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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FTSE 250 index reviews

Every quarter the FTSE set of indices (incl. FTSE 100 and FTSE 250 indices) are reviewed and the component stocks changed if required.

Elsewhere we have looked at the impact on the share prices of companies entering or leaving the FTSE 100 Index, here we look at the FTSE 250 Index.

Companies leaving the FTSE 250 Index

The charts below show the share price behaviour of nine companies that left the FTSE 250 Index (relegated to the FTSE Small Cap Index, not promoted to the FTSE 100 Index). The time period for each chart is 30 trading days, starting from 15 days before the index review announcement. The vertical line in each chart indicates the announcement day of the company leaving the index (this is the date under the company name).

FTSE 250 index reviews – companies leaving the index

It can be seen that, in most cases, the share price falls (quite sharply in some cases) in the few days immediately before the index review announcement, then rises in the few days following the announcement, and then falls again five or six days after the announcement.

Companies joining the FTSE 250 Index

The charts below show the share price behaviour of nine companies that joined the FTSE 250 Index (promoted from the FTSE Small Cap Index, not relegated from the FTSE 100 Index). As above, the time period for each chart is 30 trading days, starting from 15 days before the index review announcement. The vertical line in each chart indicates the announcement day of the company joining the index (this is the date under the company name).

FTSE 250 index reviews – companies joining the index

It can be seen that, in most cases, the share price rises in the six to ten days before the announcement; following which the price either trades flat or falls back.


Extract taken from The UK Stock Market Almanac 2015.

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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 2Q performance – international markets

Equity and commodity markets

The following chart shows the returns on a range of international stock markets and commodities in the second quarter of 2015.

2015 2Q International market returns

NOTES

  1. The Euro markets, Germany, Italy, France and Netherlands, after a strong first quarter all saw negative returns in the second quarter.
  2. Apart from India, a strong quarter for the BRICs.
  3. A weak quarter for metals.
  4. Despite falling back steadily in May and June, the strongest performer here was Brent Oil on the back of a very strong April.

Currency markets

The following chart shows a sample of currency moves against the British pound in 2Q 2015. For example, the British pound strengthened 5.8% against the US Dollar, and 1.0% against the Russian Ruble.

2015 2Q Pound sterling performance

As can be seen, in the last quarter sterling strengthened against all currencies in this sample.

Equity and commodity markets (sterling)

The following chart shows the returns on the same markets as in the first chart, but this time in sterling terms (i.e. showing the currency-adjusted returns for a UK investor).

2015 2Q International market returns (GBP)

NOTES

  1. Over the second quarter UK investors saw their returns on international markets pared back due to the strength of sterling. (In fact, of the 22 sample markets here, UK investors would have seen positive returns in only four.)

Equity and commodity markets (dollar)

The following chart shows the returns on the same markets as in the first chart, but this time in US dollar terms (i.e. showing the currency-adjusted returns for a US investor).

2015 2Q International market returns (USD)

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2015 1Q market review – international markets

Equity and commodity markets

The following chart shows the returns on a range of international stock markets and commodities in the first quarter of 2015.

2015 1Q International market returns

Notes

  1. The Euro markets, Germany, Italy, France and Netherlands, dominate the top of the performance chart this last quater.
  2. At the bottom are the commodities (gold, oill and platinum), and US stocks.

Currency markets

The following chart shows a sample of currency moves against the British pound in 2015 1Q. For example, the British pound strengthened 14.5% against the Brazilean Real, and fell 8.8% against the Russian Ruble.

2015 1Q Pound sterling performance b

Equity and commodity markets (sterling)

The following chart shows the returns on the same markets as in the first chart, but this time in sterling terms (i.e. showing the currency-adjusted returns for a UK investor). The order of the markets has been kept the same as in the first chart, to highlight the effect of the currency moves.

2015 1Q International market returns (GBP)

Notes

  1. Over the first quarter sterling strengthened against the Euro (thus diminishing the effective returns from Euro markets), and weakened against the US dollar.
  2. A major positive impact for UK investors was the weakness of sterling against the ruble which boosted returns on Russian equity exposure.
  3. Conversely, the weakness of the Brazilian Real  acted to reduce returns on Brazil equities.
  4. While oil fell 4.0% in dollar terms in the quarter, UK investors saw a small positive return of 0.8%.

