Freetrade diary #5 – May

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Freetrade referral link – sign up and earn yourself a free share worth up to £200


White Freetrade lettering overlapping plain pink background

Very few updates again this month with the rising markets in spite of the wider global uncertainty caused by the pandemic.

Two big updates from the Freetrade platform though: US fractional shares were made available to all users and 250 new US shares were added.

Some big names in there like Eli Lilly, Foot Locker, Costco and AIG and many I’ve never heard of.

Nothing immediately attracted my eye but I haven’t had a proper look into the full list yet. Either way there is a nice mix of insurance, utilities, banking, tech and other sectors to choose from.

I’m forever curious at how Freetrade choose which new companies, funds and trusts to add. I know you can request new additions on their forum and on Twitter, but as for how influential your suggestion has been, I’m none the wiser.

Owing to the overly positive markets at the moment, I’m yet to fully test the new fractional shares offering out properly.

I have used it to jump into small holdings in both long time ‘wish-listers’: Visa and MasterCard.

new-visa-mastercard-logo-695x237

The two largest payment processing companies in the world, both hold huge monopolies worldwide on credit and debit card transactions.

Both companies boast impressive numbers operating in over 200 countries and dating back over a combined 110 years.

In terms of pure metrics, Visa pips Mastercard in both market cap, cards issued, payment volume and transactions processed. But Mastercard saw greater growth in all these areas during 2019.

Both also boast high profit margins of around 50%, with Mastercard having a larger debt but has seen slightly higher earnings growth in recent years.

Both have quite high P/E ratios at the moment so I’m only dipping my toes, but I’m confident they’ll be a nice addition to the portfolio over the long term.

I also like them as a complement to the ever growing cashless society. Some may hate this, some will love it. I’m quite indifferent on the matter so why not profit from this inevitability.

I chose to add both to the Freetrade portfolio as choosing one or the other, I felt, would be splitting hairs between two healthy and fairly stable companies with a solid future; a lot like those who ask whether they should invest in the FTSE All-Cap or the LS100…you’re splitting hairs, just get it in the market! Your hesitance is probably costing you a lot more than the slight UK weighting in the 100 will ever do.

And finally, one more free share this month (ta muchly): Edinburgh Investment Trust.

IMG_0109

Nearly 70% is made up of FTSE100 companies and another 15% of FTS250. Probably not the most adventurous fund in the world, but for U.K diversity it’s probably not a bad shout.

According to the fund factsheet, it was launched in 1889 which would be quite incredible if I’m reading that right. The same decade as Queen Victoria’s Golden Jubilee and only three years after the ‘almighty’ Woolwich Arsenal was founded. I wonder what the fund was made up of back then?

Anyway, until next month…stay safe.

 

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