Since the beginning of 2023, only Podravka out of all CROBEX10 constituents outperformed the index itself more than 50% of the time. However, 4 out of 10 constituents outperformed the index as a whole in terms of YTD yield. This might be an excellent example for owning an index as a whole, as the benchmark for all those yields is the one of 28% from CROBEX10 and more than half of constituencies underperformed CROBEX10.

Today, we decided to bring you an overview of how well the CROBEX10 constituents as well as the index itself perform thus far in 2023, as well as how often the constituents outperformed or underperformed compared to the index. It should be noted that looking at just the percentage of days that individual companies outperformed the index might not tell a full story, as on some days they might underperform/outperform by a larger percentage than others. Still, this can be used to gauge the general trend of the performance.

How often did CROBEX10 constituents outperform the index (%)

Source: InterCapital Research, Bloomberg

Since the beginning of this year, only Podravka out of all CROBEX10 constituents performed better than the index more than 50% of the time. This translated into a strong return from Podravka that amounted to as much as 72.3%! At the beginning of the year, Podravka traded at EV/EBITDA of 7.8x, while currently it’s trading at 11x taking trailing 12M results into account.

Now the question is, how does this correlate to CROBEX10, as well as the performance of the individual constituents in the period? As we mentioned, just because some companies outperformed/underperformed compared to the index, as a percentage of days, does not mean that they did worse in terms of returns to investors. Take the following example: Ericsson NT, which outperformed the index “only” 45.4% of the days, had a decline of -10.3% over the period (vs. 28% CROBEX10 growth!). On the flip side, Atlantska Plovidba, which outperformed the index 52.8% of the time, gave a return of 20%. We can see that the correlation between outperformance/underperformance is not that strong, but more of a general „direction“ (be it negative or positive) that the company might go to. HPB, which outperformed the index by only 47% of the days, gave the strongest return of 72.6%. Overall, the index itself yielded a strong double-digit 28% return in this period.

Performance of CROBEX10 and its constituents, YTD (%)

Source: InterCapital Research, Bloomberg

What can be taken from this is that factors outside trading amount or day-to-day performance play a significant role in the performance of individual companies. For example, Končar and Span, which noted a steep double-digit growth of 62.9% and 43.4% YTD, respectively, yielded as much on the back of strong results and positive industry sentiment.