The seven weeks since the stock market peaked has been a testing time for Britain's 10 million newest shareholders, those who picked up windfall shares in the five mutuals that have converted into quoted companies this year.

The 100 top shares in the UK have fallen by an average 8.7 per cent since the all-time peak on 3 October and prices are still bouncing around like a yo-yo.

But windfall shares have actually bucked the trend in recent weeks. All five companies, Halifax, Alliance & Leicester, Woolwich, Northern Rock and Norwich Union, with recent windfall shares in issue, outperformed the index over the past seven weeks.

Norwich Union and Northern Rock are worth more than they were at the top of the market, and the other three are down only 3 to 4 per cent, half the market average.

Amanda Davidson, an independent financial adviser, said: "We have certainly been advising clients to hang on to their windfall shares, so I'm delighted that is borne out by the performance we've got here. It does show that people with windfall shares should think twice before selling them to go Christmas shopping."

Before drawing any conclusions from this, however, we should note a few caveats. First, we have measured the progress of windfall shares only over seven weeks, far too short a period to draw any firm conclusions. Second, the windfall index measures the performance of only five shares, all in the financial sector, which is not representative of the stock market as a whole.

But look a little further and the performance of our windfalls looks even better.

The 105 stocks in the financial sector are still, on average, 12 per cent below the peak last month, the 11 retail banks have fallen by more than one-sixth and the eight companies in the life assurance sector are down, on average, by about 1 per cent.

Ms Davidson said: "A lot of people who've got windfall shares are coming into the stock market for the first time, and they will find it terribly encouraging to see that their shares have done well. They've all, individually, done better than the FTSE 100."

Matthew Orr, of stockbrokers Killick & Co, believes one explanation for windfall shares climbing while others fall may be that institutions, such as pension funds, are still short of windfall shares in their portfolios. If this is the case, you would expect the institutions to become buyers when windfall shares weaken, immediately helping their price to bounce back.

Many investors also think their recent conversion to plc status makes all five companies candidates for merger and takeover activity in the sector.

Norwich Union is frequently mentioned as a tempting target for a bank to buy, and a far more profitable investment than those poorly performing investment banking subsidiaries. Norwich Union is also wide open for a hostile takeover bid, unlike the newly converted building societies.

They are protected from hostile takeovers for the first five years as public companies provided they themselves do not go on the acquisition trail.

It does not mean they would not look for a friendly merger if times get tough, which may be why Northern Rock shares are also resisting the downward trend.

These tentative results also underline the point that the companies which have issued windfall shares so far are generally viewed as sound investments.

- Paul Slade