My fantasy football and investing cheat sheet

Sporting fans have been spoilt this summer with the Euros, Olympics, Wimbledon and the 20-over cricket world cup. All have since come and gone, but thankfully we don’t have to wait long for more sport as the Premier League is back to entertain all us football fans this Friday.

Excitement and anticipation levels will still be high: every fan welcomes the clean slate and hopes this might be their year. However, as a Chelsea fan I’m not particularly confident as we’ve spent a lot of money again – and recent history suggests we have not done that well. There are a few Arsenal and Fulham fans in the office with a bit more confidence than me.

It’s also the week when many of us look to get our fantasy football teams in shape, as we go head-to-head with friends and office colleagues. I actually did quite well last year as my aim of striking a good balance between defence and attack (as well as adding the odd player who has gone under the radar) came good.

There are a lot of similarities between fund research and fantasy football: despite all the prep and due diligence, your best laid plans can go awry, so you need to be flexible. So here is a bit of a cheat sheet to make sure your fantasy football team and investment portfolio are both ready to go.

Flexible squad – don’t go too heavy on strikers

One of the biggest mistakes fantasy football players make is going too heavy on strikers. It was the famous football commentator David Coleman who once said “goals pay the rent”, so you can see why the star performers often hog the headlines. But you need a balanced squad to succeed, be it a midfielder who creates and scores or a defender who keeps a clean sheet and pops up with the odd goal themselves.

You want the same with an investment portfolio – the ability to switch positions and be as flexible as possible, meaning they can perform in any market environment. A good option here would be the likes of a multi-asset fund like Rathbone Strategic Growth Portfolio, which is one of the new breed of portfolios that target risk and then look to maximise returns. The fund aims to deliver a greater total return than the Consumer Price Index (CPI) measure of inflation +3%, after fees, over any rolling five-year period by investing across actively-managed funds and investment trusts, as well as passives and direct equity holdings.

Manager David Coombs uses a disciplined asset-allocation framework and a forward-looking assessment of correlation, risk and return as the cornerstone of the investment process. Asset classes are then divided into three distinct categories: liquidity, equity risk and diversifiers to create a balanced portfolio.

Transfers – don’t use too many!

Transfers are a tool to reinvigorate your team if the opportunity arises – but you must use them wisely or you end up losing points. Only use them if a player is injured or consistently underperforming (at a time when they should be delivering!) and there is a suitable replacement on offer.

It is the same in the investment world. We only have to look at the recent volatility in markets to know that “time in the market, not timing the market” is what matters most.

Read more about the recent market volatility

A good fund to consider if you are worried about the wider market noise is Polar Capital Global Insurance. This fund typically invests in 30 to 35 companies. Clearly, exposure is entirely to insurance firms, but the fund rarely invests in life assurers, believing its remit is to provide exposure to companies in the specialist non-life, casualty and risk sectors.

Managed by Nick Martin, it has proven its ability to demonstrate alpha in all market conditions. Insurance is a low beta sector and tends to be less volatile than the wider market. That has been reflected by the fund’s performance: it has produced a positive return in nine of the past 10 years, with its only year of underperformance coming in 2020, when it fell 5.6%*.

Captain pick – go defensive 

The player you choose to be captain each week will score double the amount of points. It should usually be someone obvious (the likes of Erling Haaland or Mo Salah), because they will be owned by lots of participants. It is essentially a defensive pick to make sure you don’t lose ground – so it needs to be steady and certain.

A good option here would be JOHCM Global Opportunities. This fund has historically been amongst the least volatile in the IA Global sector. Manager Ben Leyland has a strong bias towards larger and medium-sized multi-national businesses in his portfolio, which typically holds 30-40 stocks.

The philosophy of this fund is ‘heads we win, tails we don’t lose too much’, and if markets do struggle, we feel the fund’s strict valuation process will help in this regard. The fund also can, and will, hold large cash positions if valuations are unattractive. It has returned 211% in the past 10 years**.

Fixture swings – be prepared for changes

One thing you do have to prepare for is fixture swings. This is when a team initially has a good set of fixtures for a few weeks, only for them to then run into a number of more challenging fixtures. You’ll often find there is another team where the opposite is true (their fixtures get a lot better when the first team’s become more difficult). But if you have both in your squad you can mix and match as you see fit.

It’s like style swings in the investment world, where growth and value investments swing in and out of favour. Investors could choose a style-agnostic portfolio, or mix between a growth-led portfolio, such as T. Rowe Price Global Focused Growth Equity, or a value fund like Schroder Recovery, which targets companies valued at less than their true worth and are waiting for a correction.

Read more: Value vs growth: which is best?

Dual purpose performers

“Attack wins you games, defence wins you titles”. Another quote – this time from another legendary manager, Sir Alex Ferguson.

In fantasy football, defenders get points for clean sheets. But the real standouts are the ones who can not only defend, but also contribute at the top end of the pitch with goals and assists.

In the investment world you have a number of funds which have not only delivered excellent long-term capital growth, but also offer an attractive dividend to investors. Examples include Man GLG Income, which is up 47% in the past five years*** and yields almost 5%^, or, on the fixed income side, the likes of Aegon Strategic Bond, which has returned almost 20% in five years*** and yields 3.9%^.

New players on the block!

There is always a player or two who is new to the league and is available at an excellent price. Last year it was Chelsea’s own Cole Palmer, who ended up being one of the highest-scoring players in the game. Get them early and you can get the full upside of their performance.

Launched in December 2023, Artemis Leading Consumer Brands aims to grow capital over a five-year period by tapping into the earnings potential of the emerging middle class and changing consumer demand through investing in leading consumer brands. The management team looks for underlying brand strength that creates strong barriers to entry, giving the companies that own them pricing power.

Wildcard

While changing your whole team two weeks into a season might help revive your fantasy football team, doing this with an investment portfolio is perhaps not the most sensible choice. We will leave it there.

*Source: FE Analytics, total return in pounds sterling, from 2014 to 2024

**Source: FE fundinfo, total return in pounds sterling, 12 August 2014 to 12 August 2024

***Source: FE fundinfo, total return in pounds sterling, 12 August 2019 to 12 August 2024

^Source: FE fundinfo, 13 August 2024