The FTSE 100 At Thirty: Then and Now

The FTSE 100 turns thirty this year. With a base level of 1000, it was launched in January 1984 as a broader measure of the corporate British economy.

The chart below shows the performance of the index over the past 30 years:

Click to enlarge

FTSE100_thirty_years

Source: FTSE 100 turns thirty, Fidelity UK

On Friday the FTSE 100 closed at 6,829.30.

A few points of interest from the Fidelity article are listed below:

  • In the first 17 years of its existence the FTSE had strong returns. But this could not be repeated in the next 13 years.
  • The Footsie came just in time to capture the investing mood of a generation when wide-scale privatization of state industries led millions of Britons to own shares in the years that followed.
  • By some measures the index does not represent the broad British economy. For example, Persimmon is the only UK home builder in the index whereas the next seven large builders are in the FTSE 250 index.
  • The FTSE also suffers from “survivor bias” since failing companies are routinely booted out and replaced by successful firms.
  • The original constituents of the FTSE 100 reflected Britain as a manufacturing powerhouse with long-established names such as BICC (electrical cables) Courtaulds (textiles) and TI Group (steel tubing) among them.
  • Some of the original constituents such as BP (BP), Marks & Spencer(MAKSY) and Unilever(UL) are still in the index today.

The table below shows the original members of the FTSE 100 in 1984 and what happened to them:

S.No.Original MemberWhat happened to it
1Allied-LyonsAcquired
2Associated British Foods (LSE: ABF)
3Associated DairiesAcquired
4British American Tobacco (LSE: BATS)
5BICCBalfour Beatty
6BOCAcquired
7BPB IndustriesAcquired
8BTRNow called Invensys (LSE: ISYS)
9Barclays (LSE: BARC)
10Barratt DevelopmentsNow in the FTSE 250
11BassBroken up
12BeechamAcquired
13Berisford (S&W)Acquired
14Blue Circle IndustriesAcquired
15BootsAcquired
16British AerospaceNow called BAE Systems (LSE: BA)
17British & Commonwealth ShippingBankrupt
18British Electric TractionAcquired
19British Home StoresAcquired
20BP (LSE: BP)
21BritoilAcquired
22BowaterNow called Rexam (LSE: REX)
23BurtonAcquired
24Cable & Wireless (LSE: CW)
25Cadbury SchweppesNow just Cadbury (LSE: CBRY)
26Charterhouse J. RothschildBroken up
27Commercial Union AssuranceNow called Aviva (LSE: AV)
28Consolidated Gold FieldAcquired
29CourtauldsAcquired
30DalgetyBroken up
31DistillersAcquired
32Edinburgh Investment TrustNow in the FTSE 250
33English China ClaysAcquired
34Exco InternationalAcquired
35FerrantiBankrupt
36FisonsAcquired
37General Accident Fire & LifeAcquired
38General ElectricAcquired
39GlaxoNow called GlaxoSmithKline (LSE: GSK)
40Globe Investment TrustAcquired
41Grand MetropolitanMerged with Guinness, now called Diageo (LSE: DGE)
42GUSBroken up
43Guardian Royal ExchangeAcquired
44Guest, Keen & NettlefoldsNow just GKN (LSE: GKN) and in the FTSE 250
45Hambro Life AssuranceAcquired
46Hammerson (LSE: HMSO)
47Hanson TrustAcquired
48Harrisons & CrosfieldElementis/FTSE Small Cap
49Hawker SiddeleyAcquired
50House of FraserAcquired
51ICIAcquired, but demerged AstraZeneca (LSE: AZN) in 1993.
52Imperial Continental GasBroken up
53ImperialNow Imperial Tobacco (LSE: IMT)
54Johnson Matthey (LSE: JMAT)
55LadbrokesNow in the FTSE 250
56Land Securities (LSE: LAND)
57Legal & General (LSE: LGEN)
58Lloyds BankNow Lloyds Banking Group (LSE: LLOY)
59MEPCAcquired
60MFI FurnitureBankrupt
61Magnet & SouthernsAcquired
62Marks & Spencer (LSE: MKS)
63Midland BankAcquired
64National Westminster BankAcquired
65Northern FoodsNow in the FTSE 250
66Pearson (S) & SonNow called Pearson (LSE: PSON)
67Peninsular & Oriental SteamAcquired
68Pilkington BrothersAcquired
69PlesseyAcquired
70Prudential AssuranceNow just Prudential (LSE: PRU)
71RMCAcquired
72Racal ElectronicsAcquired, although demerged Vodafone (LSE: VOD) in 1988.
73Rank OrganisationAcquired
74Reckitt & ColmanNow called Reckitt Benckiser (LSE: RB)
75RedlandAcquired
76Reed InternationalNow called Reed Elsevier (LSE: REL)
77Rio Tinto-ZincNow called Rio Tinto Group (LSE: RIO)
78Rowntree-MackintoshAcquired
79Royal Bank of Scotland (LSE: RBS)
80Royal InsuranceNow called RSA (LSE: RSA)
81J Sainsbury (LSE: SBRY)
82Scottish & Newcastle BreweriesAcquired
83SearsBroken up
84SedgwickAcquired
85Shell Transport & TradingNow called Royal Dutch Shell (LSE: RSDB)
86Smith & Nephew (LSE: SN)
87Standard Chartered (LSE: STAN)
88Standard Telephone & CableAcquired
89Sun Alliance & London InsuranceAcquired
90Sun Life Assurance SocietyAcquired
91TarmacAcquired
92Tesco (LSE: TSCO)
93Thorn EMIAcquired
94Trafalgar HouseAcquired
95Trusthouse ForteAcquired
96UltramarAcquired
97Unilever (LSE: ULVR)
98United BiscuitsAcquired
99Whitbread (LSE: WTB)
100George WimpeyNow called Taylor Wimpey (LSE: TW) and in the FTSE 250

 

Data Source: Motely Fool, UK

The history of the FTSE 100 constituent changes over the years can be found here.

Unlike the original FTSE, the current version is composed of fewer manufacturing firms.The FTSE 100 currently is dominated by banking, mining and energy firms.Today it is a market-capitalisation weighted index of UK-listed blue chip companies measuring the performance of the 100 largest companies traded on the London Stock Exchange that pass screening for size and liquidity.

The dividend yield of the index stood 3.46% at the end of 2013 (in local currency terms) and the top 10 constituents accounted for about 43% of the index market capitalization.

The Top Five Constituents of the Index are listed below with their current dividend yields:

1.Company: HSBC Holdings (HBC)
Current Dividend Yield: 4.31%
Sector: Banking

2.Company:Vodafone Group (VOD)
Current Dividend Yield: 4.05%
Sector: Telecom

3.Company: BP Plc (BP)
Current Dividend Yield: 4.54%
Sector:Oil & Gas Producers

4.Company: Royal Dutch Shell A (RDS-A)
Current Dividend Yield: 4.29%
Sector:Oil & Gas Producers

5.Company: GlaxoSmithKline (GSK)
Current Dividend Yield: 4.38%
Sector:Pharmaceuticals & Biotechnology

The full list of FTSE 100 can be found here.

Note: Dividend yields noted above are as of Jan 17, 2014. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.

Source: FTSE

The iShares MSCI United Kingdom ETF (EWU) which tracks the MSCI United Kingdom Index gives exposure to some of the large British firms. It has a 12-month yield of 2.40%.

Disclosure: No Positions

Update:

The changing face of the FTSE 100, CityWire UK

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