FTSE 100 still unpopular

[Deleted User]

Aapl investors have been advised to sell since the day they invested. 
Their advisers will be right one day, and proclaim themselves sun-kings. 

BananaRepublic

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 .

And a lot of pension funds are crap performers. I’m sure they use shiny suited sales weasels to market their group pensions to companies. I had one many years ago, dreadful. And once you leave your employer, you start paying lots of commission. An awful lot of  people don’t look at their pensions in detail until they are a long way down the line. 

As said earlier by others the FTSE 250/350 are okay. 

Thrugelmir

ZingPowZing said:

So, all in all, neither good nor bad and not a spur to buy nor sell?

I'm neutral on individual S&P 500 shares. Not companies that I follow or trade in per se. 

Returning to the original point of the thread and the the concerns expressed at how just 10 companies dominate the FTSE index. The same can be said of S&P 500.  Remembering that unlike the FTSE the S&P is based on free float not the issued share capital. At the 30th September 2019 the 34 largest companies in the S&P accounted for 43.9% of the index. Their combined market value exceeded that of the bottom 438.  

Markets have never been more polarised. 

DireEmblem

AnotherJoe said:

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.

Maybe the UK needs some new indices, and tracker funds to follow, how about:

1) UK Clean Energy

2) Technology

3) Finance

4) Transport

Now, what stocks should be in these indices?

Sailtheworld

The problem with the FTSE is not the companies but that it's a trap for the those who think holding the top 100 companies listed offers diversification. Might have been the case 35 years ago but not any more. Those same people who think it offers diversification probably think it offers exposure to the UK economy too.

It's probably an index that has had its time - it's just a list.

dunstonh

Sailtheworld said:

The problem with the FTSE is not the companies but that it's a trap for the those who think holding the top 100 companies listed offers diversification. Might have been the case 35 years ago but not any more. Those same people who think it offers diversification probably think it offers exposure to the UK economy too.

It's probably an index that has had its time - it's just a list.

The FTSE100 can be characterised as a remnant of the Industrial revolution.   Financials and Fossil Fuels.  Very 19th and 20th Century.   Unless the UK can come bring some more modern industries to a global scale, the FTSE100 will remain an index of yesteryear.

Another_Saver

I'm at the point now that I just want to refer people to my earlier posts on UK equity rather than repeat myself every time...
I still expect, whether you measure from 31/12/19-31/12/29, or from March, or from now, that over the next decade or so the UK will outperform the global market. The forum has been around longer than that so hopefully will still around then for me to gloat. Sooner or later sentiment will drift the other way, the US will have a period of relative undervaluation, sensible value investors will buy in while the (EM?, Eastern Europe, Asia Pacific, Africa?, UK?) Hype train pockets money from the growth investors.

itwasntme001

Another_Saver said:

I'm at the point now that I just want to refer people to my earlier posts on UK equity rather than repeat myself every time...
I still expect, whether you measure from 31/12/19-31/12/29, or from March, or from now, that over the next decade or so the UK will outperform the global market. The forum has been around longer than that so hopefully will still around then for me to gloat. Sooner or later sentiment will drift the other way, the US will have a period of relative undervaluation, sensible value investors will buy in while the (EM?, Eastern Europe, Asia Pacific, Africa?, UK?) Hype train pockets money from the growth investors.

Yeh I would agree with this.  It is why I am preferring VLS100 as opposed to global all cap for my core holding.  It is worth keeping in mind that the FTSE100 does not have to do spectacularly well to still out-perform the S&P500 or Nasdaq.

When the economic regime changes to one of higher inflation/rates (or at least future expectations of), that is when the "old" economy stocks can be much more favourable vs the "new" economy tech/growth style.

MaxiRobriguez

Another_Saver said:

I'm at the point now that I just want to refer people to my earlier posts on UK equity rather than repeat myself every time...
I still expect, whether you measure from 31/12/19-31/12/29, or from March, or from now, that over the next decade or so the UK will outperform the global market. The forum has been around longer than that so hopefully will still around then for me to gloat. Sooner or later sentiment will drift the other way, the US will have a period of relative undervaluation, sensible value investors will buy in while the (EM?, Eastern Europe, Asia Pacific, Africa?, UK?) Hype train pockets money from the growth investors.

Not just a hype thing, may occur due to changes in global economics. A return of inflation and interest rises may make pop growth stocks and rotate money into profitable, yielding stocks who can rise their prices with said inflation without losing custom, and the bank stocks hit hard over the past 10 years would suddenly have a growth story on.

The more the growth vs value tug gets stretched, the more likely is that any sort of rotation will occur in the near future. I'm happy to be a buyer of cheap UK stocks at the moment.

dunstonh

Another_Saver said:

I'm at the point now that I just want to refer people to my earlier posts on UK equity rather than repeat myself every time...
I still expect, whether you measure from 31/12/19-31/12/29, or from March, or from now, that over the next decade or so the UK will outperform the global market. The forum has been around longer than that so hopefully will still around then for me to gloat. Sooner or later sentiment will drift the other way, the US will have a period of relative undervaluation, sensible value investors will buy in while the (EM?, Eastern Europe, Asia Pacific, Africa?, UK?) Hype train pockets money from the growth investors.

Every sector/region/country has good years and bad years.    Yes, at some point, UK equity will be the best area for a year.  However, UK equity and UK large cap are two different things as far as measures go.    Between 2009 and 2019, UK equity was top third 8 times on a discrete annual basis.     And over a 10 years period cumulatively, it was second to US. (248.01% US, 129.63% UK, 128.4% Asia/Japan, 115% Europe, 107.2% Index Linked Gilts... skipping some to worst equity sector which was emerging markets at 67.76%).  - source Financial Express.
Diversification is key.   The FTSE100 is niche and focused and not representative of the UK economy.   It is important not to use the term FTSE100 and UK equity to suggest they are the same thing. FTSE all share would be a fairer match.