Brexit 10 years on: How UK markets have performed and changed in the last decade

• Continental Europe has broadly outperformed UK equities on a price return basis since the Brexit vote. Five of the five major European indices beat both UK benchmarks.
• FTSE MIB is the standout performer at +311%, driven by a strong recovery in Italian financials and a low starting base post-2016 banking stress.
• DAX leads among the larger economies at +236%, though it includes dividend reinvestment in its price index construction — making direct comparisons with other price-return indices slightly favourable to the DAX.
• FTSE 100 (+136%) has kept pace with the CAC 40 and broadly tracked the Euro Stoxx 50 until 2022, after which European indices accelerated away. The FTSE 100's heavy commodity and financial weighting provided some insulation during the 2022 rate shock.
• FTSE 250 is the clear laggard at +76% — its domestically-oriented composition made it most sensitive to Brexit-related uncertainty, UK-specific inflation, and the 2022 gilt crisis.
• The COVID drawdown (Mar 2020) hit all indices similarly, but European markets — particularly Italy and Spain — recovered more sharply in the subsequent reopening rally.
• From 2025 onwards, European indices have surged materially, with the DAX, FTSE MIB, and IBEX all making new highs, partly driven by European defence spending commitments and a weaker USD environment.

   

  But on a total returns basis the UK has been a lot closer to European indices.

• The FTSE 100's dividend yield materially closes the gap with continental peers. On a price-only basis, the FTSE 100 trailed the Euro Stoxx 50 by ~38pp; on a total return basis, that gap narrows to ~16pp — reflecting the FTSE 100's historically elevated dividend yield.
• The FTSE 250 sees the largest dividend uplift of any index in this comparison: +29.7pp, lifting its total return from +75.6% (price only) to +105.3% — a meaningful improvement, though it still lags all continental peers.
• The DAX is already a total return index in its standard construction, so the comparison between its price and total return figures here reflects the specific total return variant used. The DAX and FTSE 100 are now nearly identical on a total return basis at ~137–139%.
• FTSE MIB's total return is essentially unchanged from its price return, suggesting the total return variant used captures a similar base.

In US dollars...

• Sterling weakness is the dominant story for UK investors. GBP depreciated approximately 10.2% against the USD from the Brexit vote to today, directly reducing USD-adjusted returns for both UK indices by the same magnitude. The FTSE 100's total return drops from +137% in local terms to just +113% in USD terms.
• The EUR/USD effect is marginal. The euro has appreciated only ~1.3% against the dollar over the same decade, so European index returns are essentially unchanged in USD terms — a slight tailwind rather than a headwind.
• The gap between UK and European indices widens materially in USD terms. In local currency, the FTSE 100 trailed the DAX by ~2pp; in USD terms, that gap expands to ~30pp. Against the Euro Stoxx 50, the gap grows from ~16pp to ~44pp.
• The FTSE 250 in USD terms (+84%) is the clear laggard — its domestic UK exposure amplifies both the equity underperformance and the currency drag, leaving it more than 70pp behind the next-worst performer (DAX at +142%).
• Currency-adjusted, the FTSE 100's dividend yield advantage is entirely offset by sterling depreciation for a USD-based investor — a stark illustration of the post-Brexit FX cost.

Note: FX impact is calculated using spot rates on Jun 23, 2016 (GBPUSD 1.488, EURUSD 1.138) and Jun 11, 2026 (GBPUSD 1.3362, EURUSD 1.1532). Returns are compounded, not additive. Stock price snapshot taken 11 June 2026.

Key Structural Differences Explaining the Return Divergence

1. Industrials: The Single Biggest Driver

The DAX's Industrials sector — its largest by member count (9 stocks) — has been transformative. DAX Industrials returned an average of +460% vs. +276% for FTSE 100 Industrials. The standout is Rheinmetall (RHM), up +2,344% since the Brexit vote, driven by the European defence spending surge post-Ukraine. Other strong contributors include Siemens (+293%), Airbus (+263%), and MTU (+284%).

2. Information Technology: A Structural Absence in the FTSE 100

IT represents just 0.9% of the FTSE 100 — effectively zero exposure — versus two significant DAX members: SAP (+134%) and Infineon (+516%). The DAX's IT sector averaged +325% over the period. This is arguably the most structurally damaging underweight for the FTSE 100 over a decade defined by technology outperformance.

3. Energy: A FTSE 100-Only Sector

Energy accounts for 11.2% of the FTSE 100 — its third-largest sector — and returned +99% on average. The DAX has no Energy constituents. While this provided some insulation during the 2022 commodity shock, Energy has been a structural drag relative to the high-growth sectors that dominate the DAX.

4. Consumer Staples: A Heavy FTSE 100 Overweight in a Weak Sector

Consumer Staples is the FTSE 100's second-largest sector at 14.0%, yet returned only +70% on average — one of the weakest sectors in the comparison. The DAX has minimal exposure (2 members, -12% average), meaning the FTSE 100 carries a large allocation to a sector that has significantly underperformed over the decade.

