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Ideas of the Year Review 2021

The trends that powered performance at the start of 2021 have ended up the biggest losers of the 12 months
Ideas of the Year Review 2021
  • Okay, our Ideas underperformed – sob!
  • But our quality and growth-focused portfolios did well
  • 2021 was a rather treacherous year

The format for our annual Ideas of the Year last year, including five portfolios of 10 shares, makes for more interesting analysis. In particular, it illustrates just how hard it is to play trends over a 12-month period. 

The two portfolios that have done badly, our Covid Survivors and Small-cap Stars were the early winners last year. In particular, the Covid Survivors were 12 per cent ahead of the index in March. This had looked like the hot trend as the year began but it was to prove to have only about three months of gas left in the tank. 

By contrast, the themes that focused on quality and growth, Mega Trends, Best of British and World's Best Shares, were all underperforming in March, registering underperformance of 9 per cent, 11 per cent and 7 per cent, respectively. But all these strategies have marched stolidly onwards over the 12 months to end up registering respectable outperformance.

The disappointment of the small companies portfolio owes a fair bit to the stocks highlighted. Two previously reliable companies, Avon Protection (AVON) and Frontier Developments (FDEV), delivered serious disappointments. In the case of Avon, the shares have massively de-rated. We think the worries about Frontier could prove overdone and have flagged it as a recovery play for 2022. 

Overall, the portfolios underperformed their average for the indices we’ve tracked them against, which is obviously very disappointing. A lot of the blame would seem to lie with those wayward smaller companies' picks, but the rollercoaster ride of our Covid Survivors also inflicted some damage. 

A summary of the performance from the portfolios can be found below with full details available online. The chart illustrates the performance of all 50 stocks and an aggregation of their benchmarks.

 

 Ideas of the YearIndexOut/Underperformance
Best of British18.8%15.7%2.7%
Covid Survivors8.9%15.7%-5.8%
Small Cap Stars-0.8%12.8%-12.1%
World's Best Companies25.8%21.6%3.5%
Mega Trends26.9%21.6%4.4%
Average15.9%17.3%-1.6%
Source: Thomson Datastream 

 

 

Total Return 7 Jan 2021 to 24 Dec 2021
Best of BritishCovid SurivorsSmall Cap StarsWorld BestMega Trends
DIPLOMA51.6%GREGGS72.8%WAREHOUSE REIT50.7%MICROSOFT54.6%NVIDIA128.2%
SPIRAX-SARCO ENGR.38.3%YOUNG & CO.BREW.'A'23.6%FOCUSRITE40.6%COSTCO WHOLESALE50.8%ALPHABET A72.0%
DIAGEO38.2%COMPASS GROUP16.5%DOTDIGITAL GROUP17.6%DOMINO'S PIZZA43.0%NOVO NORDISK 'B'61.7%
RELX33.9%NEXT11.9%XP POWER (DI)12.9%ESTEE LAUDER COS.'A'41.4%TESLA48.1%
EXPERIAN28.9%SHAFTESBURY5.3%QUARTIX TECHNOLOGIES2.8%NESTLE 'N'22.1%APTIV25.4%
RIGHTMOVE21.1%BURBERRY GROUP1.0%TEAM 17 GROUP-1.5%NIKE 'B'20.1%GARMIN16.5%
DUNELM GROUP18.7%ICTL.HTLS.GP.-1.8%AB DYNAMICS-8.8%ADOBE (NAS)15.6%MERCK & COMPANY4.7%
UNILEVER (UK)-9.1%WHITBREAD-6.6%BIOVENTIX-20.0%AMAZON.COM6.2%PAYPAL HOLDINGS-15.6%
GAMES WORKSHOP-10.5%WH SMITH-8.0%FRONTIER DEVELOPMENTS-40.5%VISA 'A'2.4%ORSTED-35.2%
LONDON STOCK EXCHANGE GROUP-23.1%EASYJET-25.1%AVON PROTECTION-61.5%INDUSTRIA DE DISENO TEXTIL INDITEX ADR 2:12.1%VESTAS WINDSYSTEMS-36.3%
FTSE ALL SHARE15.7%FTSE ALL SHARE15.7%FTSE Small Cap/Aim12.0%FTSE WORLD £21.6%FTSE WORLD £21.6%
Best of British18.8%Covid Surivors8.9%Small Cap Stars-0.8%World Best25.8%Mega Trends26.9%
Source: Thomson Datastream