Now that we’re in the 23/24 tax year and investors have their ISA contribution limit reset to £20k until next April, we asked our contract writers if they’d be willing to share the one equity that makes up the largest position in their Stocks and Shares portfolio today.
Without further ado, here are a selection of their top long-term buy-and-hold investments!
What it does: Alphabet owns Google and other digital properties including YouTube as well as incubating new tech businesses.
I realise there are risks, from an advertising downturn hurting revenues to the growth of AI reducing demand for search services. But Alphabet is a massively profitable business with a large user base.
Those users have invested time and effort in using its services, making many of them unlikely to switch even if they could find a competitor. In reality, Alphabet is the clear market leader in key areas, such as search. It has proven it can monetise its business model, technology and brands to great effect. I expect that to continue in future.
Fears about the impact of AI have pushed down the Alphabet share price over the past year. I have taken advantage of this to load up my ISA with the shares.
Christopher Ruane owns shares in Alphabet.
What it does: Alphabet is the parent company of Google and several other businesses that include YouTube, Waymo, Deepmind, and more.
By John Choong: Alphabet is one of the world’s few hybrid growth and defensive stocks. It boasts plenty of growth avenues such as its Cloud service, YouTube, and AI-related capabilities, while having an impenetrable economic moat as the world’s biggest search engine.
Sceptics were quick to write Alphabet off when Microsoft launched its ChatGPT-powered Bing. Nonetheless, Google has since come back with an array of its own AI offerings. Most of these haven’t shown much of a competitive advantage. However, it’s worth noting that user numbers continue to tick up for Google despite not deploying its world-class AI functions yet.
And given Alphabet’s war chest of developments and an impeccable financials, I’m confident that the group can continue developing its offerings while retaining its status as the world’s dominant search engine. Pair that with its valuation multiples trading near decade lows, and I’ve been taking the opportunity load up on Alphabet stock.
John Choong has positions in Alphabet.
Advanced Micro Devices
What it does: AMD is a semiconductor company known for its chipsets that power everything from PCs to the PS5.
I began adding AMD to my Stocks and Shares ISA last year, and it has quickly become my largest holding. I bought the shares based on the excellent performance of the company’s CPU and GPU products.
AMD has been consistently chipping away at Intel’s CPU market share since 2017, and I’m confident that the company will continue to do so. Furthermore, AMD stands to benefit greatly from the rise of AI as companies scramble to purchase the hardware they need to run it.
As I’m more than 20 years from retirement, I want to maximise my Stocks and Shares ISA with growth shares. I’m confident that AMD will continue to do that for me over the next decade.
Matt Cook owns shares in AMD and Intel.
Bank of America
What it does: Bank of America is one of the largest banks in the US. It has both retail and investment banking operations.
By Stephen Wright. I think that investing well is about being aggressive and decisive when share prices are reflecting unjustified pessimism. That’s why Bank of America (NYSE:BAC) is the biggest holding in my Stocks and Shares ISA.
Since the start of the year, the stock has fallen by around 15%. As a result, it’s reached a level where I think it’s a rare opportunity, so I’ve been buying the stock lately.
There’s been quite a bit of uncertainty across the banking sector during March. But I don’t think this has adversely affected Bank of America at all.
In fact, the opposite might be true. As customers have been pulling their money from regional banks in fear of liquidity issues, they’ve been depositing them with the larger institutions.
A large base of customer deposits allows Bank of America to make money. And it looks to me like that just got bigger.
Stephen Wright owns shares in Bank of America.
What it does: Burberry is a luxury British fashion brand that’s known for its trench coats and distinctive checked designs.
At that time, global travel was still recovering from the pandemic. Lockdowns in China were also creating difficult trading conditions in one of the company’s most important markets.
Burberry’s depressed share price reflected these short-term challenges. I decided that this had created a buying opportunity. I thought the company’s luxury brand and high profit margins would probably drive fresh growth when shoppers could travel freely again.
This has turned out to be correct — store sales rose by 11% during the final three months of 2022, excluding China.
As market confidence has recovered, Burberry’s share price has risen steadily. As a result, my holding has grown from a mid-sized position in my portfolio to become my largest holding.
I’m unlikely to buy more at the current price, but I’ve no plans to sell.
Roland Head owns shares in Burberry.
What it does: CVS Group operates more than 500 veterinary surgeries alongside diagnostics centres and pet crematoria.
Since I first invested in early 2020, the veterinary services business has risen more than 50% in value. I have since gone back to the well twice to increase my holdings. And the strength of recent trading is stimulating my appetite to buy more shares.
The company — which operates vet surgeries in the UK, Ireland and The Netherlands — saw like-for-like sales rise 7.5% in the six months to December. This was just off the top end of its organic growth target of 4% to 8%.
I think CVS is a great safe-haven share to own. The amount people spend to keep their pets fit and healthy remains robust at all points, even when household budgets come under pressure.
And as the AIM business continues to build scale through acquisitions, I expect earnings to steadily rise.
