Is it really late March already? The calendar certainly tells me so. Apparently, we’re 11 weeks into the year! In which case, why don’t we have a gander at the best-performing FTSE 100 shares?
There’s plenty to choose from even if the Footsie hasn’t exactly wowed investors in 2024.
My own view is this top 10 houses some top-notch choices for stocks to buy, including one star growth stock I’d buy today.
Top 10
Without further ado, let’s take a look at the list.
| Stock | Performance year-to-date |
| Rolls-Royce | 33.88% |
| Beazley | 31.29% |
| Flutter | 20.92% |
| BAE Systems | 19.00% |
| Intermediate Capital Group | 17.28% |
| Convatec | 16.94 |
| Smurfit Kappa | 16.43% |
| GSK | 13.98% |
| Intertek | 13.91% |
| Antofagasta | 13.90% |
The first thing that jumps out at me is the diversity. The best performers aren’t huddled in one industry but spread out across insurance, mining, pharma, packaging, gambling and more.
It’s a crumb of comfort that there are still buying opportunities across the FTSE 100, even in a middling year for the index.
What’s the best of these opportunities looking ahead? Well, it’s hard to look past the defence stocks BAE Systems and Rolls-Royce (LSE: RR.).
Nations across the world are preparing for the worst and breaking defence spending records left, right, and centre.
More European countries than ever surpassed the ‘2% of GDP’ NATO target last year. That’s hundreds of billions that will pour into defence funding.
It could climb in the years ahead too.
What next?
UK defence secretary Grant Shapps wants to hit 2.5%, the Polish president urged allies to target 3%. The German defence chief even hinted 3.5% was on the cards.
It’s a sorry situation, but an unavoidable one with hawkish leaders like Putin in the world. The knock-on effect will be full order books for defence firms like BAE Systems.
And yet, I’d say the best buy on the list is Rolls-Royce. It has a defence segment too that topped £4bn in sales last year. I’d expect that to rise as governments buy more military planes fitted with the firm’s engines.
The shares are flying – up 10 times since 2020. And I think there could be plenty of petrol left in the tank.
Why? Because Rolls-Royce offers engineering excellence in an industry with high barriers to entry.
Take the engines it produces for passenger planes. The aeroplane industry is a duopoly, pretty much. The choices are Boeing or Airbus.
One of Boeing’s latest aeroplanes is the Boeing 787 Dreamliner which was introduced in 2011.
When an airline places an order they choose the engines they’d like installing. The choices? Rolls-Royce or General Electric.
It’s a similar story with Airbus. The Airbus A350 was introduced in 2015 and is fitted only with Rolls-Royce Trent XWB engines.
In short, modern planes are getting fitted with high-quality Rolls-Royce engines and I don’t see that changing any time soon.
Largest position
It’s no surprise to me the stock is the FTSE 100’s best performer of 2024. But in terms of risks, the shares could be overbought after such a rapid ascent, which crossed the 400p mark.
Overall though, I’m happy to see that Rolls-Royce is now my single largest position. If it wasn’t, I might even buy more shares.
