Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. This material is not intended to provide advice of any kind. FTSE 100 returns with and without dividends 1999-2019 The blue bars show the return without dividends reinvested. The green bars in the chart below show the theoretical investment return had you reinvested your dividends. But as the data shows, even when the actual price of the index barely moves, you can still earn a return on your investment if you reinvest company dividends. Ideally, stock prices should rise too, so your capital grows along with your income. That’s an annual return of 4%, not adjusted for inflation or charges, compared with 0.4% if you had invested in the index alone. In this scenario, if you had invested £1,000 in the FTSE 100 on New Year’s Eve 1999, your investment could now be worth £2,222. However, the picture changes dramatically if you had invested in the FTSE 100 and opted to revinvest the dividends its listed companies pay. You could use it to supplement your monthly income, for example. That’s because when you take the dividend as cash payment there is no guarantee you will reinvest it. It also does not include the value of taking dividends as a cash payment. That’s not adjusting for the effects of inflation or charges. The dividend reinvestment effectĪs the chart below shows, if you invested £1,000 into the FTSE 100 on 31 December 1999 and left it alone, it would be worth £1088 without reinvesting dividends. However, if you include dividends the index has actually returned 122% over the same period (or 4% a year), according to Schroders’ calculations. Price-wise, that’s an average annual return of 0.4%. It stood at 7542, just over 600 points higher. Subequently, geopolitical events such as Brexit have continued to stifle the FTSE 100.īy 31 December 2019, exactly 20 years on, the FTSE 100 would barely have moved. But few could have envisaged then what would happen over the next two decades.įirst, the bursting of the dotcom bubble at the turn of the millennium, then the global financial crisis, which began in 2007, wiped billions off the stock market. The stock market was in the grip of the “dotcom” boom. As revellers saw in the new millennium on New Year’s Eve 1999, the FTSE 100 closed at a then-record high of 6930.
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