Royston Wild owns shares in CVS Group.
What it does: Glencore is one of the world’s largest natural resource companies with operations across six continents.
By Andrew Mackie: I bought my first tranche of Glencore (LSE: GLEN) shares at the depths of the pandemic crash. Since then, its share price has appreciated far beyond my expectations. However, rather than sell out, I have continued to buy more during significant market sell-offs. Today, it accounts for 10% of my total Stocks and Shares portfolio.
It is first and foremost a growth stock, a fact often overlooked by the market. As a commodities business, most analysts track key metrics from its mining operations over a short time horizon. I don’t believe that’s the correct way to value this business, however.
My conviction on this front has been borne out by the recent proposed merger with Canadian metals producer Teck. To date, this has been rebuffed. Regardless of the outcome here, I remain bullish on Glencore’s long-term prospects.
I have for some time held the view that we are entering a golden era for commodities producers. Glencore is perfectly placed to benefit in the world’s push for net zero. The fact that it is the largest holding in my portfolio reflects its unique position in producing, recycling, sourcing, marketing and distributing the commodities that will enable decarbonisation to become a reality.
Andrew Mackie owns shares in Glencore.
What it does: Mastercard is a payments-processing company. It is the second-largest payments business in the world.
By Edward Sheldon, CFA. At present, the largest holding in my Stocks and Shares ISA is Mastercard (NYSE: MA). This is not my largest position overall. That’s Alphabet. Yet within this account, the payments stock is top of the pile.
There are a number of reasons I’ve loaded up on Mastercard shares. One is that the company has enormous growth potential. In the years ahead, trillions of transactions are set to shift from cash to card. Mastercard will benefit from this.
Another is that the company has a strong competitive advantage, or ‘economic moat’ as Warren Buffett likes to say. As a payments network operator, it offers services that cannot easily be replicated by a new competitor.
A third reason is that the company offers inflation protection. As prices of goods and services rise, so do its fees, as it takes a slice of every transaction.
Now, Mastercard does have a relatively high P/E ratio. This adds risk. However, this is a high-quality business so I’m comfortable with the higher valuation.
Edward Sheldon has positions in Mastercard and Alphabet.
What it does: Meta operates some of the world’s largest social media platforms, including Instagram, Facebook and Whatsapp.
By Gordon Best. The world is more connected that ever, with social media usage continuing to grow, and rapidly increasing content creation. The core of this trend was Facebook, and although use of the platform is declining, others in the Meta Platforms (NASDAQ:META) family are seeing tremendous success. The company therefore has tremendous diversity and agility, with the ability to accommodate multiple demographics across a variety of products.
The company saw major declines in recent years as investors rejected an expensive metaverse experiment, with the share price now at a level many consider is well below fair value. As the company re-structures, and look to solidify its place as the number one social media group amidst competiton, many analysts have raised their expectations for future performance. I see plenty of untapped potential in Meta’s revenue streams, and once market sentiment improves, many investors will be desperate to pick up shares in Meta at historically low valuations.
Gordon Best owns shares in Meta Platforms.
What it does: Visa is a global technology company that facilitates digital payments in more than 200 countries.
By Ben McPoland. Warren Buffett recently noted that: “The weeds wither away in significance as the flowers bloom. Over time, it takes just a few winners to work wonders.”
He was speaking of his winning stocks, and I’ve also found the same to be true in my own portfolio. Over the years, Visa (NYSE: V) has blossomed into my biggest ISA holding.
The evidence for the company’s remarkable success isn’t hard to fathom – it’s everywhere around us. We’re all shopping online and paying on our cards almost constantly.
Visa takes a cut of every transaction that flows through its payments network. That includes currency conversion and cross-border activities, which admittedly does leave the firm vulnerable to events like a pandemic.
Still, its revenue was $30.1bn last year, with a profit margin above 50%! Plus, because it doesn’t lend, it’s not exposed to loan losses.
Enticingly, most of the world’s transactions are still cash-based. So as the world moves towards becoming a cashless one, Visa is poised to keep growing for decades to come.
Ben McPoland owns shares in Visa.
WisdomTree Physical Platinum
What it does: WisdomTree Physical Platinum is an exchange-traded commodity that provides investors with exposure to the metal.
Why is my biggest holding essentially a “pet rock” that sits idly – paying me no dividends and no rents?
Because I see a mismatch between supply and demand.
Let’s start with supply: 72% comes from South Africa, where labour strikes, power cuts and underinvestment are strangling production. Another 12% comes from Russia.
On the demand side, the metal is increasingly replacing its costlier sister, palladium, in automobiles’ catalytic converters.
The World Platinum Investment Council (WPIC) forecasts supply will be in a deficit of 556,000 ounces in 2023.
However, analysts warn the jewellery component – making up 24% of demand – is fickle.
But overall, I remain bullish – and I’m not the only one. Investment bank UBS predicts platinum’s price will run up by 20% before the year’s out.
Mark Tovey has shares in WisdomTree Physical Platinum.