The SIF portfolio was launched on 19 April 2016, so last week it turned two years old. The SIF Fantasy Fund stats show me that the portfolio has delivered another market-beating performance last year:

  • SIF portfolio 2017/18: +18pc

  • FTSE All-Share 2017/18: +3.8pc

  • Outperformance: +14.2pc

The portfolio delivered a 19% gain in 2016/17, so last year’s performance is very consistent. (If you’d like to know more about how I select stocks for the portfolio, start here)

SIF’s return over two years is now about 40%. The FTSE All-Share Index has risen by about 16% over the same period. So the portfolio has outperformed its benchmark by 24% in two years.

To flesh out the performance data provided by the Fantasy Fund, I also keep a spreadsheet that enables me to track the performance of each stock in a little more detail. This includes both dividends and costs.

According to my calculations, the average total return for each stock sold since the portfolio’s inception is now 19.8%. This gives an average annualised total return of 31.1% for each position sold to date.

I’m reasonably happy with these figures. Although there are investors on this website who have done a lot better than this over the last two years, the concept behind this portfolio is that it’s largely rules-based and doesn’t require much management.

Avoiding losses

I invest some of my own money in all of the SIF stocks. One of my main goals is to avoid big losses. So I was pleased by the way the portfolio held its value during the first quarter of 2018, when the wider market was falling:

Of course, two years is a short time. And during this period we’ve enjoyed rising markets with low levels of volatility. Like many portfolios (and some professional fund managers), SIF hasn’t yet been tested in a bear market or a recession.

I wrote earlier this year about how I hope my screening rules would perform in more testing scenarios. It’s now time for my annual review of these rules. Can I make any changes to increase performance or provider greater protection against losses?

Did last year’s changes work?

Last year I found that on average, stocks rose after they were sold from the portfolio. So in April 2017, I decided to extend the portfolio’s minimum holding period from six months to…

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