UK equity indices performance – 2015: Y, 2H, 4Q

The following charts plot the performance of UK equity indices in 2015 for the whole year, second half and fourth quarter.

Full year

Index returns for January – December 2015

UK equity indices 2015

Second half

Index returns for July – December 2015

UK equity indices 2015 2H

Fourth quarter

Index returns for October – December 2015

UK equity indices 2015 4Q

 

Consolidated

The above three time periods (1Y, 2H, 4Q) are consolidated into the one chart below.

UK equity indices in 2015 (4Q, 2H, Y)

The following table summarises the data for the chart.

Index TIDM 2015 4Q 2015 2H 2015 Y
FTSE 100 3.0 -4.3 -4.9
FTSE 100 Index – Total Return 3.7 -2.6 -1.3
FTSE 250 4.5 -0.6 8.4
FTSE 350 3.2 -3.6 -2.8
FTSE AIM 100 6.1 4.2 14.4
FTSE AIM All-Share 1.9 -2.2 5.2
FTSE All-Share 3.3 -3.4 -2.4
FTSE All-Share – Total Return 4.0 -1.9 1.1
FTSE Fledgling 0.4 -2.6 12.7
FTSE SmallCap 3.5 -0.8 6.2
FTSE TechMARK All Share 8.1 5.6 9.9
FTSE TechMARK Focus Index 8.5 6.5 14.4
FTSE UK Dividend Plus -1.0 -7.3 -3.3
FTSE4Good UK 3.1 -3.0 -2.3
FTSE4Good UK 50 2.5 -4.3 -5.3

 

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Will 2015 be the first 5th year of decade to end down since 1945?

Since 1875 the UK market has seen negative annual returns only twice in the fifth year of the decade. As can be seen in the accompanying chart, since 1875 the down years were 1915 and 1945 (and 1945 was down only 0.6%).

Annual returns for 5th year of decade [1801-2015]

As of the close 24th December the FTSE All-Share index was at 3449.5, (2.4% below its 2014 close of 3532.7).

The market has three days to climb above 3532.7 and end the year in positive territory.

Update

The answer to the heading is: yes. The FTSE All-Share index ended 2015 at 3447.46: down 2.41% on the year.

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2Q 2015 UK equity markets performance

The following chart shows the performance of the main UK stock market indices in the second quarter 2015.

2015 2Q UK equity markets returns

As in the first quarter, small caps easily out-performed large caps.

Data

The data for the above chart is shown in the following table.

Index 2Q 2015 Rtn(%)
FTSE Fledgling 7.7
FTSE AIM All-Share 5.5
FTSE AIM 100 4.8
FTSE 250 2.6
FTSE SmallCap 1.7
FTSE TechMARK Focus Index 0.1
FTSE All-Share – Total Return -1.6
FTSE UK Dividend Plus -1.7
FTSE TechMARK All Share -1.9
FTSE All-Share -2.5
FTSE 350 -2.7
FTSE 100 Index – Total Return -2.8
FTSE4Good UK -2.9
FTSE 100 -3.7
FTSE4Good UK 50 -4.0

1H 2015

The following chart shows the performance of the main UK stock market indices in the first half of 2015.

2015 1H UK equity markets returns

 

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2015 1Q market review – comparative performance of UK equity indices

The following chart shows the performance of the main UK stock market indices in the first quarter 2015.

UK indices comparative returns 2015 1Q

The relative performance was fairly typical for a first quarter (e.g. 2014 1Q). For example, small and mid-caps (e.g. FTSE Fledgling, FTSE 250 and FTSE SmallCap) greatly outperformed the large caps (FTSE 100).

Data

The data for the above chart is shown in the following table.

Index 2015 1Q Rtn(%)
FTSE Fledgling 7.4
FTSE TechMARK Focus Index 7.3
FTSE 250 6.2
FTSE TechMARK All Share 6.1
FTSE UK Dividend Plus 6.1
FTSE SmallCap 5.3
FTSE AIM 100 4.8
FTSE All-Share – Total Return 4.7
FTSE 100 Index – Total Return 4.2
FTSE All-Share 3.7
FTSE4Good UK 3.7
FTSE 350 3.6
FTSE 100 3.2
FTSE4Good UK 50 3.0
FTSE AIM All-Share 2.0

 

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Sell in May (risk-adjusted returns)

The Sell in May effect (also known as the Halloween or Six Month effects) describes the tendency of the stock market to perform strongly in the period November to April in comparison to the period May-October. This effect has been observed in markets worldwide and has existed for many decades.

The following charts analyse this effect by looking at the performance of three portfolios:

  1. All Year portfolio – this portfolio is 100% invested in the FTSE All Share Index all year round
  2. Winter portfolio – is 100% invested in the FTSE All Share Index only in the months November to April (and is out of the market for the other half of the year).
  3. Summer portfolio – is 100% invested in the FTSE All Share Index only in the months May to October (and is out of the market for the other half of the year).

Cumulative returns

The following three charts plot the performance of the three portfolios to the present day from 1984, 1994 and 2004.

 

Sell in May (1984-2014)

Sell in May (1994-2014)Sell in May (2004-2014)As can be seen the divergence in performance between the Winter and Summer portfolios is quite remarkable.

CAGR

The following chart partly summarises the performance by plotting the CAGR (compound annual growth rate) for the portfolios over the three periods.

Sell in May (CAGR) [2014]The two features to note are the CAGR for the Winter portfolio is greater than the CAGR for the All Year portfolio for all three periods, and that the CAGRs for the Summer portfolio are negative for all three periods studied.

Volatility

The following chart shows the volatility of the three portfolios over the three periods. In this case volatility is calculated as the standard deviation of the portfolio daily returns.

Sell in May (Volatility) [2014]The features to note here are that the Winter portfolio consistently has the lowest volatility in each period, while the Summer portfolio has the highest. An explanation for this might be that the most volatile period of the year for the stock market has historically been September-October.

So, beyond superior returns, a feature of the Winter portfolio is that it avoids the most volatile period of the year..

Sharpe Ratio

The following chart to some extent combines the previous two into one by plotting the Sharpe Ratio for the three portfolios over the three periods. The Sharpe Ratio is one method of measuring the risk-adjusted returns of a portfolio.

Sell in May (Sharpe Ratio) [2014]With its superior returns and lower volatility the Winter portfolio can be seen to quite easily have the highest Sharpe Ratios for all three periods studied.


 

Other articles on the Sell in May effect.

 

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2014 1Q market review – comparative performance of UK equity indices

The following chart shows the performance of the main UK stock market indices in the first quarter 2014.

UK indices comparative returns 2014 1Qb

Continuing the trend of 2013, the FTSE Fledgling, 250 and Small Cap indices out-performed the FTSE 100.

The data for the above chart is shown in the following table.

Index 2014 1Q Rtn(%)
FTSE Fledgling 5.0
FTSE 250 2.1
FTSE SmallCap 0.9
FTSE AIM All-Share 0.0
FTSE UK Dividend Plus -0.3
FTSE All-Share – Total Return -0.6
FTSE TechMARK All Share -0.6
FTSE AIM 100 -1.2
FTSE 100 Index – Total Return -1.3
FTSE All-Share -1.5
FTSE 350 -1.6
FTSE4Good UK -1.8
FTSE 100 -2.2
FTSE4Good UK 50 -2.8

 

 

 

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