The annual review of Money Observer’s unique Nifty Thrifty portfolio of 30 shares means we must re-assess the portfolio’s inaugural 14 shares added last June.

Only retailer Next survives; and 13 new shares have been added: Antofagasta, Cape, Eurasian Natural Resources, Ferrexpo, Greggs, Howden Joinery, IMI, Inmarsat, Invensys, New Britain Palm Oil, Restaurant Group, Senior and Spirax-Sarco Engineering.

Modelled on the Nifty Fifty shares that ruled the US market in the 1960s and early 1970s, the portfolio uses far sounder, value-based investment principles. It employs an algorithm that assesses three key criteria: value, as measured by the earnings yield; profitability, measured by return on capital; and financial strength, measured by Piotroski’s F_Score.    

The new shares were added to the portfolio on 1 June. Previous gains mean we have been able to increase the average amount invested from the original £1,000 to £1,100. The buying prices account for the £10 dealing charge levied by our sister website Interactive Investor as well as 0.5 per cent stamp duty.

A more detailed explanation of why I have chosen the new shares will appear in the July edition of Money Observer. I will also explain how I have tweaked the ‘Magic Formula’ behind the process and why I have limited the portfolio’s exposure to mining companies.

Followers of the portfolio can gain an early insight into the new constituents at http://www.moneyobserver.com/portfolio/nifty-thrifty-portfolio.