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Methodology

Substantially employee-owned businesses are identified through annual reports, shareholder circulars, disclosures of significant shareholdings and press coverage. Broad-based ownership, as opposed to concentrated executive-only ownership, is a requirement for inclusion in the index.

The constituents of the index are reviewed quarterly for possible changes. It is likely that the index is omitting some eligible companies that have not so far been detected.

There are currently [80] companies in the 3% index and 18 companies in the 10% index.

The index is equal weighted, i.e. it is not weighted by market capitalisation. It is calculated on a total return basis, i.e. with an assumption that dividends are re-invested.

Performance

The 10% index has consistently outperformed the FTSE All-Share over 3, 5 and 10 years. Even over one year, when out-performance has been less consistent, the average out-performance is [11.2%].

There is a good spread of companies by size, but a sectoral bias in favour of support services, financial services, IT and media.

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