First trading day of May

Tomorrow will be the first trading day (FTD) of May.

As explained in the 2013 edition of the Almanac, the market has a tendency to be strong on the FTD of a month. And this effect has been even more pronounced in recent years.

The May FTD has been the 4th weakest month FTD of the year: since 1984 the FTSE 100 Index has increased on average 0.07% on this day.

From 2000 the average return on the day has been even weaker at 0.01%, making it the 2nd weakest month FTD in the year.

The following chart shows the returns for every May FTD since 1984.
The FTSE 100 Index returns for every May FTD since 1984

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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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De La Rue [DLAR] – 66 years on the LSE

On this day in 1947 De La Rue 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 De La Rue has out-performed the FTSE 100 by 3.3 percentage points in May.

Average monthly performance of De La Rue [DLAR] relative to the FTSE 100 Index (1994-2012)

Observations:

  1. The strongest month for De La Rue shares relative to the market has been May (the shares have out-performed the market in this month in 13 of the last 19 years).
  2. The weakest month for De La Rue relative to the market has been July (the shares have only out-performed the market in this month in 6 of the past 19 years).

 

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British Land Co [BLND] – 62 years on the LSE

On this day in 1951 British Land Co 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 British Land Co has out-performed the FTSE 100 by 1.6 percentage points in May.

Average monthly performance of British Land Co [BLND] relative to the FTSE 100 Index (1994-2012)

Observations:

  1. The strongest month for British Land Co shares relative to the market has been May (the shares have out-performed the market in this month in 12 of the last 19 years).
  2. The weakest month for British Land Co relative to the market has been October (the shares have only out-performed the market in this month in 6 of the past 19 years).

 

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