I’ve just returned from a three-week UK staycation, which was a welcome break from my usual daily doses of financial markets. However, bitter experience has taught me that share prices – and the FTSE 100 index – often slide during late summer.
The FTSE 100 climbed 4% this week…
So it proved this year, with the FTSE 100 closing below 5,800 one week ago. But this week has been positive for leading UK shares, with the main index climbing over 230 points (4%).
…But has fallen 18% in a year
However, over the past 12 months, it’s been a brutal time for investors in British blue-chip businesses. The main-market FTSE 100 index is down more than 1,300 points (17.9%) since 12 September 2019. That’s despite a sharp recovery from the coronavirus-induced lows of late March, when the Footsie crashed below 5,000.
Some FTSE 100 shares have been crushed
As a broad market index, the FTSE 100 measures the aggregate performance of its constituents. As you’d expect within any market index, some FTSE 100 shares have jumped, while others have slumped. For example, a quick check revealed that 99 shares have been in the FTSE 100 for a year or more. Of these 99:
* 42 shares have risen over the past year, with gains ranging from a tiny 0.4% rise to an impressive 89.5% leap. The average gain among these risers is a tasty 26.8%.
* 57 shares have fallen, with drops ranging from a mere 1.6% to a crushing 74.4%. Among these fallers, the average loss comes to 25.3%.
Obviously, you would have to be very fortunate (or talented) to have all your FTSE 100 picks among these 42 winners and none among the 57 losers.
Lloyds Banking Group is down 50% in 12 months
The ‘dirty dozen’ of this list – the 12 worst-performing FTSE 100 shares – includes an airline, two major oil producers and four of the UK’s five biggest banks. Among these four banks, the worst performer – at #6 on my fallers’ list – is Lloyds Banking Group (LSE: LLOY), down 49.5% in 12 months.
To be fair, I’ve been a long-term critic of Lloyds for a number of years – pretty much from when it emerged, fragile and shell-shocked, from the global financial crisis of 2007/09. Yet even I’m surprised at how little this former FTSE 100 giant and its shares are worth these days.
Lloyds crashed two-thirds from its 2019/20 peak
On 13 December last year, Lloyds shares hit their 52-week high of 73.66p. On Friday, they closed at 25.88p. This means that Lloyds has lost almost two-thirds (64.9%) of its value in nine months.
When I look at these performance numbers for this FTSE 100 stalwart, it makes my head spin. It also makes me very grateful that I haven’t bought any Lloyds shares in recent years.
I believe this FTSE 100 share will bounce back
Today, the whole of Lloyds – the UK’s largest retail bank with over 30 million customers – is worth a mere £18.7bn. Even worse, this former FTSE 100 heavyweight has lost an incredible £34.5bn of market value in just three-quarters of a year.
Obviously, with coronavirus ravaging its profits, it’s impossible to value Lloyds shares using conventional measures. That said, after a couple of years of post-Covid normality, I could see Lloyds shares doubling or perhaps tripling from here. I may be glad I haven’t bought in recent years, but for this capital growth and the eventual return of chunky cash dividends, I would buy today and be happy to hold shares in this fallen giant!
Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.