We have retained many shares from our 2013 portfolio. In total we have retained 8 shares and replaced 4 (Barclays, Exxaro, Samsung and Sasol). Again our share portfolio consists of 12 shares. This year we still lean towards global large caps. The shares are: AIG (American Insurance Group), Apple, Bank of America, BHP Billiton (world’s largest mining company), China Construction Bank, Coca-Cola, Google, Microsoft, Nestle, Pinnacle (IT),Toyota (Japan) and Volkswagen (Germany).
AIG: We expect AIG to continue the path of recovery of profits this year.
Apple: It faces ever increasing competition from Google, Samsung and Chinese rivals. It will be difficult for it to maintain profits this year, but we retain it in our portfolio as it is one of the largest technology companies with the ability to continue to innovate and stay relevant.
Bank of America: One of the largest banks in the US, its profits have steadily recovered after the 2009 global financial crisis, and we expect its profits to increase this year.
BHP Billiton: The world’s largest mining company, it will benefit from a global economic recovery and a weak rand.
China Construction Bank: One of the largest banks in the world, it has been trading at multi-year lows. At low PE, it presents value, although the shadow banking in China presents dangers.Coca-Cola: One of Warren Buffett's long-term holdings, we also like the stock for its global reach, quality products and strong brands. In particular, its defensive nature as a stock.
Google: A world technology giant, its technological advances bring about lifestyle changes. Its driverless car development and other technological advances will hopefully enhance its future revenue streams.
Microsoft: Last year it bought Nokia smartphone business, with the hope of consolidating its market share of mobile devices. It may be playing lots of catch-up to Apple and Google, but it continues to have an entrenched business office software market.
Nestle: A global food and beverages company, it is renowned for quality products. Blue chips stock.
Pinnacle: An IT solutions provider, it has been growing quickly over the last few years. Although the weaker rand means higher import prices, which will depress its profit margin, this company has lots of room for growth. Also its management has proven itself in terms of management, strategy and making the right acquisitions.
Toyota: A weaker Yen will continue to help its competitiveness in terms of exporting vehicles.
Volkswagen: Its car sales should continue to benefit from a growing global middle class.