Why UK blue-chip decline is set to continue

market structure

Growth industries such as telecoms, information technology, pharmaceuticals and media now make up around 50% of the FTSE Small Cap index compared with 25% a decade ago

The last year has been outstanding for smaller company returns. ABN Amro, custodians of the Hoare Govett, confirmed to me recently that in the year to 1 April 2004, its Smaller Companies index was actually up 60% on a capital return basis. This is at least 40% more than returns for the FTSE 100. I then checked the five-year record. While it was less impressive, at around 40%, it is still good, given that we have had a bear market for three out of the past five years. Blue chip investors are seriously out of pocket over the same period. This is a far cry from the 1990s when smaller compani...