Hundreds of thousands of individuals throughout the UK are voting within the 58th common election as we speak (4 July). All of the polls recommend a change in authorities. Right here’s how that may have an effect on FTSE 100 shares, no less than if historical past is something to go by.

The information

Excluding this one, there have been 16 common elections for the reason that inception of the FTSE All-Share in 1962. This index captures about 98% of the UK’s market capitalisation, with the FTSE 100 making up most of that.

Based on AJ Bell, the FTSE All-Share on common has recorded a double-digit acquire within the yr following a major minister’s ejection from workplace.

Capital return from FTSE All-Share (%)

As we all know, the newest polls all level to the incumbent Conservative administration being changed. Happening this historic knowledge, that’s a bullish signal for the UK inventory market.

World index

At first look, this is smart. In spite of everything, new governments typically are available promising to enact change and enhance financial progress. This may convey a way of optimism amongst buyers.

Certainly, it might be counterintuitive if the forward-looking inventory market didn’t react positively (assuming a brand new administration is pro-business, in fact).

Nonetheless, it’s essential to keep in mind that over 80% of the gross sales of FTSE 100 firms come from abroad. This implies the index is way extra vulnerable to react to world occasions that don’t have anything to do with which social gathering is sat in Downing Road.

For instance, if the worldwide financial system tanked, Footsie shares can be unlikely to report double-digit positive factors.

The lengthy view

Fortunately, as a long-term investor, I have a tendency to not fear about all this. If I make investments £750 a month and obtain a mean 10% annual return (a bit above the historic common for UK shares), I’ll finish up with simply over £1m after 26 years.

That’s with dividends reinvested, benefiting from the magic of compounding.

After all, there will likely be ups and down throughout this era, and a good few elections. However historical past teaches us that the inventory market goes up over time.

Coca-Cola HBC

No matter who wins the election, one FTSE 100 inventory I’d purchase with spare money is Coca Cola HBC (LSE: CCH). It is a key bottling associate with The Coca-Cola Firm.

Their settlement grants Coca-Cola HBC the rights to supply, distribute and promote Coca-Cola merchandise throughout 28 international locations, primarily in Europe and components of Africa. These embrace Coke, Fanta, Sprite, Costa Espresso, Schweppes, and power drinks from Monster Beverage.

In the meantime, the US drinks big manages the general model technique, provides concentrates, and retains a big stake within the enterprise.

In 2023, income grew 10.7% yr on yr to €10.2bn, whereas earnings per share (EPS) jumped 21.8% to €2.08. Analysts see income rising steadily to €11.7bn by 2026.

The inventory appears low-cost buying and selling at 14.5 occasions ahead earnings and provides a 3.1% dividend yield this yr.

And whereas there’s all the time the chance of cash-strapped shoppers buying and selling down to cheaper manufacturers, I’m reassured by the depth and breadth of the agency’s choices.

These manufacturers are tipped to proceed rising in rising markets like Poland, Nigeria and Egypt. Plus, as Coca-Cola provides extra manufacturers to its portfolio over time, this bottling associate is about up for additional success.