Aberdeen Group (ABDN) is set to rejoin the FTSE 100 index following a scheduled reshuffle, marking a significant return for the asset management firm.
The reshuffle will see Aberdeen reclaim its place among the UK’s top one hundred listed companies after a period outside the prestigious index.
Berkeley Group (BKG), the housebuilder, is among the companies facing demotion from the FTSE 100 as a result of the periodic index review.
Property listings platform Rightmove (RMV) is also set to drop out of the FTSE 100, representing a notable change in fortunes for the well-known company.
FTSE index reshuffles occur on a quarterly basis and are determined by the market capitalisation of listed companies on the London Stock Exchange.
Companies that fall below the required threshold in terms of market value are relegated to the FTSE 250, while those that have grown sufficiently earn promotion.
Aberdeen’s return to the FTSE 100 reflects a recovery in its market capitalisation, allowing it to meet the criteria set by index compilers for inclusion.
The changes will affect tracker funds and passive investment vehicles that are required to mirror the composition of the FTSE 100 index automatically.
Fund managers running index-tracking products will need to buy shares in Aberdeen and sell holdings in Berkeley Group and Rightmove to reflect the new composition.
Such reshuffles can cause notable short-term price movements in the affected stocks as institutional investors adjust their portfolios ahead of the changes taking effect.
The broader FTSE 100 index continues to be closely watched as a key barometer of the health of the UK’s largest publicly listed companies.
Aberdeen’s inclusion will once again place it alongside the biggest names in UK finance and business on the London Stock Exchange.