Interactive Investor’s winter portfolios outperformed the FTSE 350 index in the six months to the end of April, as it tested the theory that stocks perform better during the winter months.
The Aggressive Winter Portfolio was up 29.03 per cent from the end of October to April 30, while the Consistent Winter Portfolio was up 20.3 per cent over the same period on a total return basis, beating the FTSE 350 benchmark index, which had delivered 6.4 per cent in the period.
Interactive investor created the portfolios five years ago to test the theory that over the past 24 years investing over the winter months has delivered a stronger performance track record.
Since then the portfolios, which invest in stocks from the FTSE 350 index, consistently outperformed their benchmark index.
The constituents of the Consistent Winter Portfolio for 2018 to 2019 were Howden Joinery, InterContinental Hotels Group, Hill & Smith, Greene King and Croda International.
The Aggressive Winter Portfolio was invested in Ashtead Group, JD Sports Fashion, IWG, Bodycote and Rightmove from end of October 2018 to end of April 2019.
Lee Wild, head of equity strategy at interactive investor said: "The numbers should speak for themselves, but many continue to reject this approach, espousing the virtues of ‘time in the market rather than timing the market’.
"For the most part, there’s no arguing with that approach, and there are plenty of statistics to prove the point."
Interactive Investor stated that investors who bought the Aggressive Winter Portfolio at the end of October 2014 and sold the following 30 April, reinvested the proceeds into the 2015/16 portfolio and repeated the process each year, would have generated a return of 96.7 per cent, including commission and stamp duty.
Doing the same with the consistent portfolio would have returned 52.7 per cent and the FTSE 350 index reinvested each winter would have returned 26.8 per cent including dividends and excluding costs.
Mr Wild added: "Over the last five years - to date at least - these winter portfolios have consistently proved themselves a worthy part of any diversified investment strategy, and it is noteworthy that the FTSE 350 has fallen almost 3 per cent since April 30."
But Scott Gallacher, a chartered financial planner at Rowley Turton, was sceptical about any conclusions that could be drawn from the performance data.
He said: "While exercises such as this are very interesting and do serve to get people excited about investments I’m not too sure that we can draw any real conclusions.
"Apart from that a highly concentrated portfolio of just five stocks invested for just half the time can beat a diversified portfolio of 350 stocks. Put simply it just tells us that a high-risk portfolio can beat a low-risk portfolio."
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