Theresa May did not exactly cover herself in glory during her time as prime minister, and this was reflected in the performance of the FTSE 100 under her tenure compared with her predecessors.
The typical investor reaction to the protracted Brexit uncertainty that characterised May’s time in office was to pull out of the FTSE in droves, making it the least popular market in the developed world.
Most investors that have ventured into the UK market have tended to opt for large, multi-national defensive stocks, while steering clear of the more cyclical names.
As a result, the FTSE 100 has returned just 27.32 per cent since May’s appointment on 13 July 2016, against 44.48 per cent for the MSCI AC World index.
This put her second from bottom compared with the market’s total return under other prime ministers since it opened in 1984.
Performance of indices under May's tenure as prime minister
Source: FE Analytics
However, this is also due to May’s relatively short time in office, at just three years and 11 days.
Dividing the total return of the market’s gains by the number of days they spent in office is more flattering for May – it shows the market made 0.02458 per cent per day, moving her above David Cameron and into fourth in the list of six.
The table below shows the total returns for May and each of the five previous prime ministers.
Source: FE Analytics
As noted in a previous article, John Major, prime minister from 28 November 1990 to May 1997, oversaw the biggest cumulative stock market gain while in office, with the FTSE 100 recording 175.98 per cent total returns.
The UK market produced a higher return than the MSCI World index during this time, in spite of a recession, the first Gulf War and Black Wednesday.
Major’s predecessor Margaret Thatcher was in office from 4 May 1979 to 28 November 1990, while the FTSE 100 was launched in on 3 January 1984 – the starting point of our study.
During this time, the blue-chip index rose from its starting level of 1,000 to 2,144.3, or 114.43 per cent.
The market was lifted during this time by the privatisation of numerous nationalised industries, including steel, railways, airports and aerospace; and utilities, such as gas, electricity, telecoms and water.
Third on the list is Tony Blair. Despite the numerous headwinds during 1997 to 2007, including the bursting of the dotcom bubble and the second Gulf war, the FTSE 100 rose 97.98 per cent during his time in office.
Next comes David Cameron, 11 May 2010 to 13 July 2016.
Performance of indices under Major's tenure as prime minister
Source: FE Analytics
Determined to shrink the budget deficit, Cameron launched a massive austerity programme carried out by chancellor George Osborne.
Cameron also witnessed numerous headwinds in his role as prime minister, including the 2011 eurozone debt crisis, the Scottish independence referendum, and military intervention in Libya. However, it was also a time of historically low interest rates and quantitative easing (QE) which helped to boost equity markets.
Blair’s successor Gordon Brown came last in the rankings, with the FTSE 100 falling by 8.74 per cent during his tenure. Brown, who was prime minister from 27 June 2007 to 11 May 2010, came into office just as the first tremors of the great financial crisis were being felt.
The picture is somewhat different, though with Major still in the top and Brown at bottom.
In terms of where investors would have been best off putting their money while May was in charge, IA Technology & Telecommunications was by far the best-performing IA sector over this time, its gains of 81.28 per cent almost 30 percentage points higher than IA China/Greater China in second place.
Aside from the money market sectors, IA Targeted Absolute Return fared the worst with a gain of just 5.11 per cent, while global markets rallied.
Polar Capital Global Technology was the best-performing fund with gains of 120.27 per cent, although special mention should go to TM Cavendish AIM in second place with returns of 118.71 per cent, almost four times the gains of its benchmark.
At the other end of the scale, MFM Junior Gold fared worst with losses of 41.93 per cent – even the price of gold rose by close to 10 per cent in this period.