I was curious as to the decile rankings of 5yr average ROCEs of the constituents. I obtained the data from Stockopedia. Here are the results:
ft100
10% 20% 30% 40% 50% 60% 70%
0.3150548 0.8545147 2.9984792 6.2939897 7.7812465 10.0212939 13.8890476
80% 90%
16.7627709 20.0459453
ft250
10% 20% 30% 40% 50% 60% 70%
-0.2625414 1.8755856 4.2662963 5.8635666 7.6652830 10.1026573 13.6868457
80% 90%
16.2027114 27.5484484
The results are in percentages. Obviously there is false precision in the numbers, but I didn't bother to round off.
What is interesting is that the numbers are broadly similar, with more dispersion amongst the FT250 compared to the FT100. The top 10% in the FT250 earn significantly more than those in the FT100.
The similarities surprised me, as I expected the FT250 to have better ROCEs overall. The median return is 7.8% for the FT100, almost identical to the FT250. I find that figure to be underwhelming. 20% of the Footsie earn less than 1% on ROCE.
The good news is that over 20% of them earn returns in excess of 15%. 15% is what I would call a company earning good returns. 30% of companies earn around 13.7% or better, which is pretty reasonable.
My conclusion is that you should have a good selection to choose from. Just avoid the dross. I found it to be an interesting exercise.
