Can you make good returns from a highly concentrated selection of domestic-focused, UK-listed stocks? While reputation would suggest not, our Best of British screen begs to differ.
In the 13 years we have been following it, the stockpicking method has posted an average headline return of 10.4 per cent, or three percentage points per year better than a standard market tracker. Doubling down on the screen’s methodology and focusing on the five stocks that most closely match its demanding criteria would have yielded a 12.7 per cent compound annual rate of return, assuming all dividends were reinvested.
It’s not quite the S&P 500, which has averaged a sterling-denominated annual total return of 15.9 per cent over the same period. But the screen’s success shows that it is still possible to generate alpha from two unlikely sources: a frequently middling UK economy, and a fairly standard approach to quality…
