Life Insurance 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 Life Insurance sector.

The following chart plots the average out-performance of the FTSE 350 Life Insurance sector over the FTSE 100 Index by month since 1999. For example, since 1999 on average the Life Insurance sector has out-performed the FTSE 100 Index by 2.1 percentage points in November.

Observations:

  1. The strongest months have been November and December – the sector has under-performed the market only twice in December in the last 14 years.
  2. The weakest months have been May and October – the sector has out-performed the market only three times in May in the last 14 years.

The eight stocks in the FTSE 350 Life Insurance sector [NMX8570] are-

Aviva [AV.] Prudential [PRU]
Legal & General Group [LGEN] Resolution Ltd [RSL]
Old Mutual [OML] St James’s Place [STJ]
Phoenix Group Holdings [PHNX] Standard Life [SL.]

 

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Shares that like/dislike May

Shares that like May

The following table lists the five FTSE 350 shares that have the best historic returns in May over the last ten years. For example, AVEVA has an average return of 10.3% for the month of May. Each stock has risen in at least eight of the past ten years in May – AVEVA is the only stock in the FTSE 350 that has risen in nine of the past ten years.

Company TIDM Avg(%)
AVEVA Group 10.3
3i Group 6.4
Babcock International Group 5.7
Pennon Group 3.1
Severn Trent 2.8

A portfolio of these five stocks would have out-performed the FTSE 350 Index in every May over the last ten years with an average out-performance of 6.2 percentage points each May.

Shares that dislike May

The following table lists the five FTSE 350 shares that have the worst historic returns in May over the last ten years. For example, Taylor Wimpey has an average return of -10.8% for the month of May. Each stock has fallen in at least eight of the past ten years in May.

Company TIDM Avg(%)
Taylor Wimpey -10.8
Royal Bank of Scotland Group (The) -7
Barclays -6.4
Workspace Group -5.3
Old Mutual -4.2

A portfolio of these five stocks would have under-performed the FTSE 350 Index in every May over the last ten years with an average under-performance of 5.9 percentage points each May.

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