THISDAY Model Portfolios Generate 12.9 % Return in 14 Weeks

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THISDAY Model Portfolio, consisting of five different portfolio types constructed individually in conjunction with five leading stock broking firms in the country with different investment objectives, has generated a total return of N6.5million, about 12.9 per cent on a combined hypothetical portfolio value of N50million deployed 14 weeks ago. This was an across –the board improvement when compared with the return two weeks ago (September15-N6.3m (12.7%).

THISDAY Model Portfolio, an initiative of THISDAY Economic and Financial Intelligence Unit (TEFIU), is designed to enable leading stockbrokers and investment houses in the country share their trading skills and methodologies with ordinary investors.   The investment houses involved in the project are Afrinvest Limited, FSDH Securities Limited, Capital Assets Limited, Meristem Limited and Lead Advisory Limited.

The project, which began 14 weeks ago ( July 3, 2017) involved asking each of the partner stock broking houses in the country to construct a portfolio of 10 stocks selected according to their individual best judgement and using their best and well tested stock selection and investment strategies. They were then asked to each deploy an imaginary fund of N10million (ten million naira) to invest on the 10 stocks in whatever proportions they considered best.

Analysis of the return indicates that portfolio C still generated the highest return of N2.3m on the N10m deployed representing 23.3 per cent gain, compared with its performance on September 15-N2.3m (21.7%).   Portfolio D generated the second highest return of N1.7m (16.8%) compared with N1.6m (16.1%) for September 15; followed by Portfolio B with a return of N1.4m (14.0%) compared with N1.2m (12.3%) September 15 performance. Portfolio A came fourth with a return of N0.9m (9.4%) compared with N0.9m (8.4%) for last September 15 while Portfolio E generated N0.1m (1%) trailing behind all the other four and also a drop when compared with its performance during the report period of September 15.

Interestingly when the reports were further analysed, it showed that in the space of three months, some stocks in the THISDAY Model Portfolio (TMP) have fetched returns above 50 per cent.

A security in one of the portfolios ended last Friday with gain of 55 per cent, all other nine stocks also closed positively. The lowest gain in this particular is 2.5 per cent while the highest growth is 55 per cent. Other gains are: 39.9 per cent; 35.4 per cent, 28.4 per cent; 18.3 per cent; 16.1 per cent; 14.1 per cent and 5.4 per cent. In all, the average return so far recorded by this portfolio is 23.3 per cent.

Another portfolio under the TMP has so far returned an average of 16.7 per cent. In terms of individual stock in this portfolio, only two recorded decline. The highest gain is 54.9 per cent. It also recorded growth such as 14 per cent; 16.1 per cent; 29.2 per cent and 35.4 per cent.

Similarly, the third portfolio has recorded an average gain of 16.1 per cent. However, it recorded declines others ended with gains ranging from 1.4 per cent to 35.5 per cent.

What this means is that if each portfolio had actually deployed the N10million available to it, it would have generated the reported return on the investment.

THISDAY Model Portfolio, an initiative of THISDAY Economic and Financial Intelligence Unit (TEFIU), is designed to enable leading stockbrokers and investment houses in the country share their trading skills and methodologies with ordinary investors.