A decade on since FTSE 100 hit bottom at 3,287
– FTSE 100 returns 93% over 10 years
– Technology sector is best performing returning 369%
Adrian Lowcock, Senior Investment Manager at Hargreaves Lansdown, looks at how investors have fared over the last 10 years.
In the last 10 years the FTSE 100 has risen 3,074 points or 93% since the low of March 2003, although it remains a little way off the high point of 6,732 reached on 15th June 2007. Whilst the market has risen over the last 10 years there have been some big winners and losers during that time. The Banking sector has been the worst performer over the last 10 years and the only sector to post a negative capital return with the FTSE All-share/banks returning -20%. The Technology sector posted the best performance with the FTSE All-share/Technology returning 369%, recovering from the lows seen in the years following the Dotcom bubble.
Performance of FTSE Sectors from 12 March 2003 to 28th February 2013
|
All Share Sector |
% Growth |
| FTSE All-Share/Banks CR |
-20.25 |
| FTSE All-Share/Financials CR |
22.81 |
| FTSE All-Share/Health Care CR |
78.02 |
| FTSE All-Share/Telecommunication CR |
100.11 |
| FTSE All-Share/Oil & Gas CR |
110.22 |
| FTSE All-Share/Consumer Services CR |
112.91 |
| FTSE All-Share/Utilities CR |
179.25 |
| FTSE All-Share/Basic Materials CR |
280.44 |
| FTSE All-Share/Consumer Goods CR |
346.31 |
| FTSE All-Share/Industrials CR |
360.45 |
| FTSE All-Share/Technology CR |
369.08 |
Adrian Lowcock says;-
“The technology sectors strong performance over the last 10 years highlights the contrarian nature of the stock market. However, it is difficult for any investor to go against the trend and take such risks. Instead investors should focus on their long term investment goals and invest whenever they can afford to do so.”
“It is time in the market not timing that counts. Even though the FTSE 100 remains below its all-time high (6,930 on 30th December), if you had been invested all that time, with dividends reinvested, you would have been up 44.73%. In addition picking the right funds can transform your portfolio and make the nominal value of an index meaningless.”
Recommendations
Schroder UK Alpha Plus – Richard Buxton takes a long term view and is able to spot some opportunities before others – a distinguishing feature of all great investors. Having the conviction to back them is equally important and Richard holds only 30-40 companies in his fund which means each idea has a significant effect on performance. You will never see his portfolio padded out with mediocre holdings just to make up the numbers. This fund has the potential to deliver superb returns, in a variety of economic conditions.
JO Hambro UK Equity Income – The managers believe the UK economy is performing better than most commentators expect. The fund continues to have a bias towards more economically-sensitive companies and has performed well recently as a result.