Graveyard index beats the FTSE 100

“The market is firmly in holiday mode with minimal corporate announcements and no movement from the FTSE 100 on Friday. Trading at 7,559, the blue chip index is going to have work harder if it is to stand a chance of returning to the 7,877 high seen in May. Risk appetite looks weak at present, so markets may remain in a small trading range until there are clear catalyst to lift investor confidence,” says Russ Mould, Investment Director at AJ Bell.

Graveyard index beats the FTSE 100

“An index often dubbed the graveyard of the UK stock market has surprised this year by delivering a better performance the FTSE 100 index which contains London’s largest listed companies.

“The FTSE Fledgling index has returned 2.1% year-to-date versus a 1.7% loss from the FTSE 100. It is made up of companies listed on London’s Main Market which are too small to qualify for the FTSE 100, FTSE 250 or FTSE Small Cap indices.

“It contains just over 100 companies, the biggest of which is BATM Advanced Communications which is valued at £164 million. BATM is the third best performer this year, up 58%. At the top is JKX Oil & Gas which has risen by 168% in value.

“Investors are unlikely to trade the Fledgling index as a whole as tracker funds tend to focus on either the FTSE 100 or 250, or a broad UK small cap universe. However, it can be a useful space to look for companies forgotten by the market to see if any have recovery potential.

“Some of the better known names in the Fledgling index include French Connection – up 40% in value this year – and airline Flybe, whose shares have risen by 30% so far in 2018.

“Stocks tend to sit in the Fledgling index if they’ve fallen out of the FTSE Small Cap index due to trading problems which have hurt their market valuation, or they are simply so small that they have little chance of being promoted to a better known index.”

These articles are for information purposes only and are not a personal recommendation or advice