The UK’s elite FTSE 100 hasn’t covered itself with glory over the last 12 months. In the year to 24 November, the index has gained a mere 0.2%, excluding cash dividends. Meh.
As a result, London’s main market index lags far behind global rivals. For example, in America the S&P 500 is up 15% in a year, with Japan’s TOPIX index doing even better with a 19.3% leap.
Some shares have performed splendidly
Of course, not all of the index’s constituent shares have delivered so little. Indeed, some have delivered outstanding capital gains since late November 2022.
Of the 99 shares in the index for an entire year, 47 have generated positive returns — again, excluding dividends. These range from 1% to a hefty 164.7%. The average gain across all 47 winners is 23.9% — far exceeding the FTSE’s return.
Meanwhile, at the other end of the table are 52 losers — those stocks losing value over 12 months. These capital losses range from just 0.8% to a painful 43.8%. The average decline across all 52 losers is 12.8%.
The Footsie’s brightest stars
I do wonder if the stocks performing ina similar way have anything in common? To find out, I analysed the index’s five top-performing stocks over 12 months. Here they are:
| Company | Sector | One-year return |
| Rolls-Royce Holdings | Aerospace and defence | +164.7% |
| Marks & Spencer Group | Retailing | +96.3% |
| 3i Group | Private equity and venture capital | +60.5% |
| Centrica | Energy and services | +54.7% |
| Associated British Foods | Retailing and food processing | +49.8% |
At first glance, there seems little in common connecting these five booming businesses and their market-thrashing shares.
One is a leader in the field of aero engines and defence equipment, two are involved in retailing, one is among the UK’s largest investment trusts, while the fifth supplies us with gas and electricity.
That said, I would consider four of the five to be ‘recovery plays’ — shares that have lost ground in the past, only to turn things around in 2022-23.
For example, Rolls-Royce is back on top due to a huge surge in passenger travel post-Covid-19. Similarly, Marks & Spencer Group has undergone an astonishing transformation, as a turnaround plan to shake up its stores and product ranges finally gains traction.
Likewise, Centrica‘s shares have surged, driven skywards by ever-rising UK energy bills. And Associated British Foods owns thriving high-street clothing chain Primark, while its food-processing division has benefited from rising sugar prices.
What next for these market’s winners?
I’m a Motley Fool, not a fool, so I know that it’s absolute folly to try to predict next year’s stock market winners (and losers).
Then again, history — and 37 years of investing — has taught me that this year’s stars can become next year’s dogs (and vice versa). Thus, I won’t make any predictions about the future direction of these five market-beating shares.
Lastly, I’m kicking myself for not buying M&S shares in late 2022. They seemed a clear and obvious value buy from October onwards, but I didn’t crunch the numbers to confirm this. This week, my wife confirmed that she would have been more than happy to add this FTSE 100 stock to our family portfolio. Rats!
