FTSE 100 index and FTSE All World index

AskAsk

The FTSE 100 index is all over the place over the last 5 years and there is no growth pattern in the graph.  The FTSE All World index grows over the last 5 years.  Is the latter a growth index, so that it grows over time, whereas the FTSE100 isn't as it doesn't seem to have grown much over time?

I have invested in HL ISF and VWRL funds, which track the FTSE100 and the FTSE All World index.  Hence the above question.

Linton

The FTSE All World Index contains approx 60% USA with all the tech giants.  So it has been a growth index.  The FTSE100 invests entirely in companies that are listed on the London Stock Exchange.  These are mainly global rather than entuirely UK but  very few tech companies choose to list here.  Many are miners, oil, insurance etc etc with possibly more solid balance sheets but much lower perceived growth prospects.

Over the very long time (decades) you would expect returns to even out but since the 2008 crash until the last few months growth has predominated.

Albermarle

 FTSE is just an organisation that reports/monitors different indexes around the world.
The fact that  on the UK news they often talk about the FTSE 100 , can lead to the impression that FTSE is only directly linked with the UK stock market, which is not the case.

Sebo027

Linton said:

Over the very long time (decades) you would expect returns to even out but since the 2008 crash until the last few months growth has predominated.

Really? The FTSE100 has plateaued since the late 90s.

eskbanker

Sebo027 said:

Linton said:

Over the very long time (decades) you would expect returns to even out but since the 2008 crash until the last few months growth has predominated.

Really? The FTSE100 has plateaued since the late 90s.

Not on a total returns basis, i.e. with dividends reinvested....

george4064

Remember that ISF is a distributing ETF, a lot of the return for the FTSE 100 is generated from dividends. So a more accurate idea of the overall return of an ETF is to look at the total return (I.e. with dividends accumulated or re-invested).

Same games for the FTSE All-Word ETF (if you have the distributing class), but as mentioned above the difference (between accumulation and distributing) is far greater for a basket of stocks like the FTSE 100.

Prism

Sebo027 said:

Linton said:

Over the very long time (decades) you would expect returns to even out but since the 2008 crash until the last few months growth has predominated.

Really? The FTSE100 has plateaued since the late 90s.

Since the late 90s, lets say around 1997 after a big jump for the FTSE 100, it has kept pretty much in line with the world index. Sometimes behind like during the dot.com bubble and sometimes ahead such as during the run up to 2008. That changed most recently mid 2014 when US growth started to really take off and the brexit referendum reduced investor confidence in the UK stock market. It seems to be swinging back to the UK again now.