One of the leading investment indexes is undergoing a shake up as the credit crunch bites, according to one expert.
According to Nick Raynor, investment advisor at the Share Centre, the removal of Alliance and Leicester and home builder Persimmon from the FTSE 100 index of leading shares indicates the current state of the economy .
Mr Raynor said: "The importance of this for investors is that it further highlights which companies have fallen victim to the credit crunch and housing market slowdown."
However, companies that fall out of the FTSE 100 often experience a rebound, meaning that they might still prove to be good investments, he added.
Anyone who has investments in the new companies entering the FTSE 100 should also see the value of their shares rise, Mr Raynor stated.
Yesterday, Graham Ashby, head of retail UK equities at Credit Suisse, warned that investment funds which track the FSTE 100 may not offer good returns as the index is increasingly less diverse.
Investment index undergoes a shake up
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Investment index undergoes a shake up
Tue, 24 Jun 2008
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