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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Shares that like/dislike March

Shares that like March

The following table lists the five FTSE 350 shares that have the best returns in March over the last ten years. For example, The Restaurant Group has an average return of 12.4% for the month of March. All stocks have risen in March for at least nine of the past ten years.

Company TIDM Avg(%)
Restaurant Group (The) 12.4
Intertek Group 8.9
Cobham 5.3
Berendsen 5.3
Victrex 2.8

 Shares that dislike March

The following table lists the five FTSE 350 shares that have the worst returns in March over the last ten years. For example, Renishaw has an average return of -4.4% for the month of March. All five stocks have fallen in at least eight of the past ten years in March.

Company TIDM Avg(%)
Renishaw -4.4
Royal Bank of Scotland Group (The) -3.5
PZ Cussons -2.9
HSBC Holdings -2.7
Smiths Group -2.5

An equally-weighted portfolio of the above strong March stocks would have out-performed every year an equally-weighted portfolio of the above weak March stocks by an average of 10.1 percentage points in March for the past ten years.

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Shares that like/dislike October

Shares that like October

The following table lists the four FTSE 350 shares that have the best returns in October over the last ten years. For example, Tate & Lyle has an average return of 6.1% for the month of October. Each stock has risen in October in nine of the past ten years, while Diageo is the only FTSE 350 stock to have risen in every October for the past ten years.

Company TIDM Avg(%)
Tate & Lyle 6.1
Marks & Spencer Group 5.2
Restaurant Group (The) 3.9
Diageo 3.0

Shares that dislike October

The following table lists the three FTSE 350 shares that have the worst returns in October over the last ten years. For example, William Hill has an average return of -4.4% for the month of October. All four stocks have fallen in October in at least eight of the past yen years.

Company TIDM Avg(%)
William Hill -4.4
Tullett Prebon -4.2
Centrica -1.6

An equally-weighted portfolio of the above strong October stocks would have out-performed every year an equally-weighted portfolio of the above weak October stocks by an average of 7.9 percentage points in October for the past ten years.

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Shares that like/dislike March

Shares that like March

The following table lists the five FTSE 350 shares that have the best returns in March over the last ten years. For example, Aggreko has an average return of 11.7% for the month of March. Each stock has risen in March in at least nine of the past ten years; Intertek is the only FTSE 350 company whose shares have risen in every March for the past ten years.

Company TIDM Avg(%)
Aggreko 11.7
Restaurant Group (The) 11.4
Intertek Group 9.2
IMI 7.9
Cobham 6.1

Shares that dislike March

The following table lists the five FTSE 350 shares that have the worst returns in March over the last ten years. For example, Aviva has an average return of -7.7% for the month of March. All five stocks have fallen in March in at least eight of the past yen years.

Company TIDM Avg(%)
Aviva -7.7
RSA Insurance Group -4.3
Renishaw -3.7
Royal Bank of Scotland Group (The) -3.2
HSBC Holdings -3.1

An equally-weighted portfolio of the above strong March stocks would have out-performed every year an equally-weighted portfolio of the above weak March stocks by an average of 13.7 percentage points in March for the past ten years.

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Shares that like/dislike October

Shares that like October

The following table lists the five FTSE 350 shares that have the best returns in October over the last ten years. For example, Diageo has an average return of 3.6% for the month of October. Each stock has risen in at least eight of the past ten years in October – Diageo is the only stock in the FTSE 350 whose shares have risen every October in the past ten years.

Company TIDM Avg(%)
Diageo 3.6
Restaurant Group (The) 3.3
easyJet 11.6
Brewin Dolphin Holdings 6.4
Tate & Lyle 4.8

Shares that dislike October

The following table lists the three FTSE 350 shares that have the worst returns in October over the last ten years. For example, Grainger has an average return of -8.3% for the month of October. All three stocks have fallen in eight of the past ten years in October.

Company TIDM Avg(%)
Grainger -8.3
Dialight -3.0
Worldwide Healthcare Trust -1.8

An equally-weighted portfolio of the above strong October stocks would have out-performed an equally-weighted portfolio of the above weak October stocks by an average of 10.3 percentage points in October for the past ten years.

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Travel & Leisure 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 Travel & Leisure sector.

The following chart plots the average out-performance of the FTSE 350 Travel & Leisure sector over the FTSE 100 Index by month since 1999. For example, since 1999 on average the 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 three times in November in the last 14 years.
  2. The sector has no consistently weak months; although the sector has under-performed the market by an average of 2.6 percentage points in October, the sector has actually out-performed the market that month in eight of the past 14 years.

The 23 stocks in the FTSE 350 Travel & Leisure sector [NMX5750] are-

Betfair Group [BET] Ladbrokes [LAD]
Bwin.Party Digital Entertainment [BPTY] Marston’s [MARS]
Carnival [CCL] Millennium & Copthorne Hotels [MLC]
Compass Group [CPG] Mitchells & Butlers [MAB]
Domino’s Pizza UK & IRL [DOM] National Express Group [NEX]
easyJet [EZJ] Playtech Ltd [PTEC]
Enterprise Inns [ETI] Rank Group (The) [RNK]
FirstGroup [FGP] Restaurant Group (The) [RTN]
Go-Ahead Group (The) [GOG] Stagecoach Group [SGC]
Greene King [GNK] TUI Travel [TT.]
InterContinental Hotels Group [IHG] Wetherspoon (J D) [JDW]
International Consolidated Airlines Group SA [IAG]
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The Restaurant Group [RTN] – 44 years on the LSE

On this day in 1969 The Restaurant Group listed on the LSE.

The following chart plots the average monthly out-performance of the shares over the FTSE 100 Index since 1994. For example, on average RTN has under-performed the FTSE 100 by 0.7 percentage points in January.

Observations:

  1. The strongest months for RTN relative to the market have been March, April and August (the shares have out-performed the market in March in 13 of the last 18 years).
  2. RTN shares have been weak relative to the market in February and September; the shares have only out-performed the market in February in six of the past 18 years.

 

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