Through turbulent times it can be difficult to keep cool heads, but some fund managers have a go-to stock they know they can rely on, whatever the markets throw at them.
While all managers will continue to always research and review their holdings, there are some that they have greater certainty will remain a part of their portfolios for a long time.
For Chris Elliott, portfolio manager of the Evenlode Global Equity fund, that company is RELX, one of the UK’s few large tech businesses listed in the UK. “While RELX may not shout for attention like some of its tech peers, it is a business that consistently delivers behind the scenes,” he said.
Once a traditional print publisher, it now produces platforms such as LexisNexis and Elsevier, which provide essential data analytics across academia, law and insurance.
“As clients generate more searches, downloads and queries, RELX’s insights deepen and its datasets improve. This creates a virtuous loop of value creation. The tools become more useful, clients more dependent and the relationship more entrenched,” said Elliott.
“High switching costs emerge naturally, protecting RELX’s margins and giving it the flexibility to incrementally invest in new technologies, such as artificial intelligence and advanced analysis.”
Shares have reflected the company’s growing importance. Over the past decade the stock has risen 234.5% from around £11.50 in 2015 to £38.72 today.
Including dividends, investors have made a total return of 322.3%, meaning £1,000 invested a decade ago would now be worth £4,222.71.
Price and total return of stock over 10yrs
Source: FE Analytics
But the stock is far from done, said Elliott. “With its proprietary datasets and a deep understanding of user workflows, RELX is well placed to build and deploy tools that add meaningful productivity and insight – and, as importantly, to effectively monetise them through bolt-on product additions.
“Its evolution into a data-driven, analytics-led business has been disciplined and deliberate. It has done so while maintaining strong margins, high returns and disciplined capital use. We believe RELX is the kind of trusted, capital-light, and long-term focused business that can continue to grow quietly for many years to come.”
Staying in the UK, another ‘forever’ stock is Netcall, according to Ken Wotton, manager of the Baronsmead VCTs at Gresham House.
The company provides customer engagement software and business process automation, helping organisations become more customer-centric, with applications across a wide range of industries, including healthcare, enterprise, local government and financial services.
It is perhaps best known for its main product Patient Hub, a digital service enabling NHS patients to confirm or rearrange appointments while providing real-time appointment monitoring.
“By reducing missed appointments and wait times, the platform enhances patient experience and allows healthcare staff to reallocate time to more critical tasks, driving both efficiency and productivity,” said Wotton.
The stock has been a long-term holding for the Baronsmead VCTs, with the initial investment dating back to 2010. Since the start of 2010 shares are up 572.7%, while it has made a total return of 770.8%.
Price and total return of stock since 2010
Source: FE Analytics
It has also made its way into the WS Gresham House UK Micro Cap fund, which Wotton also manages, entering this portfolio in 2019, followed more recently by Strategic Equity Capital plc (his investment trust) in 2023. In total he now owns 25% of the company.
“Since our initial investment, Netcall has grown from £14m to £186m in 2024, making it a testament to the power of AIM VCT investment in scaling innovative UK growth companies,” he said.
“With a proven track record of innovation, scalability and resilient financial performance, coupled with a long-term structural market opportunity, Netcall embodies the characteristics of a ‘forever stock’.”
Away from the UK, Saurabh Sharma, co-manager of the Regnan Sustainable Water and Waste fund, said there is a US stock that also fits the criteria: Waste Management.
It is one of the largest waste haulers in the US and Canada, providing disposal services to more than 20 million customers across residential, commercial, industrial and municipal. The 57-year-old company also has the largest network of landfills strategically located throughout its service area.
All of this means its “industry-leading capabilities enable it to deliver solid, predictable results,” he said.
“The company's financial performance is equally impressive, with consistent growth and high profitability. Waste Management’s history of resilient free cashflow generation and cash return to shareholders, even throughout the global financial crisis, supports its stability.”
Indeed, over the past 10 years the company’s shares are up 326.8% while the total return including dividends stands at 419.9%.
Price and total return of stock over 10yrs
Source: FE Analytics
It is also investing in renewable natural gas and recycling facilities, as well as the automation of recycling facilities, implementation of smart truck technology and enhancement of customer self-service tools.
“In November 2024, it acquired medical waste provider Stericycle, a medical waste management company, which takes Waste Management into an adjacent waste services stream of business. Given its essential services, strong market position, consistent financial performance and alignment with future trends, the company stands out as a long-term opportunity,” he concluded.