Concentration of lifetime aggregate wealth creation of common stocks in the United Kingdom stock market

Abstract

The thesis studies the concentration of lifetime aggregate wealth creation of common stocks in the United Kingdom (UK) stock market from December 1964 to September 2024. The lifetime aggregate wealth created by a common stock is the wealth created to the shareholders of the common stock in aggregate over the stock’s lifetime in excess of the wealth that would have been generated if the capital would have been invested into one-month UK Treasury bills over the same time-period.

The lifetime aggregate shareholder wealth created by UK common stocks is highly concentrated to relatively few stocks. The wealth created by the common stock that created the most wealth represents 6.4% of all the net wealth created in the UK stock market over the almost 60-year historical investment horizon considered, while the wealth created by the top ten most wealth creating stocks represents 46.4% of all the net wealth created.

The 3.7% top-performing UK common stocks created all the net wealth in the UK stock market. The wealth created by the remaining 96.3% of common stocks combined matched the wealth created by the UK one-month Treasury bills.