Winter Portfolio: Finish with a flourish

With less than two weeks to go until Interactive Investor's inaugural seasonal trading strategy comes to an end, investors who bought either of our Winter Portfolios will be sitting on a tidy profit. There have been far more ups than downs since its inception in November, and the six-month trade is certainly finishing with a flourish.

But we shouldn't really be surprised. We asked Harriman House, publishers of The UK Stock Market Almanac, to run the numbers, which we then fine-tuned to generate even bigger potential profits.

The stocks included in both the Consistent and Aggressive Winter Portfolios were chosen precisely because they had regularly delivered big returns over the past decade. The former boasted the most positive annual returns over 10 years, generating an average annual return of 26%. The latter was more flexible on track record, but the extra risk is rewarded with potentially higher returns - an average of 37%.

Currently (Thursday PM), the consistent portfolio is up 15.6% compared with the FTSE 350 benchmark index up a more modest 10.5%. The aggressive portfolio has risen 13.9%, still one-third more than the benchmark.

April has been by far the best month for both portfolios

Speciality chemicals star Croda was the only stock in either basket of shares that could boast a perfect record of 10 out of 10 winning years. It will surely be 11 out of 11 after soaring by over 25% since October. Fund manager Henderson is up more than 40%, workspace provider Regus nearly 23% and industrial equipment rental company Ashtead over 7%.

Only oil services provider Hunting has disappointed, falling 18% as the oil price crash caused havoc with forecasts and had investors fleeing the sector. If Hunting shares had traded flat, the portfolio would be up over 19%. However, things could have been much worse. As recently as last month, the share price was down more than 40%, but Hunting has tracked a sharp rally in oil prices, and any further upside there will reflect favourably on the shares.

Oddly, the aggressive portfolio, which had historically generated the higher gains for a bit of extra risk, has underperformed its more reliable cousin.

Ashtead and Regus feature here, too, and housebuilder Taylor Wimpey has rocketed 39% as the housing boom shows little sign of cooling. Internet gambling technology firm Playtech had a few hiccups early on, but has had a strong run and now trades up 10% on its starting price.

Again, the portfolio is let down by one stock; this time online gaming group Bwin.Party Digital Entertainment. It's lost almost a tenth of its value, but had been up as much as 31% in December on talk that a bidder was preparing to pounce. The company had already confirmed it was talking to interested parties, but they eventually came to nothing. Had the shares sustained that kind of performance, the aggressive portfolio would now be up 25%.

The six-month winter trading strategy ends on 30 April. Previously, the summer has been almost a no-go area for some investors, choosing to sit out the quiet warmer months, which have acquired a reputation for underperformance.

However, research by Interactive Investor and Harriman House has uncovered a portfolio of very different stocks, which have outperformed the FTSE 350 in the summer months by a substantial margin.

Summer Portfolios - now you don't have to sell in May and go away

Winter has, historically, been a more profitable period for investors, while the summer months have tended to be quieter as the City's big-hitters leave the Square Mile for Saint-Tropez, Lake Como or The Hamptons.

Investors will have heard the saying "Sell in May and go away, don't come back till St Leger Day," usually in the second week of September. But this strategy has become less relevant in recent years.

While our research reveals that the FTSE 350 has risen by an average of just 0.3% each summer over the past decade, we have identified a portfolio of five stocks which have consistently outperformed the index every year since at least 2005, and by an average 8.6%. In that time, this Consistent Summer Portfolio - our summer smoothie - has only lost money in one year - 2008.

After screening for stocks that have been listed in the FTSE 350 index for a minimum of 10 years, we picked the five with the best record of positive returns over the summer period - three have a 90% success rate and the other two 80% - and which had generated the highest average returns between 1 May and 31 October.

A slightly more aggressive portfolio - our summer sizzler - required some fine-tuning, as did our successful Aggressive Winter Portfolio. Here, we relaxed the criteria very slightly, but still demanded a minimum nine years as a FTSE 350 company and a positive return at least 70% of the time. After stripping out stocks whose results were skewed by big one-off years, we were left with the five shares which had outperformed the benchmark index every year for the past decade, but this time by 14.2%. Again, it only lost money in 2008 - last year it was up 23% over the summer.

We'll be revealing more details over the next few weeks until launch day on Thursday 30 April. We will also publish a full round-up of our Winter Portfolio in early May.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.