Business & Investment

Two common features of the best FTSE 100 strains of the past year

There have been four in the last year FTSE 100 The stock I could have bought would have doubled my money. Expanding this to the top 10 companies, the lowest return was still impressive at 77%. To think about where to look next year, I think it’s a good idea to look at the common characteristics of the best FTSE 100 stocks these days.

Pandemic bounce

A key feature that is immediately apparent is that most of last year’s top-performing FTSE 100 shares were actually the hardest hit during the 2020 stock market crash.

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For example, these include: Rolls Royce When IAGBoth suffered blockade restrictions and lack of travel.It also includes the following product inventories: Glencore When Royal Dutch shell..Oil was easily traded in one of the most unusual events I’ve seen in financial markets Negative price..

But the market quickly put these things in the past. For most of the past year, the stock prices of each company have risen. So, in the future, I think the FTSE 100 stock of this kind, gained from a global recovery, has the potential to expand further.

One of the risks of these FTSE 100 stocks is that the time frame can distort long-term performance. For example, Rolls-Royce’s share price could rise 128% in a year to trade at 142p, but still a bit off the 220p + level seen in early 2020. Therefore, when trying to understand the numbers, you need to be careful to jump to the conclusion.

Bank of profit

Another notable feature of the best performing FTSE 100 stock is the presence of banks. Natwest, Lloyds, When Barclays All features that provide very strong returns in the last year.

Part of this is due to the pandemic bounce above. Banks were beaten hard during the stock market plunge, as investors feared large loan defaults from clients. This was not the case as many banks are reducing their expected impairment costs.

Another point that has supported banks during the summer is higher inflation. This is usually not suitable for many FTSE 100 strains. However, banks are benefiting because the Bank of England is likely to raise interest rates soon to offset rising inflation. This should allow banks to increase the difference between the interest rates they lend and the interest paid on their deposits.

So while we’re having a hard time seeing the high profits we’ve seen in the last 12 months reappear, I think bank equities are still doing well.

Best FTSE 100 Stock Theme

If you’re already seeing big profits and are worried about buying the best performing FTSE 100 stocks, you can take a core theme and look for more undervalued stocks.

Looking for a company It can be profitable From higher inflation and interest rates. We are also looking for sectors that should benefit from normalization since Covid-19. With this in mind, we hope to buy the best 100 FTSE shares right now so that we can hold them next year and beyond.

Jonathansmith1 does not have a position in any of the shares mentioned. The Motley Fool UK recommends the Barclays and Lloyds Banking Group. The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by exploring different insights, Better investors than us.

Two common features of the best FTSE 100 strains of the past year Two common features of the best FTSE 100 strains of the past year

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