Bashed banks: Are 'shadow banks' the real opportunity?

Banking stocks have underperformed at a time when they should be considered a prime investment. Instead, pseudo-banks are emerging as the real game-changers, says Walker Crips' Chris Kitchenham

Banks have traditionally been core holdings in most portfolios and, despite the sharp falls since the heady days of 2007, the sector still makes up 11.3% of the FTSE All-Share. However, recent returns have been poor and this is unlikely to improve in the short term. Over the past five years, the FTSE All-Share index has generated a total return of over 52%, with the FTSE Banks index returning a mere 11%. During 2014, this trend has continued with the FTSE All-Share returning 1.1% and FTSE Banks down 5.1%. A prime investment This poor performance has been during a period when ban...