How the FTSE 100 has changed in 10 years: Banks and oil fall from grace, while tobacco and beverages make gains
The banking sector’s influence in the FTSE 100 has nearly halved in the last 10 years, a new study suggests.
Oil’s stake in the blue-chip index has also declined heavily since 2006, with tobacco and beverages experiencing the biggest growth.
The AJ Bell research looked at the composition of the FTSE 100 by market capitalistions, dividing the total into sectors.
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The firm found that in 2006, banking had a 20.8 per cent share of all FTSE 100 value. This year, its stake has shrunk to 11.1 per cent.
Oil, meanwhile, has seen its stake in the index fall from 19.3 per cent to 13 per cent.
Still, despite their falls, banking and oil remain the biggest sectors in the FTSE 100.
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The most improved sectors over the 10-year period are tobacco, whose share of total market capitalisations has grown from 2.7 per cent to 6.2 per cent, and beverages, which have increased from 2.9 per cent to 5.7 per cent.
| Change in FTSE 100 composition by market capitalisation | 2016 weighting | 2006 weighting | % change |
| TOBACCO | 6.2% | 2.7% | 3.5% |
| BEVERAGES | 5.7% | 2.9% | 2.8% |
| TRAVEL & LEISURE | 4.3% | 1.7% | 2.6% |
| SUPPORT SERVICES | 4.1% | 1.5% | 2.6% |
| HOUSEHOLD GOODS | 2.7% | 1% | 1.7% |
| PERSONAL GOODS | 2.7% | 1.1% | 1.6% |
| HOUSEBUILDING | 1.4% | 0.2% | 1.2% |
| LIFE INSURANCE | 4.9% | 3.8% | 1.1% |
| MEDIA | 4.0% | 3.1% | 0.9% |
| CONSTRUCTION | 1.0% | 0.3% | 0.7% |
| FINANCIAL SERVICES | 1.4% | 1% | 0.4% |
| UTILITIES | 4.8% | 4.5% | 0.3% |
| DEFENCE | 1.7% | 1.4% | 0.3% |
| PROPERTY | 1.5% | 1.5% | 0% |
| GENERAL RETAIL | 1.7% | 1.9% | -0.2% |
| PHARMA | 9.1% | 9.7% | -0.6% |
| FOOD RETAIL | 1.3% | 2.4% | -1.1% |
| MINING | 4.7% | 7.1% | -2.4% |
| OIL | 13.0% | 19.3% | -6.3% |
| BANKING | 11.1% | 20.8% | -9.7% |
"The most dramatic changes to the index tend to occur when a sector is hot or conversely is falling from grace," said Russ Mould, investment director at AJ Bell.
"These trends can lead to a rash of promotions or demotions, trends which can make or cost investors money if they are (or are not) spotted soon enough.
"The biggest slump over the past 10 years has been seen in the banking sector following the financial crisis of 2008 and a host of mis-selling scandals since."