For a while now, the FTSE 100 has been seen as a bit of a flop. For those who have been invested in the index for most of this century, this may come as a surprise. In the 20 years to December 2021 – a span in which the UK equity market saw both routs and sustained moments in the sun – the index’s annual total return averaged 5.6 per cent. Compared with the compounding returns of other wealth-building tools, this was hardly a disaster.
But when seen beside the deepest and most followed equity market on earth, it was less impressive. One of the biggest failings of the UK’s listed blue-chips is that they aren’t America’s listed blue-chips, which posted average annual returns of 9.5 per cent over the same two-decade stretch.
And then, for a short moment – call it ‘2022’ – the UK large-cap index seemed to claw back some respect.