FTSE 100 still unpopular

Ciprico

There are many posts on here saying how bad the FTSE 100 is....
Is that still the view, the big oil companies no longer dominate, I've seen "big pharma" refered to negatively on here (why!), likewise miners, we're going to need stuff out of the ground for the indefinite future. Unilver, Diageo, Reckitt make products the whole World loves...
OK - its a bit low on tech, but that part of the US market could well be over inflated...
I was considering City of London, but, on reflection why avoid oil - probably more upside than downside for oil.
Would buying a vanilla ftse100 tracker be considered contrarian these days...?

eskbanker

What's the context, i.e. what else are you invested in?

Alexland

123mat123 said:

Would buying a vanilla ftse100 tracker be considered contrarian these days...?

Going passive but overweight on any country greater than it's global market capitalisation might be considered contrarian. We hold about 5% UK and that's OK no particular bother. I wouldn't actively seek ex-UK investments to avoid it and I wouldn't invest to create a bias towards it either. It's just part of the eco system of global investment opportunities offering an attractive income, good P/E but likely lower growth prospects. All part of the diversified mix.

AnotherJoe

The trouble with the FTSE100 is that essentially its a random selection of about 20 mid sized companies (since the top 20 make up 50% of the value). Until very recently it was also a very poor random selection. Maybe its different right now since the oil crash, but in any case, why would you want to make a random selection of companies to invest in?

Oh, and as for oil, its got a long way to fall yet.

Albermarle

There are many posts on here saying how bad the FTSE 100 is...

Away from the micro climate of this forum , there are huge amounts of pensions funds still heavily invested in the FTSE 100/FTSE250/FTSE all share . Most workplace pension default funds and most mainstream pension funds with the likes of Standard Life, Scottish widows etc plus a lot of model portfolios  all tend to have a big UK %, often as high as 40% .

I am not saying what is right and wrong , but for sure in recent times the more global funds have done better , which may or may not continue .Personally I hedge my bets a bit and have more than 5% but not as high as 40% for sure .

csgohan4

I think having a some exposure to the UK market as part of a diversified portfolio would be reasonable, how much of your portfolio is dependent on your own risk appetite

MaxiRobriguez

I quite like elements of the FTSE and of the three quoted in the OP's post, I already own shares in two and have the remaining one on a watchlist. Not keen on a FTSE100 tracker though, to me it feels like the tracker weighs down on both growth and dividend prospects compared to a relatively simple 6-8 single stocks DIY combination.

Depends if you can do that in your vehicle of choice though. That's not something I can do in my pension as I'm limited to funds, so I do own a FTSE100 tracker there in the interests of diversification and trying to map somewhat to global GDP. If I had more of a choice though it would be the first asset out. 

AnotherJoe

Albermarle said:

There are many posts on here saying how bad the FTSE 100 is...

Away from the micro climate of this forum , there are huge amounts of pensions funds still heavily invested in the FTSE 100/FTSE250/FTSE all share . Most workplace pension default funds and most mainstream pension funds with the likes of Standard Life, Scottish widows etc plus a lot of model portfolios  all tend to have a big UK %, often as high as 40% .

I am not saying what is right and wrong , but for sure in recent times the more global funds have done better , which may or may not continue .Personally I hedge my bets a bit and have more than 5% but not as high as 40% for sure .

I think thats purely on a CYA basis "eg "well we chose the UK stock marketwhich is UK biggest companies so you cant blame us for its crap performance"

AnotherJoe

csgohan4 said:

I think having some exposure to the UK market as part of a diversified portfolio would be reasonable, how much of your portfolio is dependent on your own risk appetite

But there's an assumption in your statement that being invested in the FTSExxx means you have significant exposure to the UK market - if by market you mean economy.

If you actually mean market, eg stock market, well then we are back to my view its just a  random selection of a couple handfuls of companies..

dunstonh

Would buying a vanilla ftse100 tracker be considered contrarian these days...?

Buying any single sector fund in isolation would be considered bad.      

Buying any single sector fund in a niche area would be even worse.   

It may seem strange to some to refer to the FTSE100 as niche but that is exactly what it is as at focuses solely on UK Large cap and disregards small and mid cap.         If you wanted to focus on UK equity then the FTSE all share would be the tracker to use.  If you wanted to invest in the stronger, but more volatile,areas of the UK then you would go small and/or mid cap.

As part of a diversified portfolio, you should have UK exposure.  But it should be a balanced exposure. Not focused on one bit of it.

TBC15

The poor returns are what puts me off a FTSE 100 tracker.