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Liontrust joins FTSE 250 in latest reshuffle

Liontrust joins FTSE 250 in latest reshuffle

Liontrust Asset Management has joined the FTSE 250 in the latest quarterly reshuffle from FTSE Russell.

The fund house's market capitalisation, around £700m, was enough to boost it into the UK's second tier index in the reshuffle announced yesterday evening (June 3).

Liontrust — founded in 1995 and floated on the stock exchange in 1999 — has grown significantly over the past few years and its share price has jumped 225 per cent since the start of 2017.

During this time, it has acquired both Alliance Trust Savings and rival fund house Neptune, as well as securing serious backing from asset managers such as BlackRock.

The reshuffle told a different tale for JP Morgan's Indian Investment Trust. The trust has seen its share price drop 30 per cent over the past year and its market cap of £412m was not enough to keep it in the FTSE 250.

Other companies leaving the FTSE 250 included Bakkavor Group, Elementis, Forterra, Hyve Group and McCarthy and Stone.

Avast, GVC Holdings, Homeserve and Kingfisher meanwhile will move up to the FTSE 100.

As expected, they will replace Easyjet, Centrica, Carnival and Meggitt, who have all lost a spot in the UK's blue chip index during this quarter's reshuffle.

Every quarter, UK companies are ranked in terms of their market capitalisation. If a company falls below 111th it is demoted from the FTSE 100, while a company needs to rank 90th or above to be promoted to the index.

Carnival’s shares have plunged nearly 60 per cent since the coronavirus crisis first hit Europe, after cruise passengers were stranded and quarantined on ships for weeks, and now ranks about 150th in terms of market cap.

Despite a recent recovery, Easyjet’s share price is roughly half of what it was in February and is set to rank 121st in terms of market cap, so will fall into the FTSE 250.

Aerospace engineering group Meggitt had already felt the pinch of the grounding of Boeing’s 737 Max planes following two accidents last year, while the coronavirus exacerbated the issues when planes were grounded, meaning less need for parts and components.

Meanwhile Centrica, the owner of British gas, is set for relegation having just scraped the blue chip index over the past few years.

The coronavirus crisis has seen 17 per cent wiped from the UK’s blue chip index since the start of 2020 while the FTSE 250 has dropped nearly 20 per cent.

Adrian Lowcock, head of personal investing at Willis Owen, said the reshuffle was "one of the most far-reaching" in the index's history and would impact many tracker funds.

He said: “The Covid-19 crisis has had a massive impact on some specific sectors of the British economy, with airlines, retailers and travel companies bearing the brunt.