Contrarian Investor: Quality rules… or does it?

clock
Contrarian Investor: Quality rules… or does it?

Is the FTSE 100 a classic cyclical play or a quality stock lover's nirvana? The index is seen by many as an overly cyclical index, which is dependent on interest rates and oil prices, but the contrarian investor might take a different view.

The FTSE 100 arguably boasts a world class collection of quality stocks, with relatively low levels of volatility and decent returns.  I recently analysed five classic quality stocks (Reckitt, BAT, Diageo, Unilever and Imperial) plus a higher-quality defensive stock, National Grid. These six stocks have contributed a chunky 23% of total returns for the FTSE 100 index over the past five years. Looking at the returns, it is easy to see why so many investors have rushed into a quality trade. Over the five years, they have all returned more than 50%, with low levels of realised volatility...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Equities

Ken Wotton and Brendan Gulston, co-managers of the LF Gresham House UK Multi Cap Income fund

Five rules for resilience amid rocky markets

Barrage of headwinds

Ken Wotton and Brendan Gulston
clock 04 August 2022 • 5 min read
Chris Hutchinson of Unicorn Asset Management

The Big Interview: What I learned after being dropped from Hargreaves Lansdown's Wealth Shortlist

'I’ve no interest in falling out with people'

clock 04 August 2022 • 6 min read
Darius McDermott, managing director, FundCalibre

FundCalibre elite radar: ASI Global Smaller Companies

'Good contender'

Darius McDermott
clock 01 August 2022 • 4 min read
Trustpilot