2023 was a tough year in the markets, especially for UK small-cap investors. For much of the year my systematic SIF Folio remained heavily in cash, with few new opportunities on offer.
However, the final two months of the year saw the FTSE All-Share index gain nearly 7%, as sentiment improved in the face of falling inflation and likely end to interest rate rises. This momentum also injected some life into my screening results, providing some welcome new buying opportunities.
I hope this much-needed Santa Rally also added some pep to your investing results for the year.
Personally, I’m not sure we’re completely out of the woods yet. But the year-end surge certainly provided a useful boost to SIF’s full-year performance, allowing me to clock up a positive performance for the full year.
SIF 2023 performance
The SIF “Stock in Focus” portfolio is a rules-based model portfolio I’ve been running here at Stockopedia since April 2016. Shares are selected from a stock-buying screen and then subjected to additional manual screening to ensure a basic level of diversification.
My screening rules are designed to identify affordable, profitable, growth stocks with positive momentum – broadly speaking, it's a GARP-type strategy.
The portfolio has a minimum holding period of nine months, after which shares must continue to pass certain screening tests in order to remain in the portfolio. It’s not a long-term buy-and-hold system and there are periods, such as last year, when the folio is heavily weighted to cash.
Last year saw SIF put in a relatively volatile performance, but the eventual outcome was positive.
The value of the SIF model portfolio rose by 5.7% in 2023, modestly outpacing the 3.8% gain delivered by its FTSE All-Share index benchmark. This was a welcome improvement on 2022, when SIF fell by 6%.
These figures exclude dividends, but SIF results include an estimate of dealing costs and Stamp Duty.
Long-term performance remains robust
One year is a short time in the stock market – and certainly too short to judge the success of any investing strategy, in my view.
Although SIF’s performance over the last couple of years has been somewhat mixed, the portfolio has outperformed the FTSE All-Share significantly over the longer term.
SIF…
