Index performance

Ovet the last decade, the FT100 returned -4.1%, or about -0.4% pa, having moved from 6256 to 5997. If, instead of investing all your money at the start of the period, you invested equal amounts in the Footsie in yearly intervals, your return would have been 12.9%, equivalent of 1.2% pa. Here is the data I used for the Footsie, taken from Google:

1  Feb 02 2001  6256
2  Jan 04 2002  5323
3  Jan 10 2003  3974
4  Jan 02 2004  4510
5  Jan 14 2005  4820
6  Jan 06 2006  5731
7  Jan 05 2007  6220
8  Jan 11 2008  6206
9  Jan 02 2009  4561
10 Jan 08 2010  5534
11 Feb 04 2011  5997

I assume that you invested equal amounts at time points 1 to 10 inclusive.

The Motley Fool has an interesting article yesterday, The FTSE 250's Big Comebacks , which showed that  the FT250 returned 79.3% during the period 1999-2010, against -14.9% for the FT100. Curious.The article posits a few theories as to why this was so

• the UK credit-fueled boom was relatively beneficial to FT250 members, which are domestic focussed; as opposed to the FT100, which is more UK-focussed
• the FT250 contains more growth companies
• it is easier to liquidate FT100 companies during crises.

I posited my own theory: that the FT250 experienced a rerating on PEs relative to the FT100. This is purely a guess, though, as I don't have access to any relevant statistics.

I turned up some interesting info from Digital Look:
                        FT250 FT100
Div Yield 2.9%  2.7%
Div Cover 2.57  3.54
Op Mrgn  30.4%  27.2%
ROCE     34.2%  34.2%
PE       39.93  34.12

Some of those figures look dubious, though. I don't think the PEs are right, for starters.