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UK shares have delivered fairly robust returns over the last six months, with the FTSE 100 delivering close to 9% total returns. Given its historical annual average has been closer to 6% over the last decade or so, that’s not bad.
But it pales in comparison to what some British stocks have delivered since September last year. In fact, looking across the entire FTSE All-Share index, the top five performing stocks have generated an average return of 70%!
Britain’s top five performers
In order of highest returns, the best-performing UK shares over the last six months are:
- International Consolidated Airlines, +92.4%
- Standard Chartered, +68.2%
- Ferrexpo, +65.6%
- Burberry Group (LSE:BRBY), +65.4%
- Rolls-Royce, +62.9%
It’s a relatively diverse collection of companies covering multiple industries, including banking, mining, travel, engineering, and fashion. And if an investor had put £1,000 in each back in September, their initial £5,000 portfolio would now be worth just over £8,500.
But what’s behind these impressive returns?
Zooming in
There are a lot of factors at play. Each business has its own set of drivers, resulting in superior returns. But let’s dive into the fascinating developments at Burberry. The high-end fashion house has been on quite a rocky path lately.
Poorly received creative choices from previous management caused the business to swing from profitability into the red, sending the stock plummeting by 75% between April 2023 and September 2024. Since then, the firm’s been scrambling to turn things around. So far, recovery plans seem to be going well.
Under the new leadership of Joshua Schulman, the business is shifting its product portfolio back in line with the tastes of its core customer base while also initiating cost-cutting initiatives.
Investors who placed their faith in Schulman’s strategy have, so far, been rewarded quite generously. And with the broader luxury market also seeing a welcome albeit slow rebound, Burberry’s upward momentum may be set to continue.
Nothing’s guaranteed
Investors are usually forward-thinking. This attitude seems to be present when looking at Burberry’s share price, given that the firm has yet to start delivering solid recovery financials. That means the success of Schulman’s turnaround plan is still unclear. In his own words, Burberry is still “very early in our transformation, and there remains much to do”.
Should the firm’s plans start to show cracks or take too long to deliver, investors may start to lose patience and begin looking for opportunities to abandon ship. That’s why, when looking for top-notch stocks to buy right now, Burberry isn’t on my list.
It’s a similar story for the other UK shares highlighted. Before parting with any capital, investors need to dig into the details and discover both the potential risks as well as the rewards.