Having sold the last of his mega-cap tech stocks in November 2020, Felix Wintle, manager of the VT Tyndall North American, has added back Meta and Alphabet into his portfolio.
Speaking in an interview on PA+, Wintle (pictured) said that while he remains generally cautious on the prospects for the so-called FAANG stocks, a re-acceleration in online advertising had boasted the appeal of Alphabet and Meta on a tactical basis.
“These two companies dominate in the online advertising space, so if it’s a theme you want to play, they are the only two stocks to go for, and on 11 May we added them back to the portfolio,” he said.
“The reason we haven’t owned them in the past two years was because there was a serious deceleration in online advertising and the actions taken by Meta’s CEO Mark Zuckerburg, which saw him invest billions in the Metaverse, which was a move badly received by investors and Meta fell 77% in about 12 months,” he added.
On top of the growth in advertising spending, Wintle adds that both Alphabet and Meta are plays on the AI theme, with Alphabet recently launching its own AI platform called Bard, which many commentators are already saying is better than ChatGPT.
“This is the gravy on top of the more fundamental case for these stocks, but it’s a very exciting time to have some exposure to AI,” he said.
Wintle has built the two positions to 3% each, since adding them back into the tactical part of the portfolio in May but does not anticipate adding back any other of the FAANG stocks.
Instead his top holding in the fund is currently Liberty Media, which is the owner of the Formula One franchise, while he also owns Take-Two Interactive, owners of Rockstar Games, which is set to release Grand Theft Auto 6 soon. These two holdings are held in the core part of the portfolio, which makes up about 50% of the fund.
“It’s (the fund is) about finding new ideas, new secular leaders and new product cycles and this is something we are very excited about,” he said.
“It’s not always easy not owning the largest companies in the index, but I feel what my investors want from me is high conviction in new ideas and not necessarily just owning things because they are large parts of the index and just because they happened to have gone up in recent months,” he added.
