The key to a healthy portfolio could be… a healthy portfolio. Or perhaps a ‘healthful’ portfolio would be a better way to put it.
According to a recent article from the Mail on Sunday published on This is Money, sports-related stocks could be sensible investments for those keen to ride the health and fitness trend.
Some of the examples given in the piece include sports retail brands like JD Sports, as well as high-profile football clubs.
But how do you decide where to place your funds – and what are the factors influencing positive performance in sports and leisure investments in recent years?
Investing in athleisure
Athleisure has been around for decades – since the 1970s according to Oxford University Press’s Lexico website, which also lists ‘athleisure’ as a trademark in the UK.
But it is only in recent years that it has surged in use to refer to fitness and wellness trends, helping to re-establish a market that has existed for many years.
Some of the biggest beneficiaries of this have been sportswear retailers like JD Sports, as AJ Bell investment director Russ Mould told This is Money.
“The company has defied the wider UK high street doom and gloom as it continues to benefit from the athleisure boom,” he said.
“The company also looks primed to go into the FTSE 100 Index in the next reshuffle,” he added, as the Bury-headquartered retailer’s share value had almost doubled in 2019 to reach £6.26 by the start of June.
However, other avenues to invest in sport in Bury fared less well over the same period, and in late August the news broke that Bury FC’s membership of the English Football League had been revoked as the deadline expired for the club to find a new owner.
Back of the net?
Investing in football clubs is probably perceived as an extremely high-risk venture at present, with Bury joined by other historic clubs like Bolton Wanderers in going through national headline-making financial difficulty in the summer of 2019.
But intelligent investment in football as a sector could still generate substantial yields, as the Mail on Sunday article noted.
Five years ago, shares in Manchester United were priced at $16.54 on the New York Stock Exchange, and in August 2018 could have been sold for around $26.
Over the year since, the club’s stock price has plummeted, hitting a low of just $16.68 – a painful period for investors who failed to sell at the peak price.
An alternative to investing directly in a single club is to buy into a fund like the Finsbury Growth & Income investment trust, which also has shares in Scottish Premiership giants Celtic FC.
While Manchester United’s share price has tumbled, Celtic won the triple last season, making the UK Alternative Investment Market listed trust a good way to diversify investment into football teams.
A healthy approach
Also this summer, The Share Centre published its analysis of the performance of ‘healthy’ brands vs. ‘unhealthy’ brands over the past five years.
The research defined healthy brands as including sportswear manufacturers, fresh food producers and slimming brands, set against fast food restaurants, alcohol and tobacco brands.
From an initial benchmark investment of £1,000 in summer 2014, the study found that the so-called Health Index had risen to a value of £2,245 in 2019, compared with £1,710 for the Unhealthy Index.
The report also noted healthful behaviour among young people, with 29% of under-25s claiming to be teetotal and a 25% drop in smokers among the UK adult population in the past five years.
Within the two indexes there were pockets of trend-defying performance. For those who don’t consider dieting to be necessarily healthy, the share price of Weight Watchers would seem to agree, falling by nearly 17% in the past five years.
Likewise if you subscribe to the belief that ‘food is fuel’, you might also want to subscribe to an investment in Domino’s Pizza, with share prices up by over 285% over the same period.
Front and centre
A common trend across all of these potential investments is the increasing awareness of health, fitness, exercise and wellness among people of all ages.
Just the widespread and rapid uptake of the term ‘athleisure’ in the past 12 to 18 months is an indication of how healthfulness is finding favour and crucially, doing so in a way that establishes it as a brand in its own right.
Thomas Rosser, junior investment research analyst at The Share Centre, said: “Health and wellness is front and centre for most of us now, with the industry growing, and growing fast.
“Every day knowledge about fitness means you can take your favourite brands – or fruit – and see how they’re measuring up on the stock market.
“Who knew stocks and shares and health and wellness went hand in hand?”
Disclaimer: The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.