There’s no such thing as a totally risk-free portfolio. But holding a diverse selection of FTSE 100 shares can help provide a margin of security while also capturing different growth opportunities. Managing potential hazards is especially important in uncertain times like these.
Worries over global growth have eased more recently amid cooling trade tensions. But macroeconomic challenges persist, and with geopolitical tensions mounting, too, the outlook is less than clear, both in the near term and beyond.
On that note, here are three top Footsie stocks I think merit serious attention today.
F&C Investment Trust
The F&C Investment Trust (LSE:FCIT) is perhaps the easiest, cheapest, and most effective way to achieve diversification. A stake in this pooled investment vehicle provides exposure to 390 different companies worldwide.
Almost two-thirds of the £6bn worth of assets it holds are North American equities. But it also has meaty exposure to UK, European, and Japanese shares for variety, and emerging markets businesses for additional growth potential.
A large contingent of US shares leaves it more exposed to a potential Stateside recession than trusts with greater geographical spreads. But its strong exposure to the so-called Magnificent Seven tech giants like Nvidia, Microsoft, Apple, and Meta also give it scope for long-term growth.
Over the last 10 years, the F&C Investment Trust has provided an average annual return of 9.2%.
Associated British Foods
Perhaps best known for its Primark clothing division, Associated British Foods (LSE:ABF) has its fingers in many pies (so to speak). Consisting of five different units — Retail, Grocery, Ingredients, Sugar, and Agriculture — and operating across the globe, it’s arguably one of the FTSE’s best diversified businesses.
Its exposure to retail can leave it vulnerable when consumers feel the pinch. But although Primark is its single largest unit, it accounts for just 47% of sales. This means it’s much less exposed than pure-play retail shares like Next and M&S.
I like Associated British Foods because of Primark’s enormous growth potential. Its global expansion strategy continues at pace, and is tipped to contibute 4%-5% to the unit’s total yearly sales growth “for the foreseeable future.” Ongoing investment in Click and Collect is also helping it to better capture the growing number of online shoppers.
Unilever
Based on revenues, Unilever (LSE:ULVR) is the sixth-largest fast-moving consumer goods (FMCG) company on the planet. In my opinion it’s one of the best to consider as part of a well-diversified portfolio.
Around three-quarters of the firm’s annual sales come from 30 so-called Power Brands. These include Dove soap, Hellmann’s mayonnaise, and Comfort fabric conditioner. However, it counts more than 400 labels in its portfolio, helping it to spread risk and tap into multiple consumer segments.
The brands described above illustrate how Unilever spreads its expertise far and wide, from beauty and wellbeing products to home care, personal care, and nutrition. This strategic mix allows the business to better navigate weakness in one or two areas.
What’s more, these products command exceptional pricing power, giving Unilever scope to grow earnings over time (and even during economic downturns). Investors need to be mindful of rising competition in some of its product segments. But on balance, I think it’s a top FTSE 100 stock to consider.
