More than a feline

Schrodinger selected a share portfolio and beat some fund managers, writes Paul Slade

A cat selecting small company stocks for a dummy share portfolio has beaten the sector's professional fund managers in his first year.

Schrodinger, our feline financier, picked his stocks by choosing 35 pieces of dry catfood from a grid of 250 numbered squares, representing companies in the FTSE mid-250 index. We called the resulting portfolio the Consolidated Accumulation Trust - or CAT for short.

In the year to 12 August, CAT's value, with net income reinvested, grew by 4.35 per cent. The average UK Smaller Companies unit trust grew by just 3.25 per cent in the same period. CAT also substantially outperformed its benchmark index, which grew by only 0.37 per cent.

Alan Gadd, managing director of HSBC Asset Management, says: "With the rise in sterling, the smaller companies sector has been particularly difficult since the beginning of the year, so Schrodinger's numbers are pretty good.

"Nine out of 10 investors would be very happy with that performance."

Richard Wastcoat, who heads Fidelity's European retail operation, adds: "He's done 4.35 per cent, the index has gone up 0.37 per cent, and the average fund has gained 3.25 per cent, so he's doing pretty well. He'd be all right for his bonus - he'd be getting that extra bowl of milk."

Schrodinger's performance over the past three months has been even more impressive. CAT grew in value by 5.71 per cent over that period, while every real trust in the sector fell.

This came thanks to a strong performance from portfolio selections such as St James' Place and Scottish Hydro, two of Schrodinger's shrewder selections, which rose 116 per cent and 43 per cent respectively.

Matthew Harragin, a director at stockbrokers Albert E Sharp, says: "CAT has picked some winners, like St James' Place, which has done extremely well, and the portfolio looks well-balanced. Schrodinger hasn't been getting stale brokers' stories, so he brings a fresh approach."

CAT's nearest rival in the last quarter has been Baring UK Smaller Companies, which lost 0.4 per cent.

The average decline in the sector over three months was 5.47 per cent.

Amanda Davidson of independent financial advisers Holden Meehan says: "If my cat turned in such a good short-term performance, I'd be the one who lazed in the sun, and she could do the work."

On a one-year view, CAT ranks at number 31 in a field of 76 UK smaller companies trusts. This puts Schrodinger comfortably into the second quartile, in the same bracket as well-respected managers such as Clerical Medical, Flemings and Sun Life.

The best-performing fund in the sector over one year was Baring UK Smaller Companies, which showed growth of 9.73 per cent over the year. The worst was Guinness Flight's Granville Smaller Companies, which lost 12.76 per cent of its value.

We have also been measuring CAT's performance against trusts in the UK Equity Growth sector, despite the fact that it suffers from considerable disadvantages in that arena.

Unlike real equity growth managers, Schrodinger has not had the opportunity to dump his worst performers, or to select stocks from the FTSE 100 list of the UK's largest companies.

Ms Davidson says: "At the moment, Schrodinger really should be judged against UK smaller companies, because that's all he's been allowed to invest in.

"Trusts in the UK Equity Growth sector have been allowed to invest in larger companies and, of course, that's where the growth has been."

Given these disadvantages, CAT stands up remarkably well among UK Equity Growth trusts. Its growth in the last quarter puts CAT at number 85 in a field of 166 trusts, near the top of the third quartile.

Now we plan some changes to rebalance CAT's portfolio to bring it properly into line with the UK Equity Growth sector.

As of 13 August 1997, we are dumping the 10 worst performers in the current portfolio and allowing Schrodinger to select 10 more FTSE 100 stocks as replacements, using the same method he used to pick the original shares.

Faced with a smaller grid a few days ago, this one representing the FTSE 100, Schrodinger picked: Abbey National, BTR, Cadbury Schweppes, General Electric, Grand Metropolitan, Great Universal Stores, Lasmo, Pearson, Reed International and Reuters Holdings.

Will these choices prove to be the CATalyst which CATapults Schrodinger to new heights, or has he picked a load of old dogs? Join us here in three months to find out.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Sport
Harry Redknapp. Mark Hughes and Ryan Shawcross
footballNews and updates as Queens Park Rangers host the Potters
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
New Articles
i100... with this review
Voices
Holly's review of Peterborough's Pizza Express quickly went viral on social media
New Articles
i100
Arts and Entertainment
musicHow female vocalists are now writing their own hits
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
Finacial products from our partners
Property search

Scottish independence: How will kilt-edged stocks fare?

Scottish companies were caned when the separatists surged in the polls. Is this the future, asks Simon Read, and would they be any better together?

Two million first-time buyers are locked out

The drought in lending to people with low deposits has created legions of frustrated buyers, writes Emma Lunn

Leaving money to charity in your will could help reduce the tax bill for your loved ones

Next week has been designated "remember a charity in your will week", to put the focus squarely on the subject
Money is slipping through our fingers: the UK is falling behind other countries in the amount we put away

How to save money: UK is crashing down the European league table for putting money away

The UK has slipped to 11th in the latest European league table of savers. Rob Griffin checks out the best options

Energy firms found guilty of bad practice could have licences revoked under Labour government

Caroline Flint, the shadow energy secretary, says a Labour government would create a new energy regulator

A student's guide to financial survival: You don't have to drown in debt at university

Fresh from A-level delight, the moment does not have to be soured by students resigning themselves to thousands of pounds worth of debt in three years' time. Rob Griffin sees how to pass the university challenge

'Dismal' eurozone data sparks concerns

European Central Bank chief Mario Draghi is under pressure to launch promised stimulus before the EU slides further
Love but not marriage: property is one area where cohabiting couples are in danger of losing out

How couples can protect their financial interests when cohabiting

People who simply live together cannot assume they have the same rights to each other's assets as spouses or civil partners. Michelle McGagh sees how they can protect their financial interests
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Day In a Page

    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam