First off, a cracking comment which well and truly put a smile on my face this cold January morning.

As you know, there are many very intelligent investors out there who are trying to mount the argument that digital currencies are the next safe havens and a rival to gold. Let’s ignore the issues around volatility and dropping prices – digital currencies apparently have become more popular since the rise in geopolitical risk.

Or that at least is the view of the excellent Iqbal V. Gandham, UK MD of multi-asset investment platform, eToro.

He’s said that

Interest in Bitcoin as a potential safe haven investment surged following the US assassination of Iranian general, Qasem Soleimani, earlier this month. There was a 46% increase globally in the amount of opened Bitcoin positions on the eToro investment platform compared to the average in the previous three months. Since then, Bitcoin’s price has risen by 15.7% as demand for the crypto assets has grown and there has been increased interest in other cryptoassets. “This shows that Bitcoin, and cryptoassets in general, are increasingly seen by some investors as a hedge in times of geopolitical crises”.

I can’t say I’m completely convinced by that argument but hey, who knows what goes on inside the minds of short term traders.

Battery stocks to hold  and the Wins 2020 list

I think I mentioned on this blog a while ago that the commodities equities team at Westbeck had launched an actively managed fund dedicated to investing in battery-related stocks. It goes without saying that I think what happens next to battery technology is one of the biggest stories of this decade. If we are going to manage decarbonization within a few decades, we need to figure out vastly more efficient and capable battery storage technology.

Anyway, the Westbeck fund though small, has now been up and running for a few months. According to fund manager will Smith the fund was up +2.5% net for December and is up +6.6% net since inception in July 2019.

“All four core sectors contributed positively over the month and stock-specific winners included Umicore (which benefitted from LT contracts from SK Innovation), LG Chem (potential spin out of battery division being considered) and SolarEdge (addition of residential storage units were well received). As we enter 2020, net exposure has been reduced, reflecting overbought market conditions as well as some concerning macro-economic data – however, we remain incredibly constructive on the opportunity set across the battery sub-sectors.”

Crucially the table below lists the top five holdings in this actively managed fund. Many of the stocks you’ll have heard about but Umicore and Lundin Mining are new to me. Worth researching.

Last but no means least, just thought I would share with blog readers the Model portfolio recently released by the investment funds team at Winterfloods, led by Simon Elliott. I’ve highlighted in bold the shortlisted funds where I agree!

  • In the UK Equities section of our portfolio, we are recommending Temple Bar and Dunedin Income Growth from the UK Equity Income sector, and Fidelity Special Values* and Baillie Gifford UK Growth* from the UK All Companies sector. Our favoured UK Mid & Small Cap plays are Mercantile* and Invesco Perpetual UK Smaller Companies.
  • For exposure to International Equities, we are recommending Bankers, Martin Currie Global Portfolio and Scottish Mortgage this year. For Europe, we have selected Fidelity European Values* and Henderson EuroTrust. Baillie Gifford Japan is our Japanese pick, while US exposure is through JPM American*.
  • For Asian exposure this year we have opted for JPMorgan Asian and Asia Dragon*, while JPMorgan Global Emerging Markets Income* and Templeton Emerging Markets* are our favoured Emerging Markets picks.
  • For specialist sector exposure we continue to recommend Allianz Technology* and Worldwide Healthcare* and have added BlackRock World Mining*. A number of Private Equity funds continue to offer value, in our view, and our favoured funds are HarbourVest Global Private Equity and Standard Life Private Equity*.
  • In our Bonds allocation, our preferences are City Merchants High Yield*, CVC Credit Partners European Opportunities*, BioPharma Credit, TwentyFour Income Fund and Real Estate Credit Investments.
  • Our Property recommendations are BMO Commercial Property*, Residential Secure Income and TR Property. For our Alternatives exposure, we have opted for HICL Infrastructure, BH Macro, Aberdeen Diversified Income & Growth and Personal Assets.