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Will the FTSE 100 continue to outstrip rival indices?

Amidst all the gloom on the economic front – to say nothing of the political blood-letting underway – at least the UK benchmark is showing a little resilience, albeit in relative terms. The FTSE 100 may have contracted by around 4.8 per cent in the year-to-date but that compares favourably with a host of overseas indices. France’s CAC 40 index has lost 18.6 per cent of its value, while Germany’s DAX 40, home to major manufacturing stocks such as BMW (DE:BMW), Mercedes-Benz (DE:MGB) and Siemens (DE:SIE), has pulled back by 21.5 per cent.

Even the once seemingly unassailable Nasdaq Composite index has given up 28.5 per cent of its value since the end of 2021, although index gains still amount to 84.1 per cent over the past five years. Over that same period, the tech-focused US index has delivered a total return of 204 per cent assuming the reinvestment of all cash distributions from index constituents. Investors haven’t exactly been careering for the exits where growth stocks are concerned, but the value mantra is certainly in the ascendancy. The so-called ‘rotation’ out of growth stocks has also served to highlight the top-heavy nature of the index, dominated as it is by half-a-dozen tech heavyweights that are familiar to us all.

 

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