Performance of UK Growth Shares

I read with interest the article by Tim Steer of the Artemis UK Growth Fund in the Business section of The Sunday Telegraph on 26th May 2013.  Tim presented some statistics to try to show, by pairing companies such as Apple with ARM and Inditex with Next, that British megastocks performed better.

There are a number of flaws in Tim’s arguments:-

1. His pairing is a very random process helped massively by the benefit of hindsight.  I prefer a more broad-brush representative approach by comparing the performance of the Dow and the FTSE 100 indicies.  Over the last five years the Dow is up 22.8% whereas the FTSE is up only 11%.
2. More importantly, during the five year period, sterling fell 31% from 1.98 to 1.51 against the dollar.  In sterling terms therefore this lifts the Dow’s performance to a gain of 61%.
3. I would like to make it clear that I am not against investing in well-chosen British growth stocks.  During the last five years the UK Artemis Growth Fund grew 47% against the UK All Companies gain of 34%.  However, in order to help Tim to make his point, I think it is only fair to draw attention to my son’s UK fund, MFM Slater Growth, which enjoyed a gain on 110% during the same period.

Jim Slater