The table below lists the CAPE Ratio and P/E (TTM) for the FTSE 100 and FTSE 250 indices. The current Shiller PE of FTSE 100 is 14.07 (10/31/2016), considerable lower than the corresponding ratio of FSE 250. The trailing twelve months P/E is currently as high as 36.28 (many of the largest index components posted terrible earnings for their latest fiscal year but the general consensus is that the drop in earnings is only temporary).
For full historical valuation data, check the expanded datasets provided by Siblis Research.
FTSE 100 / FTSE 250 - P/E & CAPE Ratio
|Date||FTSE 100 P/E (TTM)||FTSE 100 CAPE Ratio||FTSE 250 P/E (TTM)||FTSE 250 CAPE Ratio|
Purchase historical price-earnings & CAPE ratios, dividend yields and total returns of FTSE 100 and 250 indexes since 12/31/1998, including yield and total return of FTSE All-Share since 12/31/1987. Full refund guaranteed if you are not fully happy with the dataset for any reason.
For full historical data (components change history, share prices, total returns, outstanding shares, market caps & earnings) of all individual current & past FTSE 100 companies (including delisted corporations), check the FTSE 100 Researcher Dataset by Siblis Research.
Relationship between CAPE Ratio and stock market performance
The graph above allows you to compare the historical CAPE ratios and 3-year forward returns of the FTSE 100. The forward return means the future rate of return that an investor will attain during the period of the next three years. A negative correlation is visible but the relationship has not always been that clear. CAPE ratio has stayed low since 2012 but index performance has still been poor during the past two years. Shiller PE was 11.97 in the beginning of 2016 but has since risen close to 14.
UK’s stock market in 2016
In October 2016, FTSE 100 is nearing its all-time record value when the index is trading value close to the price of April 2015. The rise in share prices has been bumped by the stark decreased in the value of the sterling. British pound has been under a lot of pressure after investors have started to worry about the consequences of the potential fast exit from European Union. A so called “hard exit” is feared to have a big negative impact on both short- and long-term economic growth of the country. The pounds value in US dollars has reached a 31-year low. A weak currency might support UK’s exports but also has a big effect on the dollar value of British companies.
FTSE 100 index
FTSE 100 stock index is the most followed indicator for the London Stock Exchange. The combined market value of the companies part of the index is £1,777,667 million. (Sep 30th 2016). The largest components are HSBC Holdings, British American Tobacco, BP, Royal Dutch Shell and GlaxoSmithKline. Among the ICB sectors, Oil & Gas has the biggest weighting, followed by Personal & Household goods. Majority of the earnings of FTSE 100 companies come from abroad so the index is not often used as a benchmark for the economic mood in UK. Since 2006, FTSE 250 index that consists of mid-cap British companies has outperformed the large-cap index almost every tear.
Shiller PE ratio
The idea behind CAPE ratio is that one year yearnings are too volatile to be used to estimate the real value of a company. By looking at the average of the longer term earnings gives a more accurate view of a firm’s capacity to create value. The ratio has become an essential indicator for value investors estimating the overall valuation level of a certain market/index/country. But there has also been a lot of critique towards the usefulness of Shiller PE and doubts about its power to predict the markets.