This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Defensive stocks – fresh all-time highs in April
A flat index on the one hand, stock gains of up to 250% on the other.
What’s happening?!
Defensive stocks are the stars of 2016 so far. The UK 100 may be flat for 2016 but to leave it there would be doing the year-to-date performance of many of its constituent equities an injustice. The index has recently been enjoying an exciting 17% rally from the 3.5–year lows plumbed back in February. While some of the best performers of the year include the battered miners like Anglo American (AAL) and Glencore (GLEN), the gains were only to be had by those investors with the steely nerve to attempt to call the bottom, or those who then jumped on the handily provided momentum over the same period. It’s reassuring to know, therefore, that opportunities aplenty have presented themselves to the more risk averse investor too.
It’s certainly not a case of ‘all the depressed leading the rally.’ Amid the current recovery there is not one bank within the top 30 performers year-to-date. The banks are still buckling under pressure from above. This brings us to an important observation that we have noted of late. A whopping 20% of UK 100 companies have posted fresh all-time highs this year. 30% have done so since last October. 11% have managed the feat in April alone. None are miners and none are banks. In fact, most are defensive stocks.
All-time highs, you say?!
The table below highlights a selection of the stocks mentioned earlier that have posted fresh all-time highs within the last two weeks. The first thing you’ll notice is that these are not names that you see in the news every day. They are not the most exciting, yet they’re doing the most exciting stuff on the UK 100 currently!
UK 100 stocks that made fresh all-time highs in April
As defensive stocks (also known as non- cyclicals) they might even be considered boring by some. But perhaps that’s their beauty. They are calmer, less volatile. They just get on with things – in this case trending higher. Which is what you are looking for, no? Stocks that rise? In that case, what’s not to like?! If you want the lowdown on the full 30, an Accendo trader can provide it on request. Will your current broker do the same?
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Prepared by Michael van Dulken, Head of Research
