Abrdn poised to tumble out of Britain’s blue-chip index for first time since 2017 mega-merger
Abrdn is set to tumble out of Britain’s blue-chip index for the first time since its 2017 mega-merger.
The investment company, which looks after £508billion of savings, has become too small to keep its place in the FTSE 100 as its shares have slumped following a run of poor performance.
It is the seventh-worst performing stock on the index of major listed companies this year, having slid more than 40 per cent, and is worth just £3.2billion.
Abrdn, which looks after £508bn of savings, has become too small to keep its place in the FTSE 100 as its shares have slumped following a run of poor performance
Since Abrdn was formed through the 2017 merger of Standard Life and Aberdeen Asset Management, its shares have tanked by 65 per cent.
Susannah Streeter, of investment platform Hargreaves Lansdown, said: ‘Huge geopolitical uncertainty, sky-high inflation and worries about economic growth have been challenging for the asset management sector, and Abrdn’s weaker performance in this environment looks set to propel it out of the big league.’
She said its range of so-called Environmental, Social and Governance (ESG) funds lag behind its peers as the sector becomes more popular.
And lacklustre performance among its fund managers over the last several years has caused investors to continually pull their money out of Abrdn products.
Streeter said that more recently, the majority of Abrdn’s funds were delivering ahead of their benchmark.
And she said the acquisition of investment platform Interactive Investor last year was a step in the right direction, as it ‘should provide a relatively stable source of assets’.
But this has come too late to prevent Abrdn from suffering the fate of relegation.
Bar any major moves on the stock market today, Abrdn will almost certainly be demoted to the FTSE 250.
Chief executive Stephen Bird has insisted that his strategy of building in the UK wealth market and focusing on high-growth areas will pay off.