FEATURE: ANALYSIS
FTSE indices, are responsible for
STATS.
determining policy issues and
overseeing the periodic reviews of
the indices.
TABLE 1: ANNUAL FTSE 100 PERFORMANCES TABLE 2: THE HIGHLIGHTS
Capital Total Return
Index peak
THE SMALL-CAP BUBBLE BURSTS
Full year Cumulative Full year Cumulative 6930.2 30/12/99
At the launch of the index in 1984 the
performance 2/1/84=1000 performance 2/1/84=1000
Index trough
100 constituents represented
84 23.2 1232.2 29.1 1290.6
978.7 12/7/84
approximately 71% of the UK’s equity
85 14.6 1412.6 19.9 1547.2
Best day
market capitalisation – today, it is
86 18.9 1679.0 23.8 1915.2 9.8% 24/11/08
88%. Consequently, a high correlation
87 2.0 1712.7 5.8 2026.8
of 99% has been maintained between
Best month
88 4.7 1793.1 9.6 2222.2 14.4% 01/89
the performance of the FTSE 100 and
89 35.1 2422.7 41.0 3134.1
the All-Share index.
Best quarter
While broad trends have been
90 -11.5 2143.5 -7.0 2914.6 18.9% Q1/87
maintained between the two indices,
91 16.3 2493.1 22.0 3556.7
Best year
there have been periods when a
92 14.2 2846.5 19.6 4255.6
35.1% 1989
signifi cant gap in aggregate performance
93 20.1 3418.4 25.0 5320.8
Worst day
has opened up, notably over the 2003
94 -10.3 3065.5 -6.7 4966.6
-12.2% 20/10/87
to 2006 period. During this time the
95 20.3 3689.3 25.4 6226.9
segments of the UK market outwith the
96 11.6 4118.5 16.1 7231.7
Worst month
-26.0% 10/87
FTSE 100 coverage – notably the FTSE
97 24.7 5135.5 29.1 9334.7
250 and FTSE SmallCap segments – 98 14.5 5882.6 17.4 10961.1
Worst quarter
-27.6% Q4/87
surged ahead of the large company 99 17.8 6930.2 20.5 13202.9
sector. Over the period 2003 to 2006 00 -10.2 6222.5 -8.3 12106.1
Worst year
the FTSE 250 index and the FTSE
-31.3% 2008
01 -16.2 5217.4 -14.1 10404.4
SmallCap index posted gains of 159%
02 -24.5 3940.4 -22.1 8104.1
Most volatile* month
and 161% respectively. Th e FTSE 100
80.2% 10/08
03 13.6 4476.9 17.7 9536.1
posted a relatively modest gain of 58%
04 7.5 4814.3 11.1 10591.7
Most volatile* quarter
over the same time. But, inevitably, the
56.6% Q4/08
05 16.7 5618.8 20.5 12758.1
bubble had to burst. Last year may have
06 10.7 6220.8 14.2 14573.2
Most volatile* year
been the worst year on record for the
FTSE 100 index with its fall of 31%;
07 3.8 6456.9 7.0 15589.1
35.0% 1987
the FTSE 250 and FTSE SmallCap
08 -31.3 4434.2 -28.4 11166.0 *Annualised standard
deviation
suff ered even more, falling by 40% and
61% respectively. (See fi gure 1.)
FIGURE 1: FTSE 100 Vs ALL SHARE EX FTSE 100
WHERE ARE THEY NOW?
Table 3
FTSE 100 All Share ex FTSE 100
traces the fortunes of the 12000
original FTSE 100 constituents. As
such, it presents an interesting record
10000
of activity within the UK corporate
sector over the past quarter century.
8000
BP headed the rankings by size 25
years ago and still does. Interestingly, its
6000
current market capitalisation of £99
billion is only fractionally less than the
entire capitalisation of the FTSE 100
4000
stocks at the launch of the index. Th e
oil sector today accounts for 23.2% of
2000
total index capitalisation; the equivalent
fi gure in January 1994 was 15.8%.
0
83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Financials accounted for 17.6% of
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