Is the Make Up of the FTSE 100 Changing Faster Now?

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There’s a famous piece of research from the US that suggests the rate of change of their Standard and Poor 500 index is increasing. You can read more about if here: http://www.technologyreview.com/view/519226/technology-is-wiping-out-companies-faster-than-ever/

I wondered if the same held true for the UK’s FTSE 100, so I plugged some data into Excel to take a look.

WARNING: this is rough and ready stuff. A quant I am not and there are some natural issues with this data – for example, I can only include those companies that have joined AND left in the period since 1984 for which I could find data. This naturally biases against the latest joiners since the ones that are going to stick around the longest are still there and hence are not included in the chart.

Still though, it looks to me like there’s the basis of a trend here – certainly grounds to do some more research.

This post forms part of my Vectors series. For more posts on this subject, visit the Vectors page.

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Tom Cheesewright