FTSE Russell recently announced the indicative changes to its FTSE 100 and FTSE 250 indices, which could come into effect in its upcoming quarterly reshuffle. These potential changes have been compiled based on data as of Friday 24 May.
However, the final changes are expected to be announced on Wednesday 5 June, based on the official review using data as of market close on Tuesday 4 June.
Reshuffles usually take place in March, June, September and December, when the index provider reviews components’ market capitalisation figures. Based on this, FTSE 100 companies which have seen their market caps slide too far, risk being bumped down to the FTSE 250 index.
As of now, for the next quarter, UK online grocer Ocado is expected to fall off the FTSE 100 index, as well as financial advisor St. James's Place. On the other hand, software company Darktrace could come back on the FTSE 100, as well as the house builder Vistry Group.
Ocado likely to fall off the FTSE 100 index, Darktrace may be restored
Dan Coatsworth, investment analyst at AJ Bell said in an email note, “Ocado is no stranger to going in and out of the FTSE 100 and once again it looks set to move down a floor to the mid-cap FTSE 250 index. One of the most Marmite names on the UK stock market, investors either love or hate the quasi grocery/technology group and some even change their mind on a daily or weekly basis.
“One of the indicative changes to the FTSE indices could be short-lived. Darktrace looks set to join the FTSE 100, but it is in the process of being acquired by US private equity group Thoma Bravo, so could disappear from the top tier fairly soon.
“Despite the housing market coughing and spluttering more than a person with a nasty cold, housebuilder Vistry looks poised to nab a spot in the FTSE 100. Trading has been good for the company, having guided a fortnight ago for half year and full year profit to be ahead of last year.
“Investors like what they’re hearing and the shares have steadily ticked up since last October with a 38% total return year-to-date. That makes Vistry the best performing housebuilder in the mid cap index and the 21st best performing FTSE 350 stock so far in 2024.”
Coming to the FTSE 250 index, Alpha Group International, Brunner Investment Trust, Liontrust Asset Management and XPS Pensions Group are likely to be added, along with Ocado Group and St. James's Place.
Regarding Liontrust, Coatsworth said, “Liontrust used to be a staple of the FTSE 250, but briefly disappeared after a run of bad luck for the share price, when interest rates started to go up, a big acquisition didn’t work out, and it suffered widespread outflows from various funds.
“The asset manager has enjoyed enough of a recovery in its share price this year to put the stock in line for promotion back into the FTSE 250 index.”
However, Darktrace, Ferrexpo, Mobico Group, NextEnergy Solar Fund, Octopus Renewables Infrastructure Trust and Vistry Group are likely to move out of the FTSE 250 index.
