The table below lists the historical dividend yields & annual total returns of FTSE 100, FTSE 250 & FTSE All-Share indices. The current dividend yield of the FTSE 100 is 4.35% (12/31/2019), which is higher than the historical average yield. The corresponding yield of All-Share index is 4.06%.
For the latest data, availableon a monthly level, check the Global Equity Valuations Researcher Dataset provided by Siblis Research.
For full historical valuation data of UK stock market since the year 1990, subscribe for the Global Equity Valuations Researcher Dataset by Siblis Research that provides current and historical P/E (TTM) ratios, forward P/E ratios, CAPE ratios, dividend yields, market cap to GNI ratios, sector breakdowns and long-term interest rates of the largest economies and stock markets in the world. Check a sample dataset from here.
Calculating Index Total Return
When total return for the index is calculated, also the dividends and other distributions paid by the companies part of the index need to be taken account. Only considering price movements will not give a fully complete picture of the index performance, especially when returns are calculated for a longer period.
Another important thing to consider when long-term performance is evaluated is whether dividends are assumed to be reinvested back to the index or taken in cash. If the distributions are always put back to the index, be sure to familiarize yourself with compounding.
The annual total return calculated by Siblis Research does not assume that the dividends received during the period of 12-months were reinvested but the effect during the period of one year is trivial.
The yield on the table above is the weighted average trailing twelve months dividend yield of the components part of FTSE All-Share index. The weight equals the weighting the company has in the index. Trailing twelve months yield (TTM) means the dividends received during the last 12 months divided by the current stock price.
The average dividend yield of FTSE All Share has been 3.42% between 1995 and 2015. At the beginning of 2016, the yield was slightly higher than the average.
FTSE All-Share consists of 642 components that capture 98% of the UK’s total stock market capitalization. The index is a better indicator for the overall economic performance of United Kingdom than FTSE-100 index that consists mainly of multinational companies who are generating most of their revenues outside of UK. In March 2016, the total value of the index was £1,992 billion.
London Stock Exchange (LSE)
London Stock Exchange is the largest stock market of Europe and the third largest in the world measured by the value of listed companies. The exchange is operated by the London Stock Exchange Group that also owns Borsa Italiana and global asset management firm Russel Investments. In March 2016, LSE and the Deutsche Börse announcement that they have reached an agreement to merge. If the merger will go through, the new exchange will become the second-largest stock market in the world measured by market value.