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Investors could be onto a winner with the World Cup this summer even if England fail to win the trophy - if past performance is anything to go by.
Ahead of kick-off next month, a study from trading platform IG suggests that a punt on major sponsors of the event during tournament periods tends to outperform the market.
Analysis of a basket of seven stocks over the period from 30 days before to three months after the end of the tournament showed they delivered an average 7.1pc return.
That was triple the 1.9pc level of returns from New York’s S&P 500 and easily outdoing the negative 1.1 per cent from the FTSE 100.
Kick-off: Ahead of the World Cup next month, broker IG showed that a punt on the event’s major sponsors during tournament periods tends to outperform the market
IG said Nike was the standout stock, delivering an average 17.7pc gain across the four tournaments analysed from 2010 to 2022 and a bumper 38.7pc jump in 2022.
The basket of stocks also included Adidas, Coca Cola, Visa, Hyundai, Kia and Budweiser maker AB InBev. While on average it outperformed, individual stocks saw sharp swings with some seeing falls in some years.
And in 2018 there was a blip for the World Cup stocks as they delivered an average negative return of 1.2 per cent – in a period when the S&P 500 saw a 1.35pc gain.
Chris Beauchamp, chief market analyst at IG, said: ‘The World Cup creates a unique environment where a small group of globally recognised brands capture a disproportionate share of attention - and that visibility can feed through into stronger stock performance over a relatively short period.
‘It’s particularly interesting when you set that against the traditional “Sell in May” narrative, where markets are often expected to drift or soften over the summer months.
‘What we’ve seen is that World Cup sponsors can cut against that trend, with tournament-driven demand, marketing spend and consumer engagement helping to support share prices at a time when the wider market can lack direction.
‘What stands out is the gap between these companies and the broader indices.
‘Even in years where markets have struggled, sponsor-linked stocks have often been able to outperform - although not without volatility, and with outcomes still heavily influenced by timing and wider market conditions.’
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