Over the last 12 months the UK market has moved from worrying about the pandemic to worrying about inflation, supply chain disruption and the war in Ukraine.

Despite these serious risks to growth and stability, my rules-based SIF portfolio has continued to appreciate. SIF gained 10.3% during the 12 months to 20 April (excluding dividends).

In contrast, the FTSE All-Share index rose by 3.5% over the same period, or by 7.4% including dividends.

In this piece I’m going to review the portfolio’s performance and look at the main winners and losers from the past year. I also want to consider any lessons learned from the portfolio’s six-year history – and whether I need to make any changes to my rules for the year ahead.

SIF performance 2021/22

To recap briefly, the SIF (Stock in Focus) folio is a virtual portfolio I run here at Stockopedia. It was launched in April 2016 with virtual capital of £1,000,000 – hence the timing of this annual review.

I use a set of screening rules to select stocks for the portfolio and to dictate when they should be sold.You can find a comprehensive overview of how I run the portfolio in this piece and see the latest version of my SIF buying screen here. Finally, you can learn more about how I sell stocks here.

Performance: Here’s a summary of how the SIF portfolio has performed over the last year and since inception.

In response to a subscriber request, I’ve included the performance for each year of the portfolio’s history. Note these are capital return figures, excluding dividends, but including nominal costs (probably lower than true trading costs for a portfolio of this size):

Year (y/e 20 April)

SIF Folio

FTSE All-Share index

2016/17

+19%

+13%

2017/18

+18%

+3.8%

2018/19

+0.8%

+1%

2019/20

-20.1%

-22.2%

2020/21

+36.1%

+25.6%

2021/22

+10.3%

+3.5%

Cumulative return since April 2016

+69.5%

+19.8%

Annualised return April 2016

+9.2%

+3.1%

Here’s how this performance looks on a chart:

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SIF (blue) versus FTSE All-Share index (grey) since 19 April 2016

No strategy will rise in a straight line or consistently outperform its benchmark. But what I’ve seen with SIF is that it tends to perform strongly when markets offer an attractive mix of value and momentum.

At other times, the portfolio has tended to follow the market, preserving previous outperformance.

As my goal with SIF is to target affordable growth (which isn’t always available), I’m fairly happy with the way the portfolio has performed…

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