23yr 83% success rate

Since 1992 the UK 100 index has risen 19 times (83% of the time) from early-November to end-December with performance ranging between a soft 0.2% and an impressive 10.3%. On 11 occasions gains topped 3.0% while the average return for the period is a handsome 3.2%.

Disappointments belong to 1994 (-2.2%), 2000 (-3.3%) as the Tech bubble began to deflate, 2002 (-3.7%) just before the market bottomed out in Mar ‘03 before rallying 100% to financial crisis in 2007. The best years still belong to ‘92 (5.5%), ‘93 (10.5%), ’97 (8.3%), ’98 (7.7%) and ’99 (6.1%) and ’08 (4.8%).

UK Index still to play catch-up?

• It’s encouraging to see in the below table the UK’s UK 100 still has the best record for rising from early-Nov since 1995.

But it also shows the UK Index still underperforming peers by up to 17% – that’s a bigger gap than last year’s maximum 12%. Does this make an even stronger case for a reversion towards the mean by the UK Index ?

No guarantees, but statistics support

This report is designed to help you identify how the blue-chip equities you like have fared over the last 20 years and to decide which could offer you the best trading ideas as 2015 draws to a close.

There is no guarantee that the tallies of success will increase or that the average gains will hold. With history and a weight of data addressing both boom and bust periods, however, the probability is high. After a particularly volatile run-up, the UK 100 could be well positioned for a solid Santa Rally.

Note that we could have looked at just the last few years, when the market was recovering from its financial crisis lows with help from central banks. However, this would boost the average year-end performance unfairly, hence our averaging of the maximum amount of data available to provide you with a more realistic, albeit potentially more conservative observation from which to work.

Will 2015 be an up year?

After making new all-time highs in April, jitters about global growth (China, Eurozone), a third Greek bailout and the US continuing to push back monetary policy normalisation (now slated for 2016) saw markets engage in considerable volatility culminating in a hard sell-off in late August.

Equity markets are now trending upwards from 24 August lows, yet remain some way from those highs of earlier in the year. A trip back to April all-time highs for the UK Index implies 11% upside from late October levels. But even if Eurozone/China woes scupper things again, it’s not a problem – you can also trade short.

To find out which UK 100 stocks tend to fare best from early-November, read on…