Equity and commodity markets (dollar)

The following chart shows the returns on the same markets as in the first chart, but this time in US dollar terms (i.e. showing the currency-adjusted returns for a US investor).

2015 1Q International market returns (USD)

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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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FTSE 250 Index month end values 1986-2014

The following table shows the month-end and year-end values of the FTSE 250 Index.

NB. The FTSE 250 Index was launched on 12 October 1992, but the base date for the index was 31 December 1985.

 

 


See also

Other articles about the FTSE 250 Index.

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FTSE 100/FTSE 250 monthly switching strategy

A previous article looked at a comparison of the monthly performance the FTSE 100 v FTSE 250 indices. In this article we will look at taking the results of that study to create a trading strategy.

Analysis of the historic data shows that although the FTSE 250 Index has greatly out-performed the FTSE 100 Index in the long-term (since 1986 the FTSE 100 has increased 367% compared to an increase of 1052% for the FTSE 250) there are certain months for which the large-cap index on average out-performs the mid-cap index. We will look at a strategy that exploits this feature.

The following reproduces the chart showing the monthly out-performance of the FTSE 100 over the FTSE 250 Indices. For example, in Januaries since 1986 the FTSE 100 has on average out-performed the FTSE 250 by -1.5 percentage points.

Monthly average out-performance of FTSE 100 over FTSE 250 [1986-2014]As can be seen, there are only two months, September and October, in which the FTSE 100 convincingly out-performs the FTSE 250.

The above results suggest a strategy of investing in the FTSE 250 for the year but switching into the FTSE 100 for just the two-month period September-October. In other words, the portfolio would be invested in the FTSE 250 from January to August, at the end of August it switches out of the FTSE 250 and into the FTSE 100 for two months, then back into the FTSE 250 until the end of August the following year.

The following chart shows the result of operating such a strategy from 2000. For comparison, the chart also includes the portfolio returns from continuous investments in the base FTSE 100 and FTSE 250.

FTSE100-FTSE 250 monthly switching strategy [2000-2014]

The result: the FTSE 100 portfolio would have grown -5%, the FTSE 250 risen +153%, and the FTSE 100/FTSE 250 monthly switching portfolio would have increased +237%. These figures do not include transaction costs, but these would not be significant as the strategy only requires trading twice a year.


See also

 

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Comparison of monthly performance FTSE 100 v FTSE 250

Recently we have looked at the monthly seasonalities of the FTSE 100 and FTSE 250 Indices. Here, we will look at the comparative monthly performance of the FTSE 100 Index against the FTSE 250 Index.

The following table shows the out-performance of the FTSE 100 over the FTSE 250 for every month since 1986 (the year of introduction of the latter index). For example, in January 1986 the FTSE 100 month return was 1.6%, that for the FTSE 250 was 2.6%, and so the out-performance of the FTSE 100 over the FTSE 250 was -1.0 percentage points. Negative values (i.e. those months when the FTSE 250 out-performed the FTSE 100)  are highlighted with a blue cell background.

Monthly out-performance of FTSE 100 over FTSE 250 [1986-2014]As can be quite clearly seen the FTSE 250 has been strong relative to the FTSE 100 for the three months January to March.

This can also be seen in the chart below which shows the average FTSE 100 out-performance of the FTSE 250 for each of the 12 months since 1986. For example, on average in January the FTSE 100 has under-performed the FTSE 250 Index by 1.5 percentage points.

Monthly average out-performance of FTSE 100 over FTSE 250 [1986-2014]This average comparative chart shows that the FTSE 250 has been significantly strong relative to the FTSE 100 Index January-March, and relatively weak September-October.


See also

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FTSE 250 Index monthly seasonality

The following table shows the month returns for the FTSE 250 Index for every month since the index was introduced in 1986. For example, in January 1987 the FTSE 250 Index rose 9.5%. Negative month returns have been highlighted with a blue cell background.

FTSE 250 Index month returns [1986-2014]A quick glance at the above chart suggests that strong months for the FTSE 250 Index have been February, April and December; while weak months have been June and September.

These observations are supported by the chart below which shows the average month returns for each month 1986-2014.

FTSE 250 Index average month returns [1986-2014]From this chart we can see the FTSE 250 Index has historically been strong the five consecutive months December-April. Its weakest month is September (an average month return of -1.7%), and its strongest month December (+2.8%).


See also

Further articles on the FTSE 250 Index.

 

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