In a year when just 27% of actively managed funds outperformed their benchmark, the US Nasdaq index delivered a 33% loss, the FTSE 250 index fell 22% and the FTSE All-World index dropped 20%, Shares’ stock portfolio for 2022 also disappointed.

A year ago, we were aware that Russia might invade Ukraine but underestimated what such a move would have on inflation and interest rates, which in turn caused a terrible year for stocks and shares in general. Our portfolio struggled and we ended up with a 21.3% total return loss.

We suffered from the market rotation away from growth to value, meaning that stocks like sustainable wood technology play Accsys Technologies (AXS:AIM), which was on 40 times forecast earnings when we pitched it, were no longer in fashion. For the first time in many years, investors were no longer willing to pay a high multiple of earnings to own growth stocks that promised ‘jam tomorrow’.

Mega cap US technology companies like Alphabet (GOOG:NASDAQ) were out of favour, hurting out portfolio performance.

We also had too much exposure to consumer-facing companies and even when we picked a stock from the thriving energy sector, operational disappointments ultimately sank the performance of North Sea gas producer IOG (IOG:AIM), wiping out earlier share price gains.

There were still some winners in the portfolio. Tate & Lyle’s (TATE) shift to a strategy of focusing on speciality food and beverages in faster-growing markets has been a winner, driving an 11.5% total return for investors. On 10 November it unveiled a 20% increase in revenue to £849 million and a 29% increase in operating profit to £137 million.

Exchange provider London Stock Exchange (LSEG) achieved a 10% total return, delivering resilient earnings. A recent partnership with Microsoft (MSFT:NASDAQ) also created some buzz.

Cheap holidays outfit Jet2 (JET2:AIM) generated a 3.3% total return since we said to buy in December 2021 as it made a decent job of navigating a bumpy recovery for the travel sector.

Despite these bright spots, we are frustrated with the overall performance of the portfolio and hope to do better in 2023 with our new stock picks.

‹ Previous2022-12-22Next ›