Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

This time next week British broadcaster ITV will make its return to the FTSE 100. ITV's dramatic share price rebound is behind its promotion back into blue chip territory, after seeing its shares hit a nine-year low in April last year.

The Love Island broadcaster was hit by the drop in advertising spending during the pandemic, that, coupled with social-distancing restrictions limited the amount of new content the company could produce. But marketing spending has since, fortunately for ITV and its investors, rebounded - quicker, you might say, than a love-sick reality TV wannabe.

While the start of lockdown saw new subscribers flocking to streaming services such as Netflix, Amazon Prime and Disney+, ITV was given the cold shoulder. Even the broadcaster’s attempt to tap into the streaming market by joining forces with the BBC to create Britbox was not been enough to prevent the share price falling over 60% within months of the first lockdown starting.

Since then, however, the share price has rallied by more than 130%, re-securing ITV’s place in the FTSE 100 following a recovery in advertising spending, during which time its share price has gradually recovered, hitting a 12-month high recently. Please remember past performance is not a reliable indicator of future returns.

But ITV won’t be able to rest on its laurels. What goes up can just as easily go back down and there is no doubt that the broadcaster will face further long-term challenges as it takes on ever-more intensive competition from streaming rivals.

ITV will take the spot left by engineer Renishaw, which was the smallest member of the FTSE 100 at the close of trading on 2 June. Renishaw’s spell as a blue chip has proved to be short-lived. It only became a FTSE 100 stock in the last quarterly reshuffle. However, as ITV has shown, what goes down can go back up again.

The FTSE 100 undergoes a reshuffle on a quarterly basis, which usually results in two or three stocks being relegated to the FTSE 250 index, and those in turn replaced by those at the top of the FTSE 250.

The latest news on who’s in and who’s out came on 2 June, based on company closing prices from the day before. The changes come into effect a week today on 21 June.

Royal Mail has also been promoted after insurer RSA was removed from the index following its sale to Danish insurer Tryg.

This time around most of the action is in the FTSE 250. The reshuffle will see online greetings card retailer Moonpig, which recently listed in London, make its FTSE 250 debut. So too will Trustpilot, another company to join the stock market only recently, and Auction Technology Group.

Companies falling into the small-caps include sub-prime lender Provident Financial and Sabre Insurance Group.

Since its launch 37 years ago the FTSE 100, like the UK economy, has continually evolved. Back in 1984 the index featured many household names aimed at the domestic market. Then came the nationalisation of many state industries which changed its composition over time.

Now the index is far more international than it once was, with more than 75% of FTSE 100 companies generating their earnings from overseas. With such a large presence of multinationals it’s no longer an indicator of the true state of the domestic UK economy. Often when the pound strengthens against other currencies such as the dollar, you’ll see the FTSE index fall as the value of profits made overseas from multinational companies are reduced when converted into pound sterling.

Many investors looking for a low-cost way to access the performance of an index turn to tracker funds which aim to follow the ups and downs of a particular market.

Rather than focus on the top 100 companies, many UK tracker funds follow the FTSE All-Share Index which is made up of over 600 London-listed companies to get a broader, more diversified spread of companies. The Fidelity Index UK Fund does exactly that, with an extremely low ongoing charge of just 0.06% per year.

Find out more on the Fidelity Index UK Fund

Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.

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