Bounceback portfolio 2017

The Bounceback Portfolio invests in the 10 worst performing FTSE 350 stocks of the previous year and holds them for the 3-month period, January-March. 

Let’s see how the Bounceback Portfolio fared in 2017.

Performance in 2017

The following table lists the ten worst performing FTSE 350 stocks in 2016. These ten stocks form the 2017 Bounceback Portfolio.

The final column in the table also gives the returns for each stock for the period Jan-Mar 2017. For example, Capita shares fell 56.0% in 2016, and then rose (bounced back) 6.3% in the first three months of 2017.

Company TIDM 2016 2017 (Jan-Mar)
Capita -56.0 6.3
Restaurant Group (The) -52.7 2.8
Sports Direct International -51.7 10.6
Essentra -44.3 13.9
easyJet -42.2 2.1
International Personal Finance -40.4 -5.0
IG Group Holdings -38.4 0.6
McCarthy & Stone -36.6 17.4
Inmarsat -33.9 13.2
Man Group -32.6 24.5
FTSE 350 12.5 2.9

For reference, the performance of the FTSE 350 Index is also shown for the same periods.

As can be seen, the majority of the bounceback stocks outperformed the Index in the first quarter of 2017.

The performance of the 10 Bounceback Portfolio stocks for Jan-Mar 2017 is shown in the following chart.

Bounceback portfolio 2017 Returns Jan-Mar 2017

On average the Bounceback Portfolio stocks had a 3-month return of 8.6%, compared with a FTSE 350 Index return of 2.9% for the same period.

So, an equally-weighted portfolio of the ten bounceback stocks would have outperformed the FTSE 350 Index by 5.7 percentage points over the target first three months of 2017.

Bounceback portfolio performance 2003-2017

The Bounceback strategy has been tracked since 2003. The following chart shows the comparative performance of the portfolio and the FTSE 350 Index for each year since 2003.

Bounceback portfolio v FTSE 350 - Jan-Mar returns [2003-2017]

Since 2003, the Bounceback Portfolio has under-performed the index only twice (in 2013 and 2015).

The following chart shows the cumulative performance of the portfolio from 2003.

Bounceback portfolio cumulative performance - Bounceback portfolio v FTSE 350  [2003-2017]

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Bounceback Portfolio 2017

The Bounceback Portfolio invests in the 10 worst performing FTSE 350 stocks of the previous year and holds them for the 3-month period, January-March. 

The Bounceback Portfolio for 2016 recorded the best performance ever for the strategy: a 3-month return of 38.5%, compared with a FTSE 350 Index return of -1.4% for the same period.

The following table lists the ten worst performing FTSE 350 stocks in 2016. These are the ten stocks that will comprise the 2017 Bounceback Portfolio.

Company TIDM Return in 2016 Return since 31/12/2016
Capita CPI -56.0 -2.4
Restaurant Group (The) RTN -52.7 6.0
Sports Direct International SPD -51.7 2.3
Essentra ESNT -44.3 -1.3
easyJet EZJ -42.2 7.4
International Personal Finance IPF -40.4 -4.4
IG Group Holdings IGG -38.4 7.1
McCarthy & Stone MCS -36.6 4.8
Inmarsat ISAT -33.9 2.1
Man Group EMG -32.6 2.4

The final column gives the returns for the individual stocks for the first six days of the 2017. The portfolio as a whole has seen a return of 2.4% for the first six days of 2017, against a return of 1.9% for the FTSE 350 Index.

The Bounceback Portfolio is meant to be held until the end of the March 2017, but it is good to see that it has started the year well so far.


 

More articles on the Bounceback Portfolio.

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FTSE 100 and FTSE 250 Quarterly Review – June 2016

After market close on 1 June 2016 FTSE Russell confirmed the following changes to the FTSE 100 and FTSE 250 indices. The changes will be implemented at the close Friday, 17 June 2016 and take effect from the start of trading on Monday, 20 June 2016.

FTSE 100

Joining: Hikma Pharmaceuticals [HIK]

Leaving: Inmarsat [ISAT]

FTSE 250

Joining: Ascential [ASCL], CMC Markets [CMCX], Countryside Properties [CSP], CYBG [CYBG], Hill & Smith Hldgs [HILS], Metro Bank [MTRO], Smurfit Kappa Group [SKG]

Leaving: Highbridge Multi-Strategy Fund [HMSF], Interserve [IRV], Jimmy Choo [CHOO], Lookers [LOOK], Melrose Industries [MRO], Northgate [NTG], Ophir Energy [OPHR]

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Mobile Telecommunications sector monthly seasonality analysis

The 2013 edition of the Almanac looks at the historic monthly performance of the FTSE 350 sectors. Here we look at the Mobile Telecommunications sector.

The following chart plots the average out-performance of the FTSE 350 Mobile Telecommunications sector over the FTSE 100 Index by month since 2006. For example, since 2006 on average the Mobile Telecommunications sector has under-performed the FTSE 100 Index by 2.7 percentage points in February.

Observations:

  1. The strongest months of the year relative to the market for the sector have been September and December, the sector has only under-performed the market in two years since 2006 in September.
  2. The sector has been relatively weak in February and April, the sector has only out-performed the market in two years since 2006 in February.

The two stocks in the FTSE 350 Mobile Telecommunications sector [NMX6570] are-

Inmarsat PLC [ISAT]
Vodafone Group PLC [VOD]
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