Ten shares that kept on climbing in a yo-yo year for markets

The FTSE 100 has had a frantic year, reaching new heights before plumbing the depths. But builders proved to be the big winners

‘Peter & Wendy’, ITV’s new Peter Pan drama, will air on Boxing Day. The broadcaster has been one of the top performers on the market (ITV)

The Footsie has been highly volatile in 2015, climbing above 7,000 for the first time ever earlier this year, before slipping back below 6,000 this week.

You could be forgiven for thinking that any investors who have hung on for the market’s roller-coaster ride throughout the year will now be ruing that decision, with the value of their investments in tatters. But, in fact, the FTSE 100 started the year at 6,566. This means that after a slight recovery in the middle of the past week, it has only fallen by 7.7 per cent so far this year.

And as always there have been winners as well as losers over the past year; if you backed the right shares, you will still be able to afford a relatively lavish end-of-year celebration.

The biggest winners over 2015 have been the housebuilders. Taylor Wimpey has been the Footsie’s best-performing company, its shares having climbed by 45 per cent this year. Barratt Developments and Persimmon also both feature in the top 10, up by 32 per cent and 24 per cent respectively.

Business is booming because builders have been able to buy land at cheap prices and flog property at high prices while the housing market soars. In particular, government policy has been extremely favourable with initiatives such as the ongoing Help to Buy scheme, which gives cash to first-time homebuyers as long as they purchase new-build homes.

These different factors have all come together to create a positive aura around the builders, supporting margins, cashflows and dividends. However, these companies are not immune to changing fortunes – and once interest rates start rising, as they eventually will, then their long run of growth will come to an end.

Exactly when that will be is a matter of debate. “The Bank of England will have to raise rates eventually, but any increases are likely to be gradual,” said Danny Cox at the financial services company and fund supermarket Hargreaves Lansdown. “This suggests to me the purple patch could last a while longer.”

But stockbroker Liberum this week reiterated a growing view that the large housebuilders have had their run. It warned that the valuations of the three largest will come under pressure if gross margins peak in 2016 as selling price inflation cools but cost inflation does not. “We see better value in the [sector’s growing companies], especially Bellway and Gleeson,” it said.

Also performing well this year has been Hargreaves Lansdown itself, climbing 43 per cent in value as profits continued to grow throughout the year. James Hamilton, an analyst at the broker Numis, said: “The group’s scale benefits are unmatched, providing it with by far the highest operating margin and the buying power to provide the cheapest fund prices on the market.”

Still with financial services, the general insurer Direct Line has put in a strong showing over the year, with its share price climbing by more than a quarter. The group – which also includes the Churchill, Privilege and Green Flag brands – was sold off by Royal Bank of Scotland in 2012 and has since returned 87p, or 50 per cent, of its float price as dividends since its listing.

Other companies among the top 10 best performers for 2015 are the insurer Admiral – which owns the Confused.com comparison site – along with the construction and materials business CRH and packaging company Mondi.

Software firm Sage climbed 25 per cent, prompting Mr Cox to comment: “In an uncertain economic environment, businesses with recurring revenues, robust balance sheets and strong cashflows have been in demand. Sage ticks these boxes in my opinion.”

The company completing the top 10 winners is the broadcaster ITV, which has delivered regular profit upgrades driven by an improved advertising outlook and the acquisitions of production studios.

The losers the 10 worst performers of 2015

Investors backing commodity companies will have endured a harsh 2015. “The commodity rout has claimed numerous victims in 2015, not just in the oil and mining sectors but also in sectors servicing these industries,” said Mr Cox at Hargreaves Lansdown.

The most high-profile slumps were miners, with the share price of both Anglo American and Glencore falling by around 75 per cent. The companies were forced to cut dividends during the year to cope with the slide in prices of industrial metals. Other miners among the 10 worst shares were BHP Billiton, Antofagasta and Rio Tinto.

Industrial engineer Weir Group was also in the bottom 10, with its shares falling a third and being relegated from the Footsie.

Elsewhere the banking giant Standard Chartered fell 43 per cent, with emerging markets worries hitting profits and forcing a rights issue. Engineer Rolls-Royce and oil giant Shell both dropped 35 per cent, while the publisher Pearson lost 40 per cent.