Investing in blue-chip stocks: trust the titans of the market

Holding big blue-chip stocks with enduring competitive advantages – AKA a wide moat – is lucrative. It has also just got easier with this investment trust.

Uniqlo shop
Fast Retailing, whose brands include Uniqlo, is a top holding of the Lyxor DJ Global Titans 50 UCITS ETF
(Image credit: © Uniqlo)

Over the last few years more and more market commentators have noticed a concentration effect whereby a small number of very successful businesses are becoming more powerful in terms of market share, which in turns leads to higher share prices. Backing these businesses has been a profitable trade for active fund managers.

For investors with a more passive inclination the choice in this context has historically been more limited, but that is now changing. In recent years a few new exchange-traded funds (ETFs) have tried screening national or global markets for a more focused collection of large, highly profitable businesses where the competitive advantage is defensible.

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David C. Stevenson
Contributor

David Stevenson has been writing the Financial Times Adventurous Investor column for nearly 15 years and is also a regular columnist for Citywire. He writes his own widely read Adventurous Investor SubStack newsletter at davidstevenson.substack.com

David has also had a successful career as a media entrepreneur setting up the big European fintech news and event outfit www.altfi.com as well as www.etfstream.com in the asset management space. 

Before that, he was a founding partner in the Rocket Science Group, a successful corporate comms business. 

David has also written a number of books on investing, funds, ETFs, and stock picking and is currently a non-executive director on a number of stockmarket-listed funds including Gresham House Energy Storage and the Aurora Investment Trust. 

In what remains of his spare time he is a presiding justice on the Southampton magistrates bench.