Barclays, Lloyds and Royal Bank of Scotland, which are all up more than 35 per cent this year, take the top-three spots, with the likes of Cairn Energy, Vedanta Resources and Johnson Matthey close behind.
Top-10 best performing FTSE stocks of 2012
| Company | 2012 (%) |
| Barclays |
41.5 |
| Lloyds | 36.8 |
| RBS | 36.6 |
| Cairn Energy | 31.9 |
| Vedanta Resources | 28.7 |
| Johnson Matthey | 26.3 |
| IMI | 25.3 |
| Xstrata | 23.4 |
| Kazakyhmys | 22.5 |
| GKN | 22.4 |
Source: FE Trustnet
Many of the names in this list were among the worst performers of 2011, including Lloyds, which was down 59.4 per cent for the year, Vedanta Resources, which was down 57.1 per cent, and RBS, which was down 46.8 per cent.
The likes of Lloyds, Barclays and RBS have been unloved for some time and so the vast majority of funds haven’t benefitted from the strong performance of these companies.
FE Alpha Manager Ian McVeigh’s Jupiter UK Growth fund is among the very few to have fully participated in the rally; according to FE Analytics data, the manager holds all three retail banks in his top-10 holdings, as well as engineering group GKN.
Unsurprisingly, the manager’s high-conviction position in these companies has sent his fund towards the top of the performance table this year. Jupiter UK Growth has returned 13.02 per cent in 2012 – more than twice as much as the FTSE All Share.
Performance of fund vs sector and benchmark over 3-yrs
Source: FE Analytics
The fund has already recouped the losses it sustained last year and is now a top-quartile performer in its UK All Companies sector over three years, with returns of 71.69 per cent.
In the short-term, a high exposure to the retail banking sector has also paid off for Schroder Recovery and Fidelity Special Situations, which are up 13.4 and 9.60 per cent respectively this year.
The rally in many industrial stocks has been one of the contributors to the stellar performance of Standard Life’s range of UK equity funds. Ed Legget’s Standard Life UK Equity Unconstrained fund for example, which holds both IMI and GKN in its top-10, has 44 per cent of its assets invested in the industrial sector.
According to FE Analytics, Legget’s portfolio is the best-performing of its kind this year, with returns of 20.12 per cent.
With a growing number of industry experts predicting a sustained market upturn, there is much to suggest that cyclical companies will continue to outperform into the second and third quarters.
In a recent FE Trustnet article, the traditionally defensive Bill Mott said he was beginning to add cyclical names to his portfolio, while Schroder Global Equity Income manager Sonja Laud said she was poised to up her weighting as long as a Greek default is averted.
While Sheridan Admans, investment research manager at The Share Centre, thinks cyclicals will continue their upward surge for now, he is wary of risks in the medium-term.
"Any encouraging economic data and the Greeks' ability to meet the demands of the bailout should see cyclical stocks enjoy some benefit; however, we remain wary of the number of economic headwinds, which include the continued problems with debt stress in Europe," he said.
"We expect this and the levels of volatility to continue for some time to come."