FTSE tech index strongly outperforms FTSE 100 over last 12 months

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  • Online gambling, biotech shares see FTSE techMARK 100 rise by 7%
  • Performance of US tech index even greater – risen by 40% in a year

The London Stock Exchange’s technology index, the FTSE techMARK 100, has strongly outperformed the FTSE100 over the last 12 months, rising by 7% whilst the FTSE 100 has fallen 12%, shows new research from Bowmore Asset Management.

The research highlights the outperformance of technology companies during the coronavirus pandemic. The repeated lockdowns and resulting shift in consumer habits and behaviour have benefitted many tech businesses, resulting in some share prices surging.

Bowmore Asset Management research shows that the outperformance of tech stocks in the UK has been less pronounced than in the United States, where the NASDAQ100 technology index has risen 40% vs 17% for the S&P500. US tech stocks have therefore outperformed their broader domestic market by 23% vs UK tech outperforming the wider UK market by 19%.

The US listed tech sector contains some of the biggest winners from the pandemic including tech giants Amazon, Apple, Netflix and DocuSign, the online signature platform, which has seen its share price more than treble in 12 months. However, Bowmore Asset Management says that some US tech stocks are now suffering from overstretched valuations.

Bowmore also points out that many listed UK tech companies have been acquired in recent years depriving the UK index of that boost to its performance. Takeovers of leading UK tech businesses include the acquisition of chip designer Arm and Inmarsat, the satellite telecoms provider.

Charles Incledon, Client Director at Bowmore Asset Management, says: “The performance of tech shares has been one of the rare bright spots in the coronavirus crisis. However, the outperformance of US listed tech shares vs those in the UK brings the small size of the UK tech sector into sharp focus.”

“With Lord Hill’s review on stock market listing requirements taking place, attracting more tech companies onto the equity markets should be a priority.”

The FTSE techMARK 100 consists of innovative technology companies that are listed on the London Stock Exchange’s main market. AIM listed tech businesses such as ASOS and BooHoo are not included in the index.

Examples of FTSE techMARK 100 companies who have performed strongly over the last year include:

  • Flutter Entertainment, the owner of online gaming sites Paddy Power, Belfair and FanDuel, which has seen its share price rise by 72%
  • Oxford Biomedica, the manufacturer of the Oxford-AstraZeneca Covid-19 vaccine, has seen its share price increase by 61%

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