Here is the YTD performance summary of the 10-share low price--to-book portfolio taken from the lowest price/book decile of the JSE ALL STOCKS universe on 3 March 2009. They represent the 10 lowest price/book shares on the JSE at the time.

Although the performance looks bad against all the other strategies we are tracking, you must bear in mind that this is taken from the ALL-STOCKS universe, and will have smaller less liquid issues than other strategies we track. In addition these represent the deepest value shares on the JSE at the time of inception, and are thus by design, out-of favour and neglected stocks. These risks will (hopefully) be rewarded with superior returns over a 12 month period. You will note that this portfolio has doubled its % gain since our last blog entry, and is showing early signs of gathering momentum.

Our Price-to-Book backtests, coupled with various international research have shown that this deep-value strategy can deliver exceptional returns over time, but you need to be patient as these issues will come to the fore in the 2nd phase of a bear market recovery (as opposed to the other strategies that are enjoying 1st phase attention).