which has helped to boost easyJet’s load factors.

“The company has also benefited from ‘self-help’ as it has done a good job encouraging passengers to pay for seat upgrades or other extras, which has helped to boost average revenues per seat.

“Admittedly, some of the factors that have helped easyJet are one-off in nature, and in the longer term rising fuel prices are likely to be a headwind for the stock, unless these can be offset by revenue-enhancing or cost reduction measures. However, it is a very well run business and crucially tends to be both punctual and reliable in terms of departure and arrival times compared to other no-frills carriers.

And, while the UK consumer is undoubtedly under pressure, we think that the majority of Brits will cut other areas of ‘big ticket’ discretionary spending before they forego the annual holiday.”


Britvic. JOHCM UK Dynamic

Alex Savvides, who runs the Elite Rated JOHCM UK Dynamic fund, holds FTSE 250 beverage company Britvic in the portfolio. The company is home to no fewer than 27 soft drink brands including J20, Pepsi Max, 7UP and Tango – perfect to help you keep hydrated in the hot weather.

“I have held Britvic in my portfolio since 2013, after the arrival of a new CEO (often the catalyst for the positive change I look for in the companies I invest in),” he explained.

“My investment case was based on Britvic’s underappreciated international potential, something which was quickly addressed after it signed a bottling and distribution agreement with Pepsi Americas for Fruit Shoot.

“Later acquisitions of Brazilian juice businesses Bela Ischia Alimentos and Ebba have also provided good cost and revenue synergies.”


Unilever, M&G Global Dividend

British-Dutch consumer goods company Unilever is a top 10 holding in Stuart Rhodes’ M&G Global Dividend fund. The FTSE 100 company owns several delicious brands to keep you cool this summer including Ben & Jerry’s, HB Ireland’s Ice Cream and Magnum.

Stuart said: “Unilever has a genuine growth story which differentiates the company from its peers. While many consumer staples businesses have seen their growth rates deteriorate, Unilever has continued to deliver.

“The company has a strong brand portfolio, a broad distribution capability with a significant presence in emerging markets, and a disciplined management team committed to returning generous amounts of cash to shareholders.”

*The ABTA consumer research was conducted by Arkenford Ltd ( who specialise in leisure and tourism market research. The ABTA Consumer Trends survey generated responses from a nationally representative sample of 2,000 consumers using an online research methodology and related to holiday booking habits in the 12 months to August 2017. Fieldwork was conducted in August 2017.

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