5. Health Care: Large Weight, Weak Returns in Both Indices

Health Care is the FTSE 100's fourth-largest sector at 13.1% and returned just +48% on average — dragged by AstraZeneca's mixed decade and GSK's restructuring. The DAX's Health Care members (Bayer -49%, Fresenius -32%, FMC -36%) fared even worse on average (+9%), but the DAX's lower effective weight limits the damage.

6. Financials: Both Indices Benefit, but DAX More So

Financials is the FTSE 100's largest sector at 24.8% and has performed well (+233%), but DAX Financials outperformed significantly (+300%), led by Commerzbank (+479%), Allianz (+335%), and Munich Re (+337%). European financials benefited more from the ECB rate cycle and a cleaner post-GFC balance sheet recovery.

7. Consumer Discretionary: Opposite Compositions, Opposite Outcomes

FTSE 100 Consumer Discretionary members averaged +339%, driven by luxury and online retail names. DAX Consumer Discretionary averaged just +17%, heavily weighted toward structurally challenged German automakers (Volkswagen +14%, Continental -53%, Porsche -9%). This is one area where the FTSE 100's composition was clearly superior.

Summary

The DAX's outperformance in local currency terms (+139% vs. +137% total return) is narrower than the sector analysis might suggest — the DAX's Industrials and IT strength is partially offset by its auto-sector drag and Health Care weakness.  The structural story is clear: the FTSE 100's overweight in Energy, Consumer Staples, and Health Care — and near-zero IT exposure — has been a persistent headwind relative to the DAX's Industrials and technology tilt.

How the FTSE 100 has shifted weight

Key Shifts Explained

Industrials: +6.4pp (7.0% → 13.4%) — Largest Gainer

The most dramatic re-weighting in the index. The rise reflects strong price appreciation in defence, aerospace, and engineering names — particularly Rolls-Royce, which has been one of the FTSE 100's best performers over the period. The broader global defence spending surge post-Ukraine has structurally re-rated the sector's market cap relative to the rest of the index.

Communication Services: -6.2pp (8.3% → 2.1%) — Largest Decliner

A sharp de-rating driven primarily by the prolonged underperformance of BT Group and Vodafone, both of which have seen significant market cap erosion amid heavy capital expenditure cycles, debt burdens, and competitive pressure. The sector's weight in the index has collapsed to near irrelevance.

Consumer Staples: -5.6pp (19.7% → 14.0%)

Once the FTSE 100's largest sector, Consumer Staples has shrunk materially. Global consumer staples giants such as Unilever and Diageo have de-rated as growth slowed, input cost inflation squeezed margins, and investors rotated toward higher-growth sectors. The sector remains large but has ceded its dominance.

Financials: +5.5pp (19.3% → 24.8%) — Now the Largest Sector

Financials has overtaken Consumer Staples to become the FTSE 100's single largest sector. The re-rating has been driven by the return of a positive interest rate environment post-2022, strong capital returns from UK banks (HSBC, Barclays, Standard Chartered), and the re-emergence of insurance names as yield beneficiaries.

Energy: -2.6pp (13.7% → 11.2%)

Despite the 2022 commodity price surge providing a temporary boost, Energy has drifted lower in weight over the full decade. BP in particular has significantly underperformed Shell and the broader market, weighing on the sector's aggregate market cap.

What Has Not Changed: IT Remains Negligible

Information Technology has barely moved — from 1.3% to 0.9% — remaining the FTSE 100's smallest sector by weight. This structural absence of technology exposure continues to be the index's most significant compositional disadvantage relative to both the DAX and global benchmarks.

How the FTSE 100 has changed – constituents

Over the decade since the Brexit vote, there has been considerable churn within the FTSE 100, with almost 40 stocks leaving and being replaced.

Thematic Observations

• Re-domiciling is the defining trend of the decade. At least seven companies left not through M&A or underperformance, but by shifting their primary listing abroad — BHP (ASX), Ferguson (NYSE), CRH (NYSE), Flutter (NYSE), Ashtead (NYSE), TUI (Frankfurt), and BHP's unified structure. This reflects a persistent concern about UK equity market valuation discounts and liquidity relative to US markets.
• M&A accounted for roughly a third of departures, including high-profile deals: SABMiller (AB InBev), Sky (Comcast), Shire (Takeda), GKN (Melrose), Morrisons (CD&R), RSA (Intact/Tryg), Hargreaves Lansdown (CVC), Direct Line (Aviva), and Royal Mail (EP Group). The UK has been a net exporter of corporate assets over this period.
• Industrials is the standout sector among new entrants, with eight additions (Halma, Diploma, IMI, Smiths, Spirax, Weir, Rentokil, Howden Joinery) — consistent with the sector's weight doubling from 7% to 13.4% as discussed previously.
• Investment trusts have grown in index presence, with Scottish Mortgage, F&C Investment Trust, and Polar Capital Technology Trust all joining — a structural shift reflecting the growth of the closed-ended fund sector and passive index inclusion rules. One area where tech shows up at least.
• ARM Holdings is a notable absence: taken private by SoftBank in 2016 and re-listed on Nasdaq in 2023, it remains one of the most cited examples of the UK losing a flagship technology company to US markets.
• Intu Properties is the sole outright corporate failure in the group, entering administration in June 2020 as the pandemic accelerated the collapse of UK retail property.

Sources: Saxo, Bloomberg