Bounceback portfolio 2016

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. 

Performance in 2016

The following table lists the ten worst performing FTSE 350 stocks in 2015. These ten stocks form the 2016 Bounceback Portfolio.

Company TIDM 2015 2016 (Jan-Mar)
Anglo American -75.1 84.4
Glencore -69.7 73.9
KAZ Minerals -60.3 66.7
Tullow Oil -60.0 18.8
Evraz -52.6 22.9
Vedanta Resources -52.1 24.6
Home Retail Group -52.0 66.6
Amec Foster Wheeler -49.7 4.9
Drax Group -46.9 11.3
Weir Group -46.0 10.8
FTSE 350 -2.8 -1.4

The final column in the above table also gives the returns for each stock for the period Jan-Mar 2016. For example, Anglo American shares fell 75.1% in 2015, and then rose (bounced back) 84.4% in the first three months of 2016.

The performance of the 10 Bounceback Portfolio stocks for Jan-Mar 2016 is shown in the following chart.

Bounceback portfolio 2016

On average the Bounceback Portfolio stocks had a 3-month return of 38.5%, compared with a FTSE 350 Index return of -1.4% for the same period.

Bounceback portfolio performance 2003-2016

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

Bounceback portfolio v FTSE 350 [2003-2016]

As can be seen the Bounceback Portfolio scored its greatest out-performance of the FTSE 350 in 2016.

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

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

Bounceback portfolio cumulative performance [2003-2016]

 

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Industrial Engineering sector monthly seasonality analysis – strong for first five months of the year

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

The following chart plots the average out-performance of the FTSE 350 Industrial Engineering sector over the FTSE 100 Index by month since 1999. For example, since 1999 on average the Industrial Engineering sector has out-performed the FTSE 100 Index by 1.5 percentage points in January.

Observations:

  1. The sector is strong relative to the whole market in the first five months of the year.
  2. The strongest months are March and April – the sector has under-performed the market only twice in the past 13 years in April.
  3. The weakest month has been September – the sector has out-performed the market only four times in this month in the last 14 years.

The seven stocks in the FTSE 350 Industrial Engineering sector [NMX2750] are-

Bodycote [BOY] Rotork [ROR]
Fenner [FENR] Sprax-Sarco [SPX]
IMI [IMI] Weir Group [WEIR]
Melrose [MRO